all sales and purchases of goods and services made by that business.ī) The books of accounts of the taxpayer have been audited in each of the preceding three years by a recognized firm of accountants andĬ) The taxpayer is not in arrears with respect to the payment of tax for a previous year of assessment. all receipts obtained and expenses incurred by a business and the matters to which such receipts and expenditures relate and This does not apply to a company taxpayer where:Ī) The Taxpayer maintains proper books of accounts of. This is charged when a Taxpayer imports goods into Sierra Leone for resale and shall pay to the Commissioner an amount equal to the higher of:Ī) 3% of the CIF value of the goods imported orī) 3% of the value of the goods imported as assessed for the purpose of customs. Income Tax ActĪdvance Tax as Withholding Tax ( Prepayment of Income Tax) (This would be done where interest is paid to an exempt person).Īlthough Section 124 of the Income Tax Act does not mention the word interest it does mention in Section 119 and so the tax withheld is a final tax. These are not necessarily banks and so the exception from withholding does not apply to such companies-their customers will need to deduct tax.)ī) Interest paid on Government Development Stocks andĬ) Interest the payment of which the Commissioner-General certifies to be exempt from the requirements of this section. (The rate of tax will be the same)Ī) Interest under Paragraph (e) of Section 24 if paid to a Bank resident in Sierra Leone (note that Section 24(e) also refers to companies that lend money. Section 119 of the Income Tax Act states that a person resident in Sierra Leone who pays interest shall withhold tax on the gross amount of the payment in:Ī) The case of a payment made to a person resident in Sierra Leone at the rate of 15% ī) The case of a payment made to a non-resident person at 15%Ĭ) The case of a discount or premium referred to in Section 55 at the time it is given or paid. This tax is a final tax under Sections 124 & 125 of the Income Tax Act. The Domestic Taxes Department needs to confirm this to the dividend paying company.
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A complying retirement fund resident in Sierra Leone.Ī company paying a dividend to a retirement fund will not know if it is a complying fund.It is important to note that this does not apply to dividends paid to: Section 118 of the The Income Tax Act states that a resident company that pays a dividend shall withhold tax on the gross amount of the payment in:Ī) The case of a payment made to a person resident in Sierra Leone at 10% andī) The case of a payment made to a non-resident person at the rate of 10%. The payer of the income mentioned above is responsible for deducting and remitting the tax to the Commissioner on or before the 15 th day of the following month. Withholding Tax rates vary as shown on each of the above-mentioned types of income depending on whether the recipient of the income is Resident or Non-Resident.Payments to or applications for the benefit of non-resident beneficiaries (Section 123) 25%.Natural Resource Payments (section 122 of the Income Tax Act) 25%.Pensions and annuities (section 121 of the Income Tax Act) 25%.Royalties (section 120 of the Income Tax Act) 25%.Rents (section 120 of the Income Tax Act) 10%.Payment to Contractors (Section 117 of the Income Tax Act) 10%.Employment Income (Section 116 of the Income Tax Act) 25%.Types of Payment and Rate of tax on chargeable income of non-resident: Winnings of Le 500,000 and above from any lottery 10%.Real Property (Section 123A of the Income Tax Act) 10%.Natural Resource Payments (Section 122 of the Income Tax Act) 25%.Pensions and Annuities (Section 121(2) of the Income Tax Act)15%.Royalties (Section 120 of the Income Tax Act) 25%.Rents (Section 120 of the Income Tax Act) 10%.Interest (Section 119 of the Income Tax Act) 15%.
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Dividends (Section 118 of the Income Tax Act) 10%.Payments to contractors (section 117 of the Income Tax Act) 5%.Types of Payment and Rates to be withheld from payments made to persons resident in Sierra Leone are : Withholding Tax rates vary depending on whether the recipient of the income is Resident or Non-Resident.
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Withholding Tax is deducted at source of income.