Tax Regime

Tax Regime

1. Tax and Exemptions

2. Income Tax

3. Customs Duty

4. Goods Tax

5. Sales Tax

6. Stamp Duty

 

Tax and Exemptions

Tax (both direct and indirect) in Solomon Islands is high in real terms compared with some other more developed countries.

Exemptions are theoretically possible depending on the nature and amount of any new investment and the perceived national benefit. Virtually all applications are referred to an exemptions committee comprised of officials from the various revenue authorities.

Tax exemptions (income tax, import duty, goods tax) should be applied for before commencing business as it is virtually impossible to obtain exemptions at a later date.

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Income Tax

In Solomon Islands company tax is levied at the rate of 30 cents in the dollar.

An income tax rate for resident individuals reaches 40 cents in the dollar at SB$60,001.00 (US$7,500).

A taxpayer may be granted certain investment incentives by the Minister of Finance who may declare the whole or part of a taxpayer’s income to be exempt from tax for a particular period.

Withholding tax applies to dividends or other income earned in Solomon Islands at rates from 5 per cent to 15 per cent. Dividend withholding tax rates are 20 per cent for residents and 30 per cent for non-residents. Non-resident withholding tax also applies to payments made to persons or companies who are non-residents of Solomon Islands.

The Income Tax Act contains anti-avoidance provisions and this is supported by money laundering legislation.

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Customs Duty

Customs duty is imposed in Solomon Islands on the entry for import of a range of goods pursuant to the Customs and Excise Act (Cap. 121).

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Goods Tax

Goods tax of 15 per cent is payable on the cif (cost, insurance & freight) value of goods imported into Solomon Islands for private use or consumption, and 10 per cent on the wholesale value of goods manufactured in Solomon Islands.

Manufacturers and wholesale merchants must charge and remit tax on the sales value of the goods unless a goods tax number is quoted.

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Sales Tax

Generally, a sales tax of 10 per cent applies for most goods or services.

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Stamp Duty

Stamp duty is taxed on certain documents created within or brought into Solomon Islands and assessed on the documents and at the rates prescribed in the Schedule to the Stamp Duties Act (Cap. 126). In some cases it is relatively high.

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