Paying Taxes in Liberia

The Ministry of Finance is the regulatory body for all Tax matters in Liberia. The Ministry controls taxes from internal revenue and custom duties. The internal revenue are revenue generated internally excluding import duties, export duties, and Goods and Services Tax levied on imports.

In this issue:

Internal Revenue:

LICENSE AND REGISTRATION

The law requires institutions that want to do business in Liberia to file Article of Incorporation with the Ministry of Foreign Affairs which is the first step to establishing a business in Liberia.. The cost to process the Article of Incorporation of a Foreign Company is approximately US$850.00 excluding other miscellaneous processing fees.

All business operating in Liberia are to obtain a business registration certificate from the Ministry of Commerce and Industry. The cost of the main branch is US$900.00 and subsequent branches opened are to pay 50% of the amount mentioned above. Amount is payable 90 days after establishment and on or before the 31-March of each year.

All business operating in Liberia are to pay for business license and professional license for its corporation in the amount of LRD$4,200.00 per annum. The grace period of ninety days is the same as the above.

All vehicles operating in Liberia are to be register at the Ministry of Transport. Payment to be made at the Ministry of Finance base on the bill receive from the Ministry of Transport. The cost to process vehicle registration varies from US$100-1,200.

To be continued....


INCOME TAXATION

CORPORATE TAX

All businesses are required by the Revenue Code of Liberia Act of 2000 to make advance income tax payments at the value of the prior year liability or 2% of current turnover, whichever is higher. payment period is on or before the 10th day after each quarter.

All businesses with annual turnover of L$5,000,000(Five Million) and above to file with the Ministry of Finance a Corporate Tax Return detailing the financial activities of its fiscal year. Filing and payment of corporate tax is to be made within three months after the end of each fiscal year at a rate of 35%.

If the amount is below the amount of L$ 5,000,000 the applicable rate is 30% and the quarterly payment is 4%.

The law requires that taxes be deducted from employees using the tax table available in section 200, of the Revenue Code of Liberia Act of 2000. Also before the computation is done, the entity should wave US$70 of the employee Salary(EXECUTIVE ORDER No 14.)

If a person makes less than US$70, he is not subject to personal income Tax. If an employee makes 100.00, we waive 70 and comppute tax on the 30.00.

To be continued....

NASSCORP WITHHOLDING

The law requires that all businesses operating in Liberia to deduct on a monthly basis 3% of each employee's gross salary and pay it on a monthly basis to the National Social Security and Welfare Corporation (NASSCORP) as contribution towards the pension scheme of the employee. Also management shall compute 4.75% of the employee gross salary an pay it to NASSCORP as contribution to the National pension Scheme 3%, and Inquiry Scheme 1.75%.

INVESTMENT INCENTIVES

To be continued.......

IMPORT AND EXPORT DUTY PROVISION
GOODS AND SERVICE TAX (GST)

ACCOUNTING PROVISIONS

REAL PROPERTY TAX

REPARTRIATION OF FUNDS

Withholding on the following:
Category Resident Non-Resident
Interest 10% 15%
Rent 10% 15%
Dividend 10% 15%
Royalties 10% 15%
License fees 10% 15%
Contract svcs 10% 15%
Gambling 30% 30%
other similar payments 10% 20%

To be continued...........