Suriname VAT as of January 2023

After approval by the Suriname Parliament, the Value Added Tax Act 2022 (VAT Act) was officially published on Wednesday 19 October. On January 1, 2023 the VAT Act will come into effect. It is important for companies to set everything in place before the VAT Act comes into effect.

Currently, the so-called turnover tax is levied at various stages of, say, a production process, without considering the tax already paid in a previous stage, which can lead to an accumulation of turnover tax. This accumulation of turnover tax then naturally makes the price of goods and services more expensive. The introduction of VAT, among other things, will prevent this accumulation of tax. Under the new VAT-system to be introduced, VAT due on business expenses may be offset against VAT due on sales. VAT will not be levied directly from the consumer/end user, but indirectly from business owners (through the tax return).

The operation of charging VAT can be depicted with the following steps:

1. The taxable entrepreneurs owe to the tax authorities the VAT charged by them on their value added on the supply of goods and services to their customers;

2. Then, this taxable entrepreneur deducts the VAT paid for purchases for his business from the VAT charged to customers. For example, the VAT on purchases for office supplies, business equipment or production materials (deduction input tax);

3. The balance amount (difference between the two amounts) must be paid or reclaimed to the tax authorities on a tax return.Due to the system of deduction of input tax, the entrepreneur does not incur VAT and is only liable for VAT on the added value. Hence the designation of value added tax.

Since VAT is a new system of taxation in Suriname, you will probably be left with many diverse questions such as:

1. Who is subject to VAT?

2. Which supplies of goods and deliveries of services are subject to VAT?

3. What VAT rate should we charge on the supply of our goods or services?

4. Are the supplies of our goods or delivery of services subject to VAT at all?

5. When do we have to pay VAT?

6. How do we have to pay VAT?

7. When can we recover VAT or how can we recover VAT?

8. But also, what administrative obligations must we comply with?

These are all relevant questions that we can answer tailored to your business activities. For questions, please feel free to contact us at telephone number +597 422877 or via email at info@rellumandpartners.com.