Suriname VAT, GST, and Sales Tax Guide

Suriname

Suriname GMT -3

EY

Cornelis Jongbawstraat 17 Paramaribo Suriname

Indirect tax contacts

Rose Boevé

+59 (99) 430-5076 (resident in Willemstad, Curaçao) rose.boeve@an.ey.com

Kimberly Schreuders +597 7100-966 kimberly.schreuders@an.ey.com

Plans to replace the turnover tax (TOT) with a value-added tax (VAT) system in Suriname are ongoing, with an expected date of introduction of 1 July 2022. However, at the time of preparing this chapter, the exact timing of this is unknown.

A. At a glance

Name of the tax

Turnover tax (TOT)

Local name Omzetbelasting (OB)

Date introduced 30 December 1997

Trading bloc membership Caribbean Community and Common Market (CARICOM) Administered by Inspection of taxes (https://belastingdienst.sr/)

TOT rates

Standard rate

12%

Other 25%, zero-rated (0%) and exempt

TOT number format

XXXXX (5 digits)

TOT return periods Monthly

Thresholds None

Recovery of TOT by non-established businesses No

B. Scope of the tax

TOT applies to the following transactions:

• The supply of services in Suriname by a taxable person as part of its business

• The delivery of goods that are produced in Suriname by a taxable person

• The import of goods in Suriname

C. Who is liable

In principle, a taxable person is a business entity or individual who delivers goods or performs services (tax activities) in Suriname.

Exemption from registration. The TOT law in Suriname does not contain any provision for exemp tion from registration.

Voluntary registration and small businesses. The TOT law in Suriname does not contain any pro vision for voluntary registration.

A small business that is a resident individual that has a turnover of SRD24,000 or less per calen dar year will not be liable to register and account for TOT. It will not be required to submit TOT returns for monthly periods if a request is filed with and granted by the tax authorities. Once granted, the approval will be valid for two years. Once this term has elapsed, a new request can be submitted.

Small businesses that are not liable for TOT and are not required to submit TOT returns will also not be able to deduct the TOT incurred.

Group registration. Group TOT registration is not allowed in Suriname.

Non-established businesses. A “non-established business” is able to register for TOT in Suriname. The Suriname TOT law does not contain a definition of a “non-established business.” This qualification is relevant to determine the location of the taxable event and who the taxable person is. Additionally, there are no special rules for non-established businesses.

Tax representatives. A taxable person may be represented by a third party based on a power of attorney or a license from the Tax Inspector. A tax representative is not a mandatory requirement for a non-established business, it is optional.

Reverse charge. For services provided in Suriname by a non-established business to a resident taxable person, the reverse-charge mechanism applies. In this case, the resident taxable person that receives these services is liable for TOT and must report and pay TOT on these services.

Domestic reverse charge. There are no domestic reverse charges in Suriname.

Digital economy. There are no specific rules or law relating to the digital economy.

Nonresident providers of electronically supplied services for business-to-consumer (B2C) supplies will be required to register and account for TOT in Suriname, as there is no registration threshold.

Nonresident providers of electronically supplied services for business-to-business (B2B) sup plies will not be required to register and account for TOT in Suriname. Instead, the customer will be required to self-account for the TOT via the reverse-charge mechanism (see the Reversecharge subsection above).

There are no other specific e-commerce rules for imported goods in Suriname.

Online marketplaces and platforms. No special rules exist for online marketplaces and platforms in Suriname.

Registration procedures. To register, an applicant must submit a registration form in hard copy along with certain requested documentation to the tax authorities. Completion of the registration process should take approximately one week. When registering a business for TOT, copies of the following documents must be submitted with the application.

In case of a sole proprietorship/contractor:

• ID card/passport

• Chamber of commerce registration

• Business license, if required

In case of a NV/BV/other legal entities the following documents should also be submitted:

• Deed of incorporation

• Chamber of commerce registration

• Power of attorney of the local representative

• ID card/passport of the local representative

Deregistration. There is no threshold and there are no specific conditions to deregister. Also, the chamber of commerce doesn’t provide for a specific instruction on how a taxable person dereg isters from TOT. To deregister with the tax authorities, a taxable person should provide proof of deregistration as issued by the Suriname Chamber of Commerce. The deregistration with the tax authorities should be completed once all tax filing and payment obligations have been met.

Changes to TOT registration details. There are no specific requirements in Suriname to notify the tax authorities of changes to TOT registration details. It is recommended to notify the tax authorities of any change, but there is no law prescribing this.

D. Rates

The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of TOT, including the zero-rate.

The TOT rates are:

• Standard rate: 12%

• Special rate: 25% (luxury goods)

• Zero-rate: 0%

The standard rate of TOT applies to all supplies of goods or services unless a specific measure provides for a special rate, the zero rate or an exemption.

Previously, the standard rate of TOT was 8% for services and 10% for the delivery and import of goods. From 1 October 2021, the TOT rate is 12% for all three taxable events, i.e., services, delivery and import of goods.

Examples of goods and services taxable at 0%

• Exports (to qualify for the 0% TOT rate, export documentation issued by customs must be in place)

Examples of goods and services taxable at 25%

• Video cameras

• Motorbikes

• Automobiles and other motor vehicles for passenger transport

• Television larger than 31 inches

• Speedboats, water scooters and yachts

• Weapons and munition

• Fireworks

The term “exempt supplies” refers to supplies of goods and services that are not liable to TOT and that do not qualify for input tax deduction.

Examples of exempt supplies of goods and services

• Goods related to the so-called “primary necessities of life.” The government publishes an exhaustive list, some examples are provided below: Cheese Butter

Fresh fish Fresh potatoes Vegetables Fruits Salt

Examples of items for which input tax is nondeductible

• Input tax due on services to a manufacturer with services that are not directly related to the production of taxable goods by this manufacturer in Suriname.

Examples of items for which input tax is deductible (if related to a taxable business use)

• Input tax due on the delivery of raw materials to a manufacturer with raw materials that are used by this manufacturer in Suriname for the production of taxable goods.

Partial exemption. Input tax directly related to making exempt supplies is not recoverable. If a taxable person makes both exempt and taxable goods and services, it may recover input tax par tially.

If the same taxable inputs are attributable to both taxable and exempt supplies, the portion of the deductible general input tax is determined based on the proportion of taxable supplies to total supplies. Approval from the tax authorities is not required to use the partial exemption standard method in Suriname. Special methods are not allowed in Suriname.

Capital goods. There are no specific regulations that apply to the refund of TOT for capital goods in Suriname. As such, the normal input tax recovery rules apply.

Refunds. Under certain conditions, refunds of TOT paid with regard to the delivery of goods can be granted to a resident taxable person in the event that such taxable person is in a disadvanta geous competitive position. To obtain a refund, a written request should be submitted to the tax authorities. However, in practice the refund process is a very timely process, and refunds do not get paid out in a timely manner.

Pre-registration costs. Input tax incurred on pre-registration costs in Suriname is not recoverable.

Bad debts. Output tax accounted for on supplies that do not get paid by the recipient (i.e., a bad debt) cannot be recovered in Suriname.

Noneconomic activities. Input tax incurred on purchases that are used noneconomic activities is not recoverable in Suriname.

G. Recovery of TOT by non-established businesses

Input tax incurred by non-established businesses in Suriname is not recoverable.

H. Invoicing

TOT invoices. A taxable person must issue invoices that are dated and numbered for all taxable delivery of goods and services. The invoices, which contain the TOT due, must be issued within 15 days after the end of the month in which the goods are delivered or in which the services are provided.

Credit notes. Credit invoices are possible in Suriname, but they are not captured by any statutory regulation. Invoices are less relevant in the Suriname TOT system as the TOT is calculated on the compensations received; that’s why reference is made to “cash accounting system.” Therefore, whatever the supplier (eventually) receives is the basis of the TOT.

There is a rule that whatever amount is charged by the supplier as TOT should be reported and paid to the tax authorities. So, a business can end up in a position that a compensation is received and a TOT return and payment with the tax authorities is done and that afterward a return or price reduction occurs. There is no specific regulation dealing with this situation.

Electronic invoicing. Electronic invoicing is not allowed in Suriname.

Simplified TOT invoices. Simplified TOT invoices are not allowed in Suriname. As such, full TOT invoices are required.

Self-billing. Self-billing is not allowed in Suriname.

Foreign currency invoices. Upon request of the customer, invoices can be issued in USD. At the time of preparing this chapter, the value of the domestic currency, the Suriname dollar (SRD) has stabilized. However, it is common practice that significant transactions are invoiced in a foreign currency.

Proof of export. There is no special regulation included in the Suriname TOT legislation with regard to invoices in case of export. However, documents of transportation are sufficient for proof of export in Suriname, to evidence the zero-rating.

Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Suriname. As such, full TOT invoices are required. Invoices should always be issued by the supplier if the delivery of the good or service falls within the scope of the turnover tax. As such, the status of the client is irrelevant, i.e., even if they are retailers. Under Suriname TOT, there is no special category as “nontaxable persons.”

Records. Taxable persons are required to keep records of their assets and of everything relating to their business in such a manner that at any time their rights, obligations and all other informa tion relevant for tax purposes are clear and readily available within a reasonable time frame upon request from the tax authorities. Copies of all AR invoices and relevant AP invoices for services must be kept, as well as export documentation. It is unclear whether such records can be kept outside Suriname, as the practice around this is very nontransparent. However, in practice it is recommend holding such records in Suriname.

Record retention period. Record retention period is 10 years.

Electronic archiving. No special regulation is included in the Suriname TOT legislation with regard to electronic archiving. In practice, it’s possible so long as the taxable person can provide the documents needed within an acceptable time period.

I. Returns and payment

Periodic returns. TOT returns are generally submitted for monthly periods. Returns must be filed and TOT due must be remitted before the 16th day of the month following the end of the report ing period. The TOT due for the period must be remitted together with the return.

Periodic payments. TOT due must be remitted before the 16th day of the month following the end of the reporting period. The TOT due for the period must be remitted together with the return. TOT can be paid in person at the tax authorities or via a wire transfer.

Electronic filing. Electronic filing is allowed but not mandatory in Suriname. TOT returns can be submitted via email, especially during COVID-19. However, electronic filing is not supported by the tax authorities and there is no provision in the legislation on this. As such, paper submission is required.

Payments on account. Payments on account are not required in Suriname.

Special schemes. No special schemes are available in Suriname. The cash accounting basis is not a special scheme, as it is one of the general basics that apply to all businesses in Suriname.

Annual returns. Annual returns are not required in Suriname.

Supplementary filings. No supplementary filings are required in Suriname.

Correcting errors in previous returns. In case a taxable person needs to correct any errors, it will need to file a new return over the respective period or a reconciliation return. It can also file an objection against an incorrectly filed return and thus reclaim an overpayment.

Digital tax administration. There are no transactional reporting requirements in Suriname.

J. Penalties

Penalties for late registration. No specific penalty is imposed for late registration. However, if late registration results in a late payment of TOT or late submission of TOT returns, penalties may be imposed.

Penalties for late payment and filings. TOT penalties are assessed for the late submission of a TOT return or for the late payment of TOT due in the following amounts:

• For the late submission of a TOT return, the fine can vary between SRD10 and SRD1,000

• For the late payment of TOT due, the penalty can vary between SRD10 and SRD1,000

• If the late payment is caused by negligence or intent, penalties ranging from 5% to 100% of the outstanding TOT due may be imposed

Penalties for errors. The penalties outlined above for late payment and filings, also apply for penalties for errors.

Penalties for fraud. In Suriname, tax fraud occurs when the taxable person by any action or omis sion commits fraud against the tax authorities by incorrectly computing the amount of tax due. TOT fraud is punishable by a term of imprisonment of three months, or the penalty is set at not more than SRD5,000, or if the amount of the TOT that should be paid is higher, the penalty is set at a maximum of 300% on all TOT that still has to be paid.

Personal liability for company officers. There is no personal liability for TOT for company officers in Suriname. However, in case of criminal proceedings against a legal person/taxable person, the judge can order the personal appearance of a director.

Statute of limitations. The statute of limitations in Suriname is five years. In general, it is five years after the ending of the financial year during which the TOT due arose. In case the TOT due is (partially or entirely) not paid by the taxable person (following action by the taxable person with intent or gross negligence), the statute of limitations is 10 years.