Sudan VAT, GST, and Sales Tax Guide

South Sudan

South Sudan GMT +3

Please direct all queries regarding South Sudan to the persons listed below in the Nairobi, Kenya, office.

Indirect tax contacts

Hadijah Nannyomo +254 729 847 195 hadijah.nannyomo@ke.ey.com

Nelson Ngaira +254 20 288 6000 nelson.ngaira@ke.ey.com

A. At a glance

Name of the tax

Sales tax (ST)

Local name Sales tax (ST)

Date introduced 27 November 2012

Trading bloc membership East Africa Community (EAC)

African Continental Free Trade Area (AfCFTA) – At the time of preparing this chapter, South Sudan is a member of AfCFTA, but has not yet ratified the agreement to become a State party under the Agreement

Administered by National Revenue Authority (NRA) (https://nra.gov.ss/)

ST rates

Standard 18% Other Exempt

ST number format

Tax identification number (TIN) 123-345-678

ST return periods Monthly

Thresholds

Registration

More than SSP12,000 for services and SSP100,000 for goods

Deregistration Less than SSP12,000 for services and SSP100,000 for goods

Recovery of ST by non-established businesses No

B. Scope of the tax

Sales tax (ST) applies to the following transactions:

• Production of goods in South Sudan

• Importation of goods into South Sudan

• Specified services (include hotel, restaurant and bar services)

Please note that ST does not apply after production and goods are exported from South Sudan. Exports are outside the scope of ST (i.e., not subject to the standard rate nor exempt).

C. Who is liable

Tax registration in South Sudan is universal for all taxes. Each legal person is required, if liable, to register for ST. This is where any persons who manufacture goods or supply prescribed ser vices (hotel and bar services) are subject to ST.

Exemption from registration. The ST law in South Sudan does not contain any provision for exemption from registration.

Voluntary registration and small businesses. The ST law in South Sudan provides for mandatory ST registration for businesses supplying specified services worth more than South Sudanese pound (SSP)12,000 per year. Whereas for local producers the registration threshold is set at sup plies worth more than SSP100,000. A business may register for tax including ST if its taxable turnover is less than SSP12,000 for specified services and SSP100,000 for local producers.

Group registration. Group ST registration is not allowed in South Sudan.

Non-established businesses. All businesses are treated the same for tax purposes, including nonestablished businesses. As such, there are no special rules for non-established businesses. However, in cases of restaurant and bar services, non-established businesses that have an annual turnover of less than SSP12,000 or those that do not have a sitting area for customers are exempted from ST. Other non-established domestic producers making taxable supplies with a turnover of less than SSP100,000 are also exempted.

Tax representatives. The ST law in South Sudan allows a taxable person to appoint a tax advisor to represent it on tax matters. A tax representative, a position that carries more responsibility compared to a tax advisor, is not provided in the ST law. However, in South Sudan, these two can be used interchangeably. There is no distinction between the two. A tax advisor is the same as a tax representative, as long as they are an outside agent to the taxable person they are appointed to represent.

Reverse charge. The reverse charge does not apply in South Sudan. ST is not applicable on ser vices purchased abroad, meaning no ST is accounted for imported services. For goods purchased abroad, taxable persons must account for ST at the point of clearing the goods through customs. Subsequently, they are not required to file any return if their ST is through importation only.

Domestic reverse charge. There are no domestic reverse charges in South Sudan.

Digital economy. No special rules exist for the digital economy in South Sudan. Nonresidents providing electronically supplied services for both business-to-business (B2B) and business-to-consumer (B2C) are not required to register and account for ST in South Sudan. The reverse-charge mechanism does not apply in South Sudan, and as such no ST is accounted for on imported services. See the Reverse-charge subsection above.

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

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

Registration procedures. Tax registration is performed by making a written application to the National Revenue Authority (NRA). The application includes a cover letter, a completed pre scribed form, certificate of registration, Chamber of Commerce certificate, operating license and lease agreement. The NRA may request for a site visit before registering a person for tax.

Deregistration. Tax deregistration can occur under any of the following circumstances:

• An incorporated entity closes down, ceases to exist, sells or transfers a business

• In the case of a sole proprietorship, if the individual dies

• In the case of a partnership, if it is dissolved or there is a change of a partner

• The legal status of the registered person changes

• If a person is registered in error

• In any other case as may be provided by law or regulations

Changes to ST registration details. Every registered taxable person must provide the Director General of Taxation with notice in a prescribed form of any changes in the information pertaining to registration details within 15 days of such change.

Until the date that the Director General of Taxation receives notice of such change, all informa tion in the application for registration shall be deemed to be correct for the purposes of the Taxation Act, in particular, for the purpose of any liability for tax, penalty, additional charge or interest due under the Act. As such, no penalties apply.

D. Rates

The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of ST.

The standard ST rate is 18%.

The standard rate of ST applies to all goods and services liable to ST.

Exemption from ST is on a case-by-case basis. These exemptions are only granted to diplomatic missions or donor funded projects based on agreements with government of South Sudan.

E. Time of supply

The time of supply rule for produced goods is when goods are released outside the production premises.

The time of supply rule for services is when services are provided.

Deposits and prepayments. There are no special time of supply rules in South Sudan for deposits and prepayments. As such, the general time of supply rules apply (as outlined above).

Continuous supplies of services. There are no special time of supply rules in South Sudan for supplies of continuous supplies of services. As such, the general time of supply rules apply (as outlined above).

Goods sent on approval for sale or return. There are no special time of supply rules in South Sudan for supplies of goods sent on approval for sale or return. As such, the general time of supply rules apply (as outlined above).

Reverse-charge services. Reverse charge is not applicable on services purchased abroad, as no ST is due on imported services.

Leased assets. There are no special time of supply rules in South Sudan for supplies of leased assets. As such, the general time of supply rules apply (as outlined above).

Imported goods. The time of supply rule for imported goods is at the time the importation is completed.

F. Recovery of ST by taxable persons

ST cannot be recovered in South Sudan.

G. Recovery of ST by non-established businesses

ST cannot be recovered in South Sudan. As such, input tax incurred by non-established busi nesses in South Sudan is not recoverable.

H. Invoicing

ST invoices. It is mandatory for transactions requiring collection of ST to be accompanied by an invoice detailing the name of the business, taxpayer identification number, description of sale, sale value and ST applicable. This, however, does not include transactions at the time of import.

Credit notes. South Sudan law does not provide detail for the issuance of credit notes. However, in practice, credit notes and similar adjustments and other related transactions should be treated in a similar manner as invoices.

Electronic invoicing. Electronic invoicing is not allowed in South Sudan.

Simplified ST invoices. Simplified ST invoicing is not allowed in South Sudan. As such, full ST invoices are required.

Self-billing. Self-billing is not allowed in South Sudan.

Proof of exports. On exportation, at the point of exit, the South Sudan customs office will sign off and stamp export declaration forms, which serve as evidence of goods having left South Sudan.

Foreign currency invoices. ST invoices can be issued in another currency, as well as the domestic currency, which is the South Sudanese pound (SSP). However, for reporting purposes, any trans action that is recorded in or effected in a foreign currency must be converted into SSP at the prevailing market rate.

Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in South Sudan. As such, full ST invoices are required.

Records. There are no special record-keeping rules for ST. Taxable persons must keep all records of daily sales of goods or provision of services subject to tax, including the amount of each transaction. Other records to be kept are transactions completed but not yet invoiced, any nontax able transaction, and payments of goods and services, including amount paid and the name and address of the supplier. There are no specific provisions on where the records must be stored.

Record retention period. Records must be kept for at least six years. Each taxable person must keep accounts of all transactions and these accounts must be made available in South Sudan for inspection by a revenue officer.

Electronic archiving. Electronic archiving is allowed in South Sudan, but not mandatory.

I. Returns and payment

Periodic returns. Returns must be filed on a monthly basis along with the payment of the tax due. Upon payment of the tax, a tax receipt is issued by the receiving bank. This tax receipt, together with the completed tax return and any other supporting documents, should then be submitted to the nearest NRA office. ST returns must be submitted monthly by 15th of every month.

Periodic payments. ST due must be paid by the same date as the ST return submission deadline of the 15th of every month. Monthly payments are made directly through a designated commercial bank using a prescribed form.

Electronic filing. Electronic filing is not allowed in South Sudan. Taxable persons must present a hard copy return to the nearest tax office in South Sudan.

Payments on account. Payments on account are not required in South Sudan.

Special schemes. No special schemes are available in South Sudan.

Annual returns. Annual returns are not required in South Sudan.

Supplementary filings. No supplementary filings are required in South Sudan.

Correcting errors in previous returns. Filing in South Sudan is done manually by filling out the prescribed returns and presenting them to the NRA. To correct an error previously done, the tax able person must prepare and submit a new return to NRA together with payment receipts if required. The process is manual so physical filing must be done.

Digital tax administration. There are no transactional reporting requirements in South Sudan.

J. Penalties

Penalties for late registration. Late registration for ST attracts a penalty of SSP500 for each month or part month during which such failure to register continues. Additionally, criminal charges may be brought against person(s) who fail to register for ST.

Penalties for late payment and filings. Late filing of ST returns attracts a penalty of 5% per month for each month the ST return remains unfiled, up to a maximum of 25%. Additionally, late pay ment of ST attracts a penalty of 5% per month for every month the ST remains unpaid. This penalty is not capped.

A monthly interest rate of unpaid tax is at the rate of 120% of average interbank lending rates. At the time of preparing this chapter, the tax authority is using a flat interest rate of 3.6% per month.

Penalties for errors. Where there is an understatement of ST, the following penalties may apply:

• Less than 25% of the tax due, the taxable person shall be liable to a 10% penalty of the under statement

• Exceeds 25% of the tax due, the taxable person shall be liable to a 50% penalty of the understatement

• Exceeds twice the times of the tax due, the taxable person shall be liable to a penalty of between 100% to 200% of the understatement

• If the error is voluntarily disclosed by the taxable person, the taxable person shall be liable to a penalty of 5% of the understatement

For changes to a taxable person’s registration details, for late notification, or failure to notify, no penalties apply.

Penalties for fraud. Penalty for fraud is not specifically provided in the ST law in South Sudan. However, any offense specifically not provided in law when adjudicated for can attract a maxi mum penalty of one year in prison.

Personal liability for company officers. Company officers cannot be held personally liable for errors and omissions in ST declarations and reporting in South Sudan.

Statute of limitations. The statute of limitations in South Sudan is three years. This is from the date the tax return was filed or the date the tax return was due. The above notwithstanding, an assessment may be made at any time where a taxable person with the intent of evading the pay ment of tax fails to file a return, files a return that is determined to be incorrect or commits fraud by or on behalf of a person in relation to tax liability.

At the time of preparing this chapter, there is no legislation on a set time period for a taxable person to voluntarily correct errors. In practice, the taxable person notifies the Commissioner and amends the return, paying requisite taxes and penalties that may accrue. There is an option to apply for waiver, which is at the desecration of the NRA.