Taxes
Can be distinguished into three main groups:

  1. Company tax
  2. Sales/Turnover tax
  3. Private tax

The tax system in Surinam is regulated in the Income Tax Law and the Law for Distribution of Dividends Tax

Company tax
Companies located in Surinam are subdued to corporation tax, which is based on their worldwide revenue after deduction of the company expenditure. Companies who only have a branch office in Surinam are only assesses for revenues received from their office in Surinam. Assessible are revenues from real estate located in Surinam and several less obvious kinds of Surinam source income.
An assessment for corporation taxes for people living in Surinam, with a businesses located there is determined by the height of their profit after deduction of certain reductions and possible support in case of a tax loss. The Surinam law gives the following definition of profit; all benefits received from company trade, regardless the name or form of these benefits. Capital benefits are regarded as profit and therefor assessed in the same way. This principle is implemented annually.

Payments are done during the current year based on a self assessment system. The corporation tax rate for Surinam companies and branch offices of foreign countries consists of one flat rate of 38% of the gross profit. The rough calculation of the assessable income of a company is determined as follows:

1. Company income ............................................  
2. Tax-deductible items ............................................ -/-
  ---------------------------------  

3. Profit

............................................  
4. Index compensation loss ............................................ -/-
5. Reservations ............................................ -/-
  ---------------------------------  
6. Assessable income

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Determination of the annual profit should be based on the so-called principle of "sound business management". This means that the annual profit should be determined according general valid accounting methods, with the exception of a situation in which specific conditions are contrary to the tax law. The annual profit expectation is dominated by the so-called "prudence concept".

Depreciation rates
All the costs for company management are tax-deductable, within the limits stipulated by the law ( good entrepreneurship). Expenses made in regard to a company take-over are deductible. Interest is deductable if accounted in good conscience. There are no official compulsary demands for the stock ratio. However a Surinam company must be capable to fullfil its obligations as a result of interest payments and/or loan redemption in order to avoid the necessity for reassessment of the shares.
Depreciation must be based on "sound business management". The depreciation rate is based on the economic lifespan of goods. General reliable depreciation percentages are:

  • Buildings 2-5 %
  • Machines and production materials 10-20 %
  • Transportation means 25-33,33 %
  • Tools and assets with little value 100 %
  • Office equipment 20-50 %
  • Ofice furniture and fixed materials 10-20 %

Intangible assets, including goodwill, can be amortized over their usable life. For goodwill 2-5 years is common use. A detailed business administration is required.

Tax loss relief
Net tax losses can be postponed for a maximum period of 7 years. Tax loses during the first 3 years after the company's establishment can be postponed for an indefinite perod. In cases where both a start-up tax loss and a regular tax loss can be postponed, the latter will be executed first. For tax loss with a Surinam branch office the same rules apply.

Dividend tax
On the dividend received by a foreign company from its branch office in Surinam there is a 25% tax withholding. For a withholding, the domiciling and the payment liability the distributing company is accountable. For interest, royalties, management fees and fees payed for technical support etc. payed by a Surinam branch office to its parent company, there is no withholding . In the end, it all comes down to the fact that a company first has to pay its income tax( 38%) and when a dividend is distributed the shareholder has to pay 25% dividend tax.

The investment law of 1960 has a stipulation for a participation exemption for entities. When a parent company contributes its total share capital to a subsidiary company, the parent company has no activities as such. In this case all tax liability is transfered to the subsidiary company. When a subsidiary company decides to distribute dividend to the parent company, the regulation regarding participation exemption comes to effect, which means that there is no dividend tax liability. This does not apply by analogy for private shareholders.

The Income Tax Act foresees in stipulations to avoid a double taxation. In accordance with the Income Tax Act
it is possible for the Surinam authorities to decide by State Decree for a total or partial tax exemption for a company. Surinam has a tax agreement with the Dutch government in order to avoid double taxation.

In regard to the application of special tax incentives, it is common for large foreign investments, to make special arrangements with the Surinam government.

Sales/Turnover tax
The turnover tax is charged to the local produre of goods, and to the importers of goods. The tariff is 7% for goods and 5% for services. raw materials, attributes, semimanufactured goods and packing materials have a 0% tariff.

Private Tax
Individuals permanently living in Surinam are assessed for their worldwide income, wherever received. The net income is the difference between the total income and tax-deductable expenses, tax-deductable company expenses and the personal base allowance. Individuals not permanently living in Surinam are assessed for their net Surinam income, the total income generated in Surinam, minus the tax-deductable losses made in Surinam and interest on debts secured from a mortgage on real estate in Surinam. For income tax there is a payment exemption of 420.000,- Surinam guilder (Sf). The income rates are provide in the following table.

Annual assessable income (Sf) Rate (%)
   
420.000 - 1.680.000 10
1.680.000 - 2.940.000 20
2.940.000 - 4.550.000 30
4.550.000 and more 40

Source: Tax folder composed by Mr. Robby Makka