Liberia, Republic of

The tax regulator in Liberia is the Liberia Revenue Authority (LRA).

Taxable period

The tax period for the purpose of the Liberia tax administration is a tax year. If not provided, it is the calendar year.

The administration may give permission for a business to use any other 12-months period other than a tax year upon presenting a convincing written application to the authority.

Tax returns

Companies that have taxable income for a tax period are required to file an income tax return for the period. The deadline for filing is the last day of the third month after the end of the tax year.

Quarterly filings are required to be done no later than 15 days after the quarter has ended.

Payment of tax

Corporate taxes are due by the last day of the third month following the end of the taxpayers’ tax year.

Income tax withheld on the payee’s behalf is also creditable against the payee’s tax liability.

Advance tax payment

Every legal person that is obligated by law to file an income tax return for a tax period is required to pay 2% of gross income as advance tax. Advance tax is due quarterly on the 15th day of the preceding month after the end of the quarter. It is creditable against total income tax liability for the period and functions as a minimum annual tax payment.

Tax audit process

The revenue code gives the LRA the authority to collect taxes, audit, maintain records of taxpayer information, monitor and enforce taxpayer compliance with the Code (and other related laws under which it is assigned responsibility), facilitate legitimate trade, and to establish offices for the payment of tax and the filing of tax returns.

The LRA presents a notice of its intention to audit a taxpayer and requests the taxpayer to present all necessary supporting documents before the audit can commence. More documents could be requested during the audit. After the audit is performed and initial issues discussed and resolved, the LRA presents its final report to the taxpayer and the taxpayer can agree to the findings or appeal through the legal team and subsequently the Board of Tax Appeals.

Statute of limitations

The deadline for raising tax assessments in Liberia is seven years.

Topics of focus for tax authorities

Some key topics that the tax authorities focus on are listed below:

• WHT on payments to residents and non-residents.
• WHT on salaries.
• CIT.
• Transfer pricing.

Anti-avoidance rules

Liberia has a general anti-avoidance rule that allows the Commissioner-General to recharacterise or disregard arrangements where it is perceived that they are carried out as part of a tax avoidance scheme, do not have substantial economic effect, or do not reflect their substance.