All revenue expenses wholly and exclusively incurred in the production of income are generally deductible.
Tax depreciation rates (wear and tear allowances) apply to the following classes of assets, as follows:
|Class of assets||Depreciation rate (%)|
|Buildings (housing and machinery)||5|
|Buildings used to provide services and warehousing||2|
|Furniture and fittings||10|
|Electronic office equipment, including computers and computer software||50|
|Other office equipment||15|
|Plant and machinery||20|
|Equipment for industries harnessing alternate energy through wind, solar, and biomass technologies||Capital expenses to be written off within two years for new equipment|
|Beddings, books, bottles, boxes, carpets, clerical robes, cooking, utensils, crockery, cutlery, glass-wear, lasts, linen, linoleums, oars, rugs, sails stoppers, siphons, tarpaulins, loose tools and similar items.||To be written off in the year of purchase|
Buildings that house machinery are depreciated using the straight-line method. Other assets may be depreciated using the declining-balance or straight-line methods.
Goodwill expense is generally not allowable in arriving at chargeable income.
No specific rules exist in respect of start-up expenses, but such expenses are generally not deductible.
Interest expense incurred in the production of income is deductible. There is no restriction to the deductibility of this expense.
A bad debt is deductible where it has been incurred in the trade in which the company is engaged and has been respectively estimated to the satisfaction of the tax authority to have become bad in the year of income when the claim is made.
Charitable donations are not deductible unless they are made under a deed of covenant.
Fines and penalties
Fines and penalties are not generally deductible.
Taxes are not generally deductible in arriving at taxable profit.
Net operating losses
Companies may carry forward losses for an unlimited number of years, but the losses may not reduce the taxable income in any year by more than 50%. Loss carrybacks are not permitted.
Payments to foreign affiliates
A corporation engaged in business in Guyana may claim a deduction for royalties and interest charges paid to foreign affiliates, provided the appropriate WHT is deducted and properly accounted for. Deductions for administrative, technical, professional, or other management services fees paid to a non-resident company or branch, referred to as 'head office expenses', are restricted to 1% of the annual turnover.