Taxes and Incentives

Wed, 30 Mar 2016…       abdulnaisr hamid

Corporate Income tax

ACTIVITIES

TAX RATE

Agriculture

0%

Commercial and service activities, real estate, rental companies, banks, insurance and fund management companies

15%

Industry, manufacturing

10%

Cigarette and tobacco

30%

Exploration, extraction and distribution of oil & gas, and their subcontractors

35%

Social Development Tax*

3%

*Applies to all companies exempt from tax under the Investment Encouragement Act or any other Act

Other Taxes

CONCEPT

TAX RATE

VAT

17% standard rate and 30% for telecom services*

Interest & Other Services

7% on payment made to a non-resident company, including subcontractors

Royalties

15% made to a non-resident company

Technical Services

15%

Payments

15% made to a nonresident subcontractor for management consulting fees;
5% creditable withholding tax applies to payments from resident companies to entities registered in Sudan as a branch of a foreign company.

Import of Goods

2% creditable withholding tax if paid by a resident company

Rentals

10% for any sum above 3000 SDG

Social Security

Corporate contribution of 17% of monthly salary
Personal contribution of 8% for Sudanese and foreign expatriates

Property Tax

Depends on the locality

Zakat

2.5% applies on the working capital of a company owned by Muslim shareholders.

Transfer Tax

2% on transfer of company shares

Capital Gains

5% for gains on the sale of lands and buildings,
2.5% for gains on the sale of vehicles
2% on gains from the sale of securities, shares and bonds, subject to certain exceptions

Personal Income Tax

Varies progressively from 5% to 15%

Leasing Income

10%

*Certain exemptions prevail

Source: Deloitte International Tax, Sudan Highlight 2013.

See www.tax.gov.sd

Incentives

The National Investment Encouragement Act of 2013, investors may benefit from the following incentives:

  • The Sudan Investment Authority grants incentives to investors operating in specific sectors. These sectors are divided into three groups:
    • Infrastructure: including roads, ports, electricity, dams, communications, energy, transport, contracting business, education, health and tourist and information technology services and water projects;
    • Natural resource extraction and exploitation; and
    • Agriculture and industrial production.
  • Investors are exempt of VAT for all imported capital needed to start the business and may be free of import duties for all or part of the imported capital upon prior approval by the Sudan Investment Authority.
  • Investors may also benefit from access to land under preferential rates as long as their projects are considered strategic investment projects. These lands are approved for encouragement allotment after an agreement is made between the Authority and the States to designate such land.

Under the Free Zones and Markets Act 2009, free zones are established pursuant to a resolution of the Council of Ministers based on the recommendation of the National Council for Free Zones and Markets. Currently there are two free zones in Sudan. The first is located at Suakin on the Red Sea near Port Sudan and the second at Aljaily near Khartoum. Investors operating in these free zones receive the following benefits:

  • Exemption from tax on profits for 15 years, renewable for an extra period;
  • Salaries of expatriates are exempt from personal income tax; Products imported or exported abroad are exempt from all customs fees and taxes except service fees;
  • Real estate is exempt from all taxes and fees;
  • Invested capital and profits are transferable from Sudan to abroad through any bank licensed to operate in the free zones.

Source: Omer Ali Law Firm, Sudan Investment Profile 2013 and the Sudan Investment Authority

Provide link to a map pointing to the free zones or a link to information of the different free zones – this data should not be too detailed as it is important for SIA to leave some room for investors to contact them –

Labor

  • Minimum wage is 420 SDG per month (US$ 71)
  • Work weeks are Sunday to Thursday, 8 hours a day, 5 days a week
  • Foreign workers must have valid residency and work permits
  • Wages and allowances of non-Sudanese workers shall not be subject to Social Insurance.
  • Social Security contribution by the employer to employees´ monthly wages is 17%.

See www.hlr.gov.sd