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Guyana: withholding tax on income derived by resident contractors clarified

On 30 March 2017, the Revenue Authority issued a press release clarifying the transactions to which withholding tax on contractors' earnings applies.

The press release states that, under section 39 (13) of the Income Tax Act (ITA), payments exceeding GY$ 500,000 made to contractors (resident companies or individuals as defined in section 39 (14) of the ITA) on the basis of contracts (written contractual agreements) are subject to withholding tax of 2% for each payment.

The tax withheld is treated as advance payments made to the contractors.

The Revenue Authority clarified that the 2% withholding tax does not apply to commercial activities involving trade in goods and/or services "such as those made by rice millers to rice farmers for paddy."

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