ALL YOUR GO-FOR-GOLD PERMANENT RESIDENCY & CITIZENSHIP QUESTIONS ANSWERED

Section 99 of the Goods and Services Tax Act, 2009 of Sierra Leone.

“The Commissioner- General shall issue to a resident person and a non-resident person with no permanent establishment in Sierra Leone but whose income source is from Sierra Leone, a unique Taxpayer Identification Number (TIN), which number may be the same used to identify the person for the purposes of income tax, customs duty, Goods and Services Tax or non-tax revenue or any other transaction with the National Revenue Authority”.

To support the position that Sierra Leonean citizens or residents are taxed only on income sourced within Sierra Leone, the following sections of the Income Tax Act, 2000 are pertinent:

Section 89: Source of Income

Subsection (1):

“Income has a source in Sierra Leone if it is—

(a) derived from activities conducted, goods situated, rights used, or services rendered in Sierra Leone;

(b) derived from any employment exercised or services rendered in Sierra Leone, regardless of the place of payment;

(c) derived from the carrying on of a business in Sierra Leone; or

(d) a dividend, interest, royalty, rent, natural resource payment, or management or technical service fee paid by a resident of Sierra Leone.”

This section establishes that income is considered to have a Sierra Leonean source if it meets the criteria outlined above.

Section 91: Foreign Employment Income of Residents

“Foreign-source employment income derived by a resident individual during a year of assessment from employment in a foreign country shall be exempt from income tax if the income is chargeable to tax in the foreign country.”

This provision indicates that foreign employment income earned by a resident is exempt from Sierra Leonean tax if it is taxed in the country where it is earned.

Section 90: Allowable Foreign Tax Credit

Subsection (1):

“A resident taxpayer is entitled to an allowable tax credit in respect of foreign income tax borne by the taxpayer on assessable income derived from a foreign source.”

This section allows residents to claim a tax credit for foreign taxes paid on income earned abroad, mitigating double taxation.

In the Income Tax Act, 2000 of Sierra Leone, the term “resident individual” is defined in Section 10.

According to this section, an individual is considered a resident for tax purposes if they meet either of the following criteria:

1. Physical Presence: The individual is present in Sierra Leone for a period or periods amounting to 183 days or more in any 12-month period commencing or ending during the year of assessment.
2. Ordinary Residence: The individual resides in Sierra Leone and is not present in any other country for a period or periods amounting to more than 183 days in that year of assessment.

These criteria establish the basis for determining an individual’s residency status for taxation purposes in Sierra Leone.

Moreover …

• Sierra Leone has a self-reporting taxation system.
• Incorporated entities are mandated to undertake an annual audit but it is infrequently policed.
• Funds sent to Sierra Leonean entities can be treated as capital inflows and can readily be outflowed as the banking system is open and does not impede or question why an entity might be repatriating and expatriating funds.

Consequently, on the basis that our clients elect to report tax due annually,  the National Revenue Authority will issue a Tax Residency Certificate.

Details on domestic taxation can be found here.