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Tax on other income is calculated when you complete an Annual Income Tax Form, which details your assessable income and any expenditure you can deduct against income.
Each tax subject that derives income from conducting business activities must lodge an annual income tax return.
The exception is if that income was covered by a final withholding tax, such as when the recipient required to withhold tax is an individual (including individual enterprises).
Individual employees do not lodge tax return forms, but individuals who operate a business are required to.
While the final amount of income tax payable is not calculated until after the end of the tax year, income tax installments are payable by business enterprises throughout the year.
The period covered by the annual return is from 1 January to 31 December.
Where the taxpayer is a resident natural person:
Annual taxable income | Tax on this income |
---|---|
$0 – $6,000 | 0% |
More than $6,000 | 10% |
A resident natural person is an individual who is:
Where the taxpayer is a non-resident natural person (i.e. individual business enterprises):
Annual taxable income | Tax on this income |
---|---|
All taxable income | 10% |
Where the taxpayer is a legal person (i.e. non-individual business enterprises):
Annual taxable income | Tax on this income |
---|---|
All taxable income | 10% |
A legal person means:
For the years between 1 January 2002 and 31 December 2007 the rates of tax were as follows:
Where the taxpayer is a natural person (i.e. individual business enterprises):
Annual taxable income | Tax on this income |
---|---|
$0 – $3,368 | 10% of each $1 |
$3,369 – $6,737 | $336.80 plus 15% of each $1 over $3,368 |
$6,738 and over | $842.15 plus 30% of each $1 over $6,737 |
Where the taxpayer is a legal person (i.e. non-individual business enterprises):
Annual taxable income | Tax on this income |
---|---|
All taxable income | 30% |
Determining gross income and deductions is based on net profit for financial accounting purposes, prepared in accordance with International Financial Reporting Standards, and subject to modifications in the Act.
This means taxpayers may claim additional deductions allowed by the Act including:
The Taxes and Duties Act 2008 (section 31) lists deductions which are not allowable. Any ‘not allowable’ deduction will need to be excluded from the calculation of profit and from determining the taxable income of an income taxpayer.
Complete an Annual Income Tax Form. See How to pay taxes and Due date for payments for further details.