Sudan Individual Tax Guide

South Sudan

Nairobi, Kenya GMT +3

EY Street address: Mail address: Kenya Re Towers P.O. Box 44286-00100 Off Ragati Road Nairobi Nairobi Kenya Kenya

Executive and immigration contacts

Hadijah Nannyomo +254 288-6000 Email: hadijah.nannyomo@ke.ey.com

Nelson Ngaira +254 288-6000 Email: nelson.ngaira@ke.ey.com

A. Income tax

Who is liable. Individuals who are resident for tax purposes are subject to personal income tax (PIT) on their worldwide income while nonresident individuals are taxed on income that is sourced in South Sudan.

A resident individual is an individual who is domiciled in South Sudan or is physically present in South Sudan for 183 days or more in a tax year.

Income subject to tax. Individuals are subject to tax on various types of income, including, but not limited to, the following:

• Wages

• Income from entrepreneurial activities

• Income from the use of movable or immovable property

• Income from the use of intangible property

A recently introduced legislative change applies to individuals who do not receive regular monthly pay (salary). These are indi viduals who receive wages and individuals who are engaged in entrepreneurial activities. A 20% rate is applied to such income after deducting standard allowable expenses, which are set at 20% of the income. Other deductible expenses include fees paid by the individuals (this most likely would apply in the case of entrepreneurial activities) to relevant local authorities such as ground rates and town rates. These rates are charged by and paid to relevant local authorities in South Sudan to support delivery of services by the local authorities. Personal income tax on employ ment income (salary) is payable based on the tax rates set forth in the table in Tax rates.

Tax is withheld from dividends, interest, royalties, rent, technical fees (to nonresidents) and government contract payments (see Tax rates).

The following types of income are exempt from income tax:

• Wages received by foreign diplomatic and consular representatives and foreign personnel of liaison offices in South Sudan

• Wages received by foreign representatives, foreign officials and foreign employees of international governmental organizations

• If agreed on with the government of South Sudan, wages received by foreign representatives, foreign officials and foreign employees of donor agencies or their contractors or grant ees carrying out humanitarian aid, reconstruction work, civil administration or technical assistance

• Compensation for damages and proceeds of life insurance poli cies

• Dividends, rent, technical fees, government contract payments and interest income, if tax was withheld at source

Capital gains. Capital gains are recognized as business income. For individuals, capital gains are considered to be gross income subject to personal income tax.

Deductions

Pension deduction. An 8% pension contribution to a governmentrecognized funded retirement scheme is deductible in determin ing taxable income.

Business deductions. In general, expenses are deductible only if they are incurred wholly and exclusively to produce taxable income.

Accounting depreciation is not deductible, but capital allowances are available for deduction. A capital allowance is granted on either a straight-line or reducing-balance basis over the useful life of the asset. The assets are classified into the following four classes.

Class Annual depreciation rate (%)

Buildings and other structures 10 Vehicles, office equipment and computers 33 Other property 25 Intangible assets 10

Tax rates. The following tax rates apply to employment and selfemployment income.

Monthly taxable income Tax rate Tax due Cumulative tax due SSP % SSP SSP

First 2,000 0 0 0

Next 3,000 5 150 150

Next 5,000 10 500 650

Next 5,000 15 750 1,400

Above 15,000 20

Tax is withheld from dividends, interest, royalties, rent, technical fees and government contract payments as shown in the follow ing table.

Income category Tax rate (%) Persons subject to tax Dividends, interest and royalties 10 Residents and nonresidents Technical fees 15 Nonresidents only Rent and government contract payments 20 Residents and nonresidents

Relief for business losses. Losses may be carried forward to offset future profits from the same specified source. The loss may be

carried forward to the following five tax periods or years. Losses may not be carried back.

B. Other taxes

South Sudan does not levy property tax, net worth tax, inheri tance tax or gift tax.

C. Social security

The only social security tax levied in South Sudan is a pension contribution based on employment income. The rates of the con tribution are 17% for employers and 8% for employees.

D. Tax filing and payment procedures

Employee tax withholding. For employees, tax is withheld at source under the PIT system.

Returns. Resident individuals are not required to file an annual PIT return.

Assessment. A taxpayer may be assessed by the National Revenue Authority even after a self-assessment return is filed. The assessment is done within three years following the filing of the self-assessment return.

E. Double tax relief and tax treaties

Double tax relief. Resident individuals may offset tax paid over seas against tax payable in South Sudan on foreign income, up to the amount of tax payable in South Sudan.

Double tax treaties. South Sudan has not entered into any double tax treaties.

F. Temporary visas and passes

All visitors must have visas to enter South Sudan. Citizens of Uganda and a few other countries can obtain temporary visas at any entry point. Citizens of Kenya do not require an entry visa.

G. Work permits and self-employment

Work permits are issued for a period of one year. They are renew able on an annual basis.

H. Residence permits

A residence permit allows an alien to reside in South Sudan. A resident permit can either be special, ordinary or temporary.

Special residence permits. Special residence permits may be granted to the following:

• Aliens who have been continuously residing in South Sudan for a period of not less than three years

• Aliens who have lawfully stayed in South Sudan for more than five years and are carrying out scientific, technical and com mercial activities deemed by the Minister of Interior to be of value to South Sudan

A special residence permit is valid for five years and is renew able.

Ordinary residence permits. Ordinary residence permits may be granted to the following:

• Aliens who have been continuously residing in South Sudan for not less than five years

• Aliens who have lawfully resided in South Sudan for more than two years and are carrying out scientific, technical or commer cial activities deemed by the Minister to be of value to South Sudan

An ordinary residence permit is valid for two years and is renew able.

Temporary residence permits. Aliens not eligible for special or ordinary residence permits may be granted temporary residence permits.

A temporary residence permit is valid for 12 months and is renewable for periods of up to 12 months.

Other information. A residence permit is required for all foreign residents in South Sudan even for individuals who have a work permit. Work permit holders and their dependents must obtain resident permits when they enter South Sudan.

Visitors to South Sudan can be accompanied by their family members. Residence permits extend to the dependents of aliens.

The average processing period for visas is one to three weeks.

I. Family and personal considerations

Vaccinations. Individuals entering South Sudan must have the immunization certificate for yellow fever and a negative COVID19 test.

Driver’s permits. A driver’s license can be obtained from the police traffic headquarters under the Ministry of Interior. Copies of the driver’s license from the home country and passport are required for the application.