Corporation Taxes FAQ

Contents

• What income is chargeable to corporation tax?

• How is corporation tax calculated?

What income is chargeable to corporation tax?

The profit of any company accrued in or derived from Guyana or elsewhere, whether or not payments are received in Guyana is chargeable to corporation tax. Chargeable profits include:

1. profits from any trade or business for whatever   period of time the trade or business is carried on;

2. profits from any profession or vocation or management charges or charges for the provision of personal services and technical or managerial skills;

3. capital gains accruing on the disposal of property within twelve months of its acquisition;

4. interests, discounts, annuities or other accrued or periodic payment received  for the use of capital;

5. premiums, commissions and fees;

6. rents and royalties; and

7. dividends and other income from non-resident companies.

How is corporation tax calculated?

The rate of corporation tax is forty-five percent for commercial companies and thirty-five percent for non-commercial companies. There are no special rates applying to particular industries.

A commercial company is a company at least seventy-five percent of the gross income of which is derived form trading in goods not manufactured by it and includes any commission agency, any telecommunication company, any body corporate licensed or otherwise authorised by law to carry on banking business in Guyana, and any company carrying on insurance business other than long-term insurance.

While non-commercial company pays tax at one rate, (35%), commercial companies are also subject to a tax referred to as minimum corporation tax (MCT) which is computed at two percent of turnover. Commercial companies must first calculate corporation tax in accordance with normal principles. If the tax calculated on the normal basis i.e. at 45% is less than two percent of turnover, tax at two percent of turnover is payable. Where the tax at the normal rate is greater, then tax at the normal rate is payable.

Any excess MCT over tax at the normal rate is carried forward for setoff against corporation tax payable in subsequent years. MCT is recoverable against future years’ taxes providing however that in no year shall the tax payable be reduced to less than two percent of turnover.