Investment Incentives 2020

Summary of (tax) investment incentives
investment incentives

Partial exemption on import duties, sales tax and statistic rights on the import of capital assets

By order of the Minister of Finance on January 14, 2020 (La.F. no. 80), the Minister set conditions for partial exemption upon import of capital assets.
The Minister of Finance does not grant a refund of duties paid on import. This means that the minister will reject a request for a refund if the assets have already been imported.

After approval by the Minister of Finance partial exemption on import duty and sales tax of 75% is granted on the import of capital assets.

Partial exemption of statistic right is also granted under the Law on Statistic Rights up to an amount of SRD 100, -.

To qualify for the partial exemption, the capital asset must be used by a company in the following sectors: forestry, industry, agriculture, horticulture, mining, animal husbandry, poultry, aquaculture, fisheries, wholesale, professional transport, industry, services and tourism, with the exception of the establishment and operation of casinos. The asset must have a direct connection to the business activities, in accordance with the registered activities with the Chamber of Commerce and Industry.

The asset should be used in the context of the actual activities of a company. Assets are goods which can be depreciated.

The exemption is granted:

  1. if an asset has a value of at least US$ 7.500 (seven thousand five hundred US Dollar). Value refers to the cost of the asset, plus insurance and freight costs.
  2. in the case of assets that in connection with the investment form a whole (initial investment), the joint value of the amount must be at least US$ 250,000 (two hundred and fifty thousand US Dollar).
  3. in case the assets will be used in the agriculture sector, animal husbandry sector, poultry sector and in connection with the investment form a whole (initial investment), the joint value of the amount must be at least $ 250,000 (two hundred and fifty thousand US Dollar).
  4. if the entrepreneur has no outstanding balances of the other taxes;
  5. if the entrepreneur has filed a request addressed to the Minister of Finance. This application must be submitted at least 3 weeks before the import of the assets. In this application, the following documents must be enclosed:
    • a valid permit in case the company is required to hold a license;
    • a statement of registration of the Inspector of Direct Taxes;
    • a statement of no objection by the Tax Collector;
    • an extract from the trade register of the Chamber of Commerce and Industry;
    • the invoices or quotes of the supplier on which the value is stated;
    • a correct and fully completed investment form;
    • a business plan/ project plan in case of an initial investment as referred to in points b and c
    • an itemized list containing the goods to be imported, the number of goods to be imported, individual values, total value, company stamp and signature of the company representative, in case of an initial investment as referred to in points b and c

The following goods are excluded from the exemption:

  1. Passenger vehicles, except in the case of commercial transport
  2. Trucks with a capacity of less than 1,500 (fifteen hundred) kg
  3. Vessels, except in the case of commercial use
  4. Parts of assets
  5. Building Materials
  6. Plumbing fixtures, except in the case of hotels and restaurants
  7. Goods for furnishing and decoration of buildings and workplaces, except in the case of hotels and restaurants
  8. Clothing, footwear and other personal protective attributes
  9. Security equipment including firearms

Excluded from the initial investment are:

  1. Passenger vehicles, except in the case of commercial transport
  2. Trucks with a capacity of less than 1,500 (fifteen hundred) kg
  3. Vessels, except in the case of commercial use
  4. Clothing, footwear and other personal protective attributes
  5. Any component of an asset which has no minimum value of $ 500
  6. Building materials such as cement, paint, nails, bolts, nuts and similar goods
  7. Furnishing goods intended for offices.

The asset for which partial exemption from import duties is granted should not be disposed of within 3 (three) years after import. Disposal is defined as:

  1. transfer of ownership of goods pursuant to a contract
  2. withdrawing an asset from the company
  3. changing the destination of an asset
  4. failure to use an asset within 3 (three) years after the beginning of the year in which the investment in the respective asset has occurred.

On disposal of an asset within a period of 3 (three) years, previously exemptions that have been granted will be charged the full import duties.

Investment law 2001

Based on the Investment law 2001, entrepreneurs who have an up to date bookkeeping and invest in capital equipment, have the possibility to request investment incentives.

However, it concerns only investments in the following sectors: agriculture, animal husbandry, fisheries, horticulture, aquaculture, mining, forestry, tourism except for the establishment and operations of casinos, industry, trade, industry, transport and professional services.

With the introduction of the Investment law, the body Investsur was introduced, whose main task is to assess the applications and to advise the Minister of Finance. Investsur has been installed in 2018 but is not operational yet. To date all applications have been processed and provided by the Minister of Finance.

Tax incentives:

Random depreciation

In the calculation of the yearly profit for the levying of the income tax, the amount of investment in an asset may be depreciated randomly, if the amount of this investment in Surinamese dollar is at least the equivalent of US$ 5.000 (five thousand US dollar).

A request for application of this incentive shall be submitted not later than three months after the date of the concerned investment.

In the General provisions of the Investment law 2001 is included that investing means: “commitments in respect of purchasing or improving a business asset as well as making production costs before that, to the extent that these obligations and costs are pressing on the entrepreneur”.

The explanatory memorandum states that when entering into obligations it often involves sale or procurement contracts in respect of the purchase of assets.

To avoid inconvenience, we advise you to purchase a business asset or the consideration at the beginning of a project to submit the request, so the request takes place within the legal deadline.

Exemption from income tax (tax holiday)

The incentive applies for new companies. The maximum duration is 10 (ten) years. A request for application of this incentive shall be submitted not later than one year after the new company commenced.

Horizontal compensation of income tax

Profit and losses of a parent company and a subsidiary can be settled with each other if the following requirements are met:

  1. a request for relief is filed jointly by both companies;
  2. the periods during which the levying of income tax takes place, are equal for the two companies together;
  3. the profit of the subsidiary is achieved by a new company;
  4. in determining the profit for the two companies in a year, the same provisions of the Income Tax Act 1922 shall apply;
  5. each of the companies exerts a company in one of the sectors mentioned in the law.

A request for application of this incentive shall be submitted not later than one year after the new company has commenced.

The Non-tax incentives are:

  1. Permits transfers of funds. It concerns foreign exchange permits for the export of currencies for transfers of redemption and interest payments of foreign loans, profit transfer etc.
  2. Various permits. Business location, residence and employment permits and permits for the import and export of goods and services.

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