Suriname Corporate Tax Guide

Suriname

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Please direct all requests regarding Suriname to the persons listed below in the Paramaribo, Suriname, office or in the Willemstad, Curaçao, office.

Paramaribo GMT -3

EY +597 749-9460

Cornelis Jongbawstraat 17 Paramaribo Suriname

Principal Tax Contacts

Bryan D. Irausquin

+599 (9) 430-5075

Mobile: +599 (9) 660-0707 Email: bryan.irausquin@an.ey.com

Fong-Mang Cheong +599 (9) 430-5071

Mobile: +599 (9) 525-2920 Email: fong-mang.cheong@an.ey.com

Kimberly N. Schreuders +597 749-9460

Mobile: +597 710-0966 Email: kimberly.schreuders@an.ey.com

A. At a glance

Corporate Income Tax Rate

Capital Gains Tax Rate

Tax Rate (%)

Tax

Royalties from Patents, Know-how,

Remittance

Operating Losses

Losses incurred by companies during their first three years of business may be carried forward indefinitely.

B. Taxes on corporate income and gains

Income tax. Income tax is levied on resident and nonresident com panies. Resident companies are those incorporated under Suriname law, even if their management is located abroad, as well as com panies incorporated under foreign law, but effectively managed and controlled in Suriname.

For resident companies, income tax is, in principle, levied on the aggregate amount of net income earned from all sources during the company’s accounting period. In principle, nonresident com panies are subject to Suriname income tax on the following spe cific Suriname income items:

• Income derived from a permanent establishment in Suriname

• Income derived from real estate located in Suriname and/or debt claims secured by mortgages on real estate located in Suriname

• Income derived from rights to the profit of an enterprise of which the management is located in Suriname

Nonresident companies are deemed to derive income from a per manent establishment in Suriname if they derive income from, among other activities, acting as an insurer and the exploration and exploitation of natural resources, such as oil and gas.

Tax rates. During the period of 1 February until 31 December 2021, an increased corporate income tax rate of 46% applied to the taxable profit exceeding SRD150,000. Effective from 1 January 2022, this so-called solidarity levy of 10% is discon tinued. Consequently, a flat corporate income tax rate of 36% again applies to the entire taxable profit, effective from 1 January 2022.

Tax incentives. Tax incentives, such as tax holidays, may be granted to new business enterprises engaged in certain activities. Business enterprises engaged in, among other activities, mining and tourism may apply for several tax incentives such as acceler ated depreciation and fiscal unity. A written letter of request for the granting of a tax incentive must be filed with the Suriname tax authorities.

Capital gains. No distinction is made between the taxation of capi tal gains and the taxation of other income. All income is taxed at the income tax rate of 36%.

Administration. The taxable amount is the profit realized in a fis cal year or calendar year.

The final tax return must be filed within six months after the end of the financial year. Any difference between the tax due based on the provisional return and the tax due based on the final return must be settled at the time the final return is filed. Companies must file a provisional tax return before 15 April of the current calendar year or within two and one-half months after the begin ning of the current fiscal year. In principle, this return must show a taxable profit that is at least equal to the taxable profit shown on the most recently filed final tax return.

In principle, the tax due on this provisional tax return may be paid at once or in four equal installments, by 15 April, 15 July, 15 October and 31 December or within two and one-half months after the beginning of the current fiscal year and subsequently by the end of every three months. If the provisional tax is paid at once, it must be paid by the due date for the filing of the provisional tax return, which is in general 15 April for a financial year corresponding to the calendar year.

An extension of time to file the return and pay the tax later than 31 December is not granted. On request of a company, the Tax Inspector may consent to the reporting of a lower taxable profit than the taxable profit shown on the most recently filed final tax return. To obtain such consent, a request should be filed with the Suriname tax authorities before 15 February or within one and one-half months after the beginning of the current fiscal year.

The tax authorities may impose arbitrary assessments if the tax payer fails to file a tax return. Additional assessments may be imposed if insufficient tax is levied when tax returns are filed or when arbitrary assessments are imposed. Depending on the de gree of wrongdoing, a penalty of up to 100% of the additional tax due may be levied.

Dividends. In principle, a 25% withholding tax is imposed on dividends distributed by resident companies. Dividends distributed by resident companies to qualifying resident companies are exempt from Suriname dividend withholding tax. For this pur pose, the following are qualifying resident companies:

• Investment companies conducted as limited liability companies that exclusively or almost exclusively aim to acquire, hold, man age and sell shares

• Other Suriname resident companies that continuously held the shares in the payer of the dividends from the beginning of the year from which the distributed profits derive, provided that the recipient and payer are not mutual shareholders (entities that hold shares in one another)

Withholding tax is not imposed on remittances of profits by branches to their foreign head offices.

Participation exemption. In principle, dividend distributions re ceived from qualifying resident companies and qualifying nonresident companies are exempt from Suriname income tax. For dividends received from qualifying nonresident companies, the participation exemption applies if, among others, the following conditions are met:

• The share interest held in the nonresident company is in line with the business activities of the company receiving the dividend distribution. The share interest held in the nonresident company is regarded to be in line with the business activities of the com pany receiving the dividend distribution if the recipient holds at least 10% of the nominal paid-up capital of the payer of the dividends.

• The nonresident company is subject to a tax on profit in its country of residence.

Foreign tax relief. No foreign tax relief is available under domestic law. Foreign tax relief may be available under the tax treaties entered into with Indonesia and the Netherlands.

C. Determination of taxable income

General. Taxable income must be calculated in accordance with “sound business practices.”

In principle, all expenses incurred with respect to the conducting of a business are deductible. However, if expenses exceed normal arm’s-length charges and are incurred directly or indirectly for the benefit of shareholders or related companies, the excess is consid ered to be a nondeductible profit distribution (dividend).

In principle, interest expenses are deductible for tax purposes if the interest rate is determined on an arm’s-length basis.

No thin-capitalization requirements apply in Suriname under the Suriname tax legislation.

Inventories. Inventories are generally valued using the historicalcost, first-in, first-out (FIFO) or weighted-average methods.

Depreciation. Depreciation may be calculated using the straightline, declining-balance or other methods that are in accordance with “sound business practices.”

Relief for losses. Losses in a financial year may be carried forward for seven years. No carryback is available. Losses incurred by companies during their first three years of business may be carried forward indefinitely.

D. Other significant taxes

The following table summarizes other significant taxes.

Nature of tax Rate (%)

Sales tax in Suriname; a general consumption tax on the delivery of services by an entrepreneur as part of its business in Suriname, the delivery of goods produced in Suriname by a Suriname producer and the importation of goods into Suriname 12 (It is expected that effective from 1 July 2022, the value-added tax will be introduced to replace the currently applicable sales tax.) Import duties 0 to 52

E. Miscellaneous matters

Foreign-exchange controls. The currency in Suriname is the Suriname dollar (SRD).

In general, a foreign-exchange permit is required for the move ment of capital with respect to certain transactions including, but not limited to, the following:

• Loans issued by nonresidents of Suriname

• Real estate transactions in which one of the parties is a nonresi dent of Suriname

• Capital proceeds (profits and dividends)

• Incorporation of a limited liability company in accordance with the laws of Suriname if the company is located in Suriname and if one of the incorporators or shareholders is a nonresident of Suriname

• Purchase or sale of the shares of a limited liability company established in Suriname by a nonresident of Suriname

Specific guidelines for exchange control apply in the case of a petrol agreement: an agreement concluded between a state enter prise and a contractor for the survey, exploration and exploitation of petrol in specified areas of Suriname.

Transfer pricing. In general, intercompany charges must be deter mined on an arm’s-length basis.

F. Tax treaties

Suriname has entered into tax treaties with Indonesia and the Netherlands. These treaties contain provisions to avoid double taxation between Suriname and these countries regarding taxes on income.