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Fisheries - Tax and Incentives
The following businesses are eligible for incentives:
- Fishermen
- Fish processors
- Fisheries exporters
The following should be noted:
- Businesses shall be entitled to business tax concessions specified in Business Tax Act as amended by S.I 108, 2021
- The employer shall remit income tax to SRC on behalf of the employee.
SPECIAL RATE OF TAX
| Business Tax: Fisheries | |
|
Individual Fishermen |
Exempt up to 2023 After 2023 move on to the Presumptive tax structure (No exceptions for boat owners) |
|
Fisheries Exporter |
Less than SCR 1 million:15% |
|
Fisheries Processor |
Less than SCR 1 million:15% |
EXEMPTIONS AND CONCESSIONS FOR FISHERIES
1) Import Tax Exemption and Reduction
- There shall be a concession of 12.5% on the Excise Tax (S.I 54 of 2018 – Item 3(1) of the Excise Tax (Concessions) Regulations, 2018) payable on importation of commercial motor vehicles by persons registered as a fishermen with the Ministry responsible for Fisheries.
- Value Added Tax (VAT) refunds on locally purchased goods (excluding all motor vehicles except specialized motor vehicles) for registered fishermen and supporting activities. Receipts should be no less than SCR1,000 and should be endorsed by SFA.
Value Added Tax (VAT) exemptions on specific imported products for registered fishing businesses.
Note that while supplies are exempted, registration for VAT is necessary in the instance of multiple business activities. E.g. VAT is exempted on specific imported products for fisheries businesses, but applied on activities within a retail outlet and other products being sold therein. - Customs duty is exempted on goods imported as capital equipment, bait, protective and safety equipment to be used by persons engaged in fisheries recognized by the Ministry responsible for Fisheries as endorsed by the Ministry responsible for Finance, as per the S.I. 118 of 2014.
Rebate of 5% of the applicable rate of the Customs Duty on importation of inputs and minor operating equipment by persons recognised by the Ministry responsible for Fisheries.
Fuel
|
Type of Entity and Purpose of Reduction |
Reduced Rate |
|
Boat owners (Fuel for the exclusive purpose of fueling vessels undertaking commercial fishing activities) |
100% of the applicable rate |
|
SFA (Fuel bought for resale for the exclusive purpose of fueling vessels undertaking commercial fishing activities, excluding shark fishing) |
100% of the applicable rate |
2) Special Deductions on Taxable Income (Marketing and Promotion)
A further deduction, in addition to all other allowable deductions, of the expenditure incurred for marketing and promotion to the extent of 5% of the taxable income or the actual expenditure incurred, whichever is lower. This is applicable to registered boat owners, fishery processors and exporters.
|
Example 1: A business with taxable income of SCR 30 million, claims SCR 1 million for marketing / promotion (actual expenditure). SCR 30 million (taxable income) x 5% = SCR 1.5 million That taxpayer will be allowed a further deduction of SCR 1 million as it is the lower amount between the actual expenditure incurred (SCR 1 million) and the 5% of taxable income (SCR 1.5 million) Example 2: A business with taxable income of SCR 30 million, claims SCR 2 million for marketing / promotion (actual expenditure). SCR 30 million (taxable income) x 5% = SCR 1.5 million That taxpayer will be allowed a further deduction of SCR 1.5 million as it is the lower amount between the actual expenditure incurred (SCR 2 million) and the 5% of taxable income (SCR 1.5 million). **For clarity purposes, in applying the 5% to the taxable business income of the specified person, the interpretation to be given to taxable business income shall be restricted to only the taxable income attributable to the business carried on and giving rise to the special deduction. A specified person who also carries on other business cannot consider the total taxable business income of all businesses aggregated for the purpose of applying the 5% special deduction (SRC Public Ruling 2016-2). |
4) Accelerated Depreciation
Rates of depreciation allowable on capital investments for registered boat owners, fishery processors and exporters, other than buildings, are at the following rates: