
Worldwide VAT, GST and Sales Tax Guide
Worldwide VAT, GST and Sales Tax Guide
Georgetown GMT-4
EY
Pegasus Suites & Corporate Centre, Suite 302
Seawall Road, Kingston Georgetown Guyana
Indirect tax contacts
Gregory Hannays +1 (868) 622-1364 (resident in Trinidad and Tobago) gregory.hannays@tt.ey.com
Colin Ramsey +1 (868) 822-5016 (resident in Trinidad and Tobago) colin.ramsey@tt.ey.com
Gail Marks +1 (592) 225-2835 gail.marks@tt.ey.com
Name of the tax
Value-added tax (VAT)
Local name Value-added tax (VAT)
Date introduced 1 January 2007
Trading bloc membership Caribbean Community and Common Market (CARICOM)
Administered by Guyana Revenue Authority (GRA) (https://www.gra.gov.gy)
VAT rates
Standard 14%
Other
Zero-rated (0%) and exempt
VAT number format 011111111 (9 digits)
VAT return periods Monthly
Thresholds
Registration GYD15 million (approximately USD75,000)
Recovery of VAT by non-established businesses No
VAT applies to the supply of goods and services by a taxable person in Guyana and to the importation of goods and services. The term “taxable supplies” is defined in the VAT Act as a supply of goods or services in Guyana in the course or furtherance of a taxable activity, other than an exempt supply.
Effective use and enjoyment. To avoid instances of non-taxation or double taxation, jurisdictions can apply “use and enjoyment” rules that allow a service that is “used and enjoyed” in the jurisdiction to be taxed or prevent a service that is “used and enjoyed” outside the jurisdiction from being taxed. If a service is taxed in the jurisdiction under the “use and enjoyment” provisions, a non-established supplier of the service may be required to register for VAT in every jurisdiction where it has customers that are not taxable persons. In Guyana, no services are subject to the “use and enjoyment” provisions.
Deregistration. A taxable person who has ceased to carry on taxable activities may apply to the GRA to have their registration canceled. The GRA may refuse to cancel the registration on the grounds that the person will, within a 12-month period, make supplies requiring them to be registered.
A registrant should be deregistered where the registrant ceases to carry on all taxable activities in Guyana.
Changes to VAT registration details. A taxable person is required to notify the tax authorities in writing within 15 days of the occurrence of the following:
• Any change in the name, address, place of business, constitution, or nature of the principal taxable activity or activities of the person
• Any change of address from which, or name in which, any taxable activity is carried on by the taxable person
• Any change in circumstances if the person ceases to operate or closes on a temporary basis
The term “taxable supplies” refers to supplies of goods and services that are liable to a rate of VAT, including the zero-rate.
The VAT rates are:
• Standard rate: 14%
• Zero-rate: 0%
The standard rate of VAT applies to all supplies of goods and services unless a specific measure provides for the zero-rate or an exemption.
Examples of goods and services taxable at 0%
• Exported goods and services
• Medical supplies
• Utilities – supplies of electricity and water for consumption
• Certain poultry and farming supplies (e.g., uncooked birds’ eggs; uncooked fresh, chilled or frozen chicken; hatching eggs; baby chicks and live chicks; a supply of poultry feed and ingredients of poultry feed; a supply of packaging material for use in the poultry industry; fertilizers; agrochemicals and pesticides)
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Financial services
• International transport services
• Gasoline
• Residential accommodation
• Certain basic food stuffs (e.g., raw brown sugar, baby formula, cooking oil (vegetable, corn and coconut oil) and fresh fruits (not including apples, grapes, dates, prunes, peaches, plums, strawberries and other assorted berries)
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Guyana.
The time when VAT becomes due is called the “time of supply” or “tax point.” In general, the tax point for goods and services supplied by a taxable person is the earliest of the following events:
• The date on which the goods are delivered or made available, or the performance of services is completed
• The date on which an invoice for the supply is issued by the supplier
• The date on which any consideration for the supply is received
A taxable person must account for VAT in the VAT period in which the tax point occurs, regardless of whether payment is received. A taxable person may recover input tax indicated on the tax invoices received.
Deposits and prepayments. For deposits and prepayments, the tax point occurs when payment is made or an invoice is issued, whichever is earlier. The rule does not vary for refundable or nonrefundable amounts or if the supply does not take place.
Continuous supplies of services. Goods supplied under a rental agreement, or services supplied under an agreement that provides for periodic payments, are treated as having been successively supplied for successive parts of the period of the agreement. As such, the tax point for each successive supply occurs when a payment becomes due or is received, whichever is earlier.
Where supplies of thermal or electrical energy, heat, gas, refrigeration, air conditioning or water are made or goods or services are supplied directly in the construction, major reconstruction, manufacture or extension of a building or engineering work and the consideration for such supplies are made by installment or periodically, the goods or services are treated as successively supplied for each period to which a payment of goods or services relates. As such the tax point for each successive supply occurs when payment in respect of the supply becomes due, or is received, or any invoice relating only to that payment is issued, whichever is the earliest.
Goods sent on approval for sale or return. Where goods are supplied to a person under an agreement whereby the recipient has an option to return the goods to the supplier, the tax point is the earliest of when the goods are delivered or made available to the recipient, the invoice is issued or the payment is received.
Reverse-charge services. There are no special time of supply rules in Guyana for supplies of reverse-charge services. As such, the general time of supply rules apply (as outlined above).
Leased assets. Where goods are supplied under an agreement for hire purchase or under a lease with an option to purchase, the tax point is the date of the commencement of the agreement.
Imported goods. VAT on the entry of imported goods becomes due and payable at the time when the goods are entered for the purposes of the Customs Act. The importer is liable to account for the tax and must pay it.
The VAT paid by a taxable person on goods and services that are acquired for the purpose of making taxable supplies is deductible as input tax. Input tax is offset against output tax, which is charged on making taxable supplies. Input tax credits may be carried forward and offset against any output tax payable in a subsequent tax period.
Invoices must meet the VAT invoicing requirements as set out in the law, to be valid for input tax recovery.
The time limit for a taxable person to reclaim input tax in Guyana is five years. This is from the date the taxable person has the right to apply for the refund.
Nondeductible input tax. Input tax may not be recovered on purchases of goods and services that are not used for taxable or business purposes.
Examples of items for which input tax is nondeductible
• Entertainment
• Fees for membership in recreational clubs
• Passenger vehicles
Foreign currency invoices. In certain circumstances, tax invoices may be issued in a foreign currency. However, in accounting for the tax payable, the taxable person must account for the tax in the domestic currency, which is the Guyana dollar (GYD). In converting the amounts, the exchange rate used must be the rate applying between the currency and the Guyana dollar at the time the amount is taken into account under the VAT Act.
Supplies to nontaxable persons. There are no special invoicing rules for supplies to nontaxable persons in Guyana. As such, full VAT invoices are required.
Records. In Guyana, examples of what records must be held for VAT purposes include original tax invoices, tax credit notes and customs documentation. Every taxable person is required to maintain in Guyana such books and records as are appropriate to enable the GRA to ascertain the liability of that taxable person to tax.
In Guyana, VAT books and records must be held within the country.
Record retention period. Books and records are to be kept for seven years after the end of the VAT period to which they relate.
Electronic archiving. Electronic archiving is not allowed in Guyana. Archiving must be made in paper form only.
Periodic returns. The VAT period in Guyana is the calendar month. The VAT return must be filed by the 21st day of the following month after the end of the tax period. This deadline applies whether or not tax is payable in respect of that period. The deadline also applies to import declarations, which must be aggregated and filed for the period and attached with the respective VAT return.
VAT returns are generally submitted in hard copy (via a drop box system) or electronically where the business is registered for the GRA’s online services. A “drop box system” is where the GRA maintains a physical box at its location to facilitate the filing of VAT returns. Otherwise, returns should be filed online.
Periodic payments. Any VAT due for the VAT period must be remitted by the same date as the return deadline, i.e., by the 21st day of the month after the end of the tax period.
The tax payable on imports of services by the purchasers of such services during the period must be aggregated and paid on or before the 21st of the following month.
Payment of the VAT to the GRA can be made by bank/wire transfer, check or cash.
Electronic filing. Electronic filing is allowed in Guyana, but not mandatory. VAT returns can be submitted electronically online (https://eservices.gra.gov.gy/Home) once the taxable person is registered for the GRA’s online services.
Payments on account. Payments on account are not required in Guyana.
Special schemes. No special schemes are available in Guyana.
Annual returns. Annual returns are not required in Guyana.
Supplementary filings. No supplementary filings are required in Guyana.
Correcting errors in previous returns. If a taxable person discovers an error or an omission from a previous VAT return, the taxable person is required to file an amended return. The amended
VAT return must be submitted manually (i.e., by paper) and not electronically. The reasons for the amendments may be requested by the GRA.
Digital tax administration. There are no transactional reporting requirements in Guyana.
Penalties for late registration. A taxable person who fails to apply for registration may be liable to a civil penalty equal to double the amount of output tax payable from the time the person is required to apply for registration until the person files an application for registration with the GRA.
A person who knowingly or recklessly fails to apply for VAT registration commits an offense and is liable on conviction to a criminal penalty not exceeding GYD25,000 and imprisonment for a term not exceeding two years. Note that the VAT Act provides that the civil penalties (as outlined above) should first be utilized before resort is had to provisions for criminal offenses.
Penalties for late payment and filings. A taxable person who fails to file a VAT return within the stipulated deadline is liable for a penalty which is the greater of GYD1,000 per day for each day or part thereof that the return remains outstanding or an amount equal to 10% of the tax payable for the period of such return, for each month or part thereof that the return remains outstanding.
The penalty shall not exceed the amount of tax payable in respect of the return and no penalty is payable where the person has been convicted of an offense of knowingly or recklessly failing to lodge a return and is liable on conviction to a fine not exceeding GYD15,000.
The penalty for late payment of tax payable on importation of goods or services is an amount equal to the greater of GYD1,000 per day or part thereof that the tax remains outstanding or an amount equal to 10% of the tax outstanding for each month or part thereof that the tax remains outstanding. The penalty must not exceed the amount of unpaid tax.
Note that interest is chargeable for failure to pay VAT by the due date at the rate of 2% simple interest for each month or part of a month that the payment due remains unpaid.
Penalties for errors. There are no specific penalties in Guyana for errors. However, where the taxable person decides to correct the error, an amended return can be prepared and submitted to the GRA.
Failure to notify, or late notification to the tax authorities of changes to a taxable person’s VAT registration details could result in a fine not exceeding GYD50,000 and imprisonment for a term not exceeding two years. Failure to notify for any other reason may give rise to a fine not exceeding GYD25,000. For further details, see the subsection Changes to VAT registration details above.
Penalties for fraud. A person who knowingly or recklessly makes a statement to a taxation officer that is false and misleading in a material particular or omits any matter from a statement that may be misleading to the tax officer, and the tax properly payable by the person exceeds the tax that would be payable if the person were assessed on the basis that the statement is true, the person is liable for a penalty equal to an amount determined by the Commissioner. Nevertheless, this penalty is not payable where the person is convicted of an offense for the same act or omission so as to have been liable to a fine of GYD15,000 and to imprisonment for a term not exceeding two years.
A person who knowingly and recklessly uses a VAT registration number of another person on a return, notices or other documents prescribed for the purpose of the VAT Act is guilty of an offense and is liable on conviction to a fine not exceeding GYD50,000 and imprisonment not exceeding two years.
A person who knowingly or recklessly makes a false claim for a refund is liable on conviction of the offense to a fine not exceeding GYD50,000 and imprisonment for a term not exceeding six months.
A person who obstructs a taxation officer in the performance of the taxation officer’s duties commits an offense and is liable on conviction to a fine not exceeding GYD15,000 and imprisonment for a term not exceeding two years.
Personal liability for company officers. Where an offense under the VAT Act is committed by a company, every person who at the time of the commission of the offense was a representative officer, director, general manager, secretary, or other similar officer of the company or was acting or purporting to act in such capacity is deemed to have committed the offense unless they prove that the offense was committed without their consent or connivance and that they exercised all such diligence to prevent the commission of the offense.
A person aiding and abetting the commission of an offense is also guilty of that offense and is liable to the same penalties as the person committing the offense.
Statute of limitations. The statute of limitations in Guyana is five years. However, an assessment can be made at any time by the GRA where the Commissioner General is not satisfied with a VAT return filed by a taxable person and has reasons to believe that such default was due to fraud, or gross or willful neglect committed by or on behalf of the person who furnished the return or import declaration. Any other assessment based on the GRA not being satisfied with a VAT return filed must be made within five years after the date the return or import declaration was furnished.
An assessment may be made at any time by the Commissioner General where:
• There has been a failure to lodge a return or import declaration
• The Commissioner has reason to believe that the person will become liable for the payment of an amount of tax but is unlikely to pay such amount
• A person makes supplies of goods and services without being a taxable person or the person charges VAT at the rate of 14% when not qualified to do so
• The Commissioner is satisfied that the taxable person entered an arrangement and has obtained a tax benefit in a manner that constitutes a misuse of the provisions of the VAT Act