Global Mobility Services: Taxation of International Assigneees – Sierra Leone Taxation issues &

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Global Mobility Services:
Taxation of International
Assigneees – Sierra Leone
Taxation issues &
related matters for
employers &
employees 2016
Last Updated: May 2016
This document was not intended or written to be used, and it cannot be used, for the purpose of
avoiding tax penalties that may be imposed on the taxpayer.
Country
Sierra Leone
Introduction:
4
Step 1:
Income tax summary
5
Step 2:
Rates of tax
8
Step 3:
Double-taxation agreements
9
Appendix:
Contacts and offices
10
Additional Country Folios can be located at the following website:
Global Mobility Country Guides.
Global Mobility Country Guide (Folio) 3
Introduction:
PwC is the world's leading provider
of professional services. The People
and Organisation group works
together with its clients to find
solutions for the challenges they
encounter when transferring people
from one country to another.
This summary is intended to inform
foreign nationals and their
4
People and Organisation
employers about high
level tax, social security and
immigration issues.
This guide is not exhaustive and
cannot be regarded as a substitute
for professional advice addressing
individual circumstances.
Nevertheless, answers will be found
to most of the questions raised by
an expatriate or his/her employer.
More detailed advice should be
sought before any specific decisions
are made about these issues.
More information can be obtained
from our offices specializing in
People and Organisation, Global
Mobility.
Step 1:
Income tax summary
Question
Answer
Basic information
1
The date of the tax year end
31st December.
2
Types of income that are liable to tax
Employment income, business income, property
income and any other income or gain (except where
specifically exempted), less the total amount of
deductions allowed to that person.
3
How are residents and non-residents
treated differently for tax purposes?
For a temporarily resident person, the chargeable
income that which is sourced in or remitted into
Sierra Leone.
The chargeable income of a non-resident person is all
income sourced in Sierra Leone.
4
Do spouses file tax returns jointly or
as individuals?
No. Spouses file returns as individuals.
5
Method of determining domestic tax
residence
An individual is resident for tax purposes if
that individual:
6
Provide some details of the exchange
controls in this jurisdiction

has a normal place of abode in Sierra Leone and is
present in Sierra Leone at any time during the year
of assessment;

is present in Sierra Leone for more than 182 days in
a 12-month period that commences or ends during
the year of assessment; or

is an official of the Government of Sierra Leone
posted overseas during the year of assessment.
The Central Bank of Sierra Leone supervises exchange
control. The bank initiates wholesale auction of noncash foreign exchange on a weekly basis.
Global Mobility Country Guide (Folio) 5
Question
Answer
Tax rates, allowances and credits
7
Income tax allowance amount
Le 500,000 per month or Le 6,000,000 per annum
8
Capital gains tax allowance amount
Le 1,800,000
9
Rate of capital gains tax
The general rate of tax is 30%.
For minors resident in Sierra Leone, the rate is 40% of
the excess over Le 360,000.
10
Rate of tax on interest
15%. This is a final tax
11
Rate of tax on dividends
10%. This is a final tax
12
Rate of employer social security
10% of employment income
13
Rate of employee social security
5% of employment income
14
What types of income are exempt from
tax/deductible from taxable income?
Overseas employment income of a temporarily resident
person. In addition; actual medical expenses
discharged or reimbursed, passage costs, redundancy
pay or similar type of payment not exceeding Le
50,000,000, scholarship payable to a full-time student
undergoing instruction at an educational institution
(please note that this list is not exhaustive).
Before arriving in the country
15
What must an individual do in order to
be able to work in the country i.e. obtain
a work permit, intra company transfer
visa, critical skills visa
An individual must obtain both temporary residency
visa and work permit.
16
What conditions must be met to be
eligible to have a work permit
A temporary residency visa must first be obtained to be
eligible to have a work permit.
When employment is changed, the existing work
permit becomes invalid as such a new work permit
application must be made.
17
What is the maximum period a work
permit will be issued for
A year.
18
Can a work permit be renewed
Yes.
19
What would be the immigration
requirements for a short term business
visitor
A short term business visitor must obtain a business
visa to engage in short term work in Sierra Leone.
20
At what point/type of activity would
trigger a tax liability in the country
This will depend on the tax residency status of the
individual who earns the income. Tax will be triggered
as follows:
Resident individual - when the individual earns income
irrespective of the source of the income.
6
People and Organisation
Question
Answer
Temporary resident individual - when the individual
earns income that which is sourced from or remitted
into Sierra Leone.
Non-resident individual – when the individual earns
income that has a source in Sierra Leone.
Global Mobility Country Guide (Folio)
7
Question
Answer
During the assignment
21
Does an individual need to register as a
taxpayer
Yes, an individual needs to register to obtain a
Taxpayer Identification Number (TIN).
22
Timeline and process for registering as a
taxpayer
The individual needs to complete a TIN application
form which can be obtained from any NRA office
or online.
23
Are provisional taxes required?
No. Taxes are on a Pay As You Earn basis.
24
If yes, on which dates?
Not applicable.
25
If yes, what are the penalties for noncompliance?
Not applicable.
26
Important dates to remember during the
tax year
15th day of each month – PAYE tax;
31 January – Payroll Tax return;
30 April – filing of annual tax return.
At the end of the tax year
27
Tax return filing deadline
30 April.
28
Penalty for late filing
Le 5 million plus 10% of the tax payable
29
Tax payment deadline
30 April
30
Penalty for late payment
The following applies to an employer who fails to pay
the tax withheld by the due dates:
Interest rather than penalties are levied;
Between 1-30 days : 10% of tax payable
Between 31-90 days: 15% of tax payable
Between 91-180 days: 20% of tax payable
Above 180 days: 25%.
For an individual who fails to pay his personal income
tax after the first 7 days after the due date, interest at
3% higher than the specified rate applies on the amount
due. , calculated from the due date to the date the
payment is actually made.
At the end of an assignment
31
8
The process and actions required before leaving
the country
People and Organisation
One may need to obtain a tax clearance so as to be able
to export personal belongings or for a demand for
bank credit.
Step 2:
Rates of tax
Personal income tax rates for 2016
The figures provided in this table are in
Sierra Leonean Leone (Le).
Monthly Taxable
Income
Income Tax rate (%)
0 – 500,000
0%
500,000 – 1000,000
15%
1,000,00 – 1,500,000
20%
1,500,000 – 2,000,000
30%
Above 2,000,000
35%
Global Mobility Country Guide (Folio) 9
Step 3:
Double- taxation agreement
Countries with which double-taxation agreements are in place
Please note that the double taxation agreements are currently not being enforced by the NRA.
Norway
United Kingdom
10 People and Organisation
Appendix:
Contacts and offices
Contacts
George Kwatia
Partner
Gifty Matey
Senior Manager
Tel:
[233] (302) 761 459
Tel:
[233] (302) 761 500
Email:
[email protected]
Email:
[email protected]
Global Mobility Country guide (Folio) 11
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