Withholding Tax is income tax withheld from employees’ wages and paid directly to the Government, by the employer. A tax levied on income (interest and dividends) from securities owned by a non- resident. The amount withheld is a credit against the income taxes the employee must pay during the year. Tax is deducted not only from dividends but from other income paid to non-residents of a country.
The rate tax of payments is set out based on:
- Any gross distribution made to any person not a resident in Guyana
- Gross payment, being interest earned on savings accounts held at commercial banks and other financial institutions by any person whether resident in Guyana or not
- Gross payment, being interest earned on loans secured by bonds and similar instruments by any person whether resident in Guyana or not
- Every discount earned on treasury bills by the person who discounts the bill whether on or before maturity
A person not resident in Guyana (non-resident person) whether a Commonwealth citizen or not, shall be assessable and chargeable in the name of his trustee, guardian, or committee, or of any attorney, factor, agent, receiver, branch, or manager, whether either party has the receipt of the income or not, like manner and to the like amount as the non-resident person would be assessed and charged if he was resident in Guyana and in the actual receipt of that income.
Where a person is exempt from Corporation Tax under Section 7 of the Corporation Tax Act Chap. 81:03 that person shall also be exempt from Withholding Tax under this Act.
For any person who is in Guyana for some temporary purpose only and not with the intent to establish his residence therein, who has not actually resided in Guyana at one or more times for a period equal in the whole to six months in the year preceding the year of assessment is not required to pay tax in respect of any income arising.
Withholding tax exemption on savings interest for aged and incapacitated individuals.
Persons who are sixty (60) years and older, and persons with disabilities from illness or accident, are exempt from paying twenty percent (20%) Withholding Tax on interest earned on savings accounts. This exemption is applicable if the total income does not exceed seven hundred and eighty thousand dollars ($780,000).
In addition, persons sixty (60) years and older and persons with disabilities will not be subject to income tax like every other person who earns an income of seven hundred and eighty thousand dollars ($780,000) or less at the end of the year. Thus, where the income (from all sources) is more than seven hundred and eighty thousand dollars ($780,000), it is optional to pay tax on income and the interest on their savings accounts.
The Withholding Tax deducted will set-off‑ against the amount of taxes to be paid when they submit their Income Tax Return to the Guyana Revenue Authority.
Persons who wish to be exempt from the Withholding Tax on interest earned on savings accounts are asked to apply to the Taxpayer Services Division of Guyana Revenue Authority and submit their original updated Bank Books or Statements for the previous year, and the Identification Card or passport for all individuals on the Account.
See Section 8 of the Income Tax Act Chapter 81:01 for more information.