Income Tax on (Capital) Gains and Losses
Income tax on Gains and Losses (Capital Gain Tax) effective from 1st April 2018 under the Inland Revenue Act No. 24 of 2017. Gains or Losses may arise on realization of Investment or Business assets or liabilities.
Capital asset is interpreted in the Inland Revenue Act no. 24 of 2017 as follows,
(i) Land or buildings;
(ii) Amembership interest in a company, partnership or trust;
(iii) A security or other financial asset;
(iv) An option, right or other interest in an asset referred to in the foregoing paragraphs; but excludes trading stock or a depreciable asset.
Further Investment and Investment assets defined as follows, “investment” means –
(a) The owning of one or more assets, including one or more assets of a similar nature or that are used in an integrated fashion, and
(i) includes a past, present or prospective investment; but
(ii) excludes a business or employment; or (b) a game of chance, including lotteries, betting or gambling
“investment asset” –
(a) means a capital asset held as part of an investment, but
(b) excludes the principal place of residence of an individual, provided it has been owned by the individual continuously for the three years before disposal and lived in for at least two of those three years (calculated on a daily basis);
“land or buildings” includes a structural improvement to land or buildings, an interest in land or buildings or an interest in a structural improvement to land or buildings, and includes the following:—
(a) a lease of land or buildings;
(b) a lease of a structural improvement to land or buildings; or
(c) an exploration, prospecting, development, or similar right relating to land or buildings; and
(d) information relating to a right referred to in paragraph (c);
Capital gain is calculated as the difference between the consideration received and the cost of the asset at the time of realization.
Tax rate on capital gain is 10% and Tax Return on Capital Gain shall be furnished to the Department of Inland Revenue within one month from the realization of an investment asset and payment to be made within one month from the realization of investment asset.
Please contact us on Consultations, Calculations, Payments and Furnishing of Capital Gain Returns on 0773 248 542 or email firstname.lastname@example.org
Withholding Tax (WHT)
Withholding taxes are applicable with effect from 1st April 2018 under the Chapter V111 of Inland Revenue Act No. 24 of 2017. WHT taxes are applicable on followings
(1) Withholding by employers on Employment Income
(2) Withholding from investment returns – Interest or Discount, Dividend, Charge, Natural Resource Payment, Royalty, Premium or Retirement Payment or pays amounts as winnings from a Lottery, Reward, Betting or Gambling
(3) Withholding from service fees and contract payments – for teaching, lecturing, examining, invigilating or supervising an examination; as a commission or brokerage to a resident insurance, sales or canvassing agent; as an endorsement fee; in relation to the supply of any article on a contract basis through tender or quotation; for such other matters as may be prescribed by regulation.
Rates of Withholding taxes are 5%, 8% and 14%.
Please contact us on Consultations, Payments and Furnishing of WHT Returns on 0773 248 542 or email email@example.com