Tax Figures
Corporate Income Tax
The current corporate income tax rate is 25%.
The Liberian tax year is the calendar year, unless specified otherwise. Companies must file a corporate income tax return within 3 months after the end of the fiscal year.
Income Tax Rate
- 0 – LIB 70,000: 0%
- LIB 70,001 – 200,000: 5%
- LIB 200,001 – 800,000: LIB 6500 + 15%
- Above LIB 800,001: LIB 96,500 + 25%
Non-residents are taxed at 15%
Payroll Tax
No
Sales Tax
GST is imposed on the supply of taxable goods and services in Liberia. Taxable persons charge GST on their taxable supplies (output tax) and are charged with GST on goods which they receive (input tax).
The current standard rate of GST imposed on taxable goods and services is 7%.
Any person who carries on any business of manufacture or business of providing taxable services exceeding an annual threshold of LDR 5m has an obligation to register for GST.
Withholding Tax
Libera imposes withholding taxes (WHT) on payments made to both resident (R) and non-resident (NR) companies on certain classes of income earned:
- Dividends: 15%
- Royalties: 15%
- Interest: 15%
- Natural resource payments: 15%
- Rental income: 10% (R) 15% (NR)
- Management and consultancy fees: 0% (R) 15% (NR)
- Contract services: 10% (R) 15% (NR)
A reduced rate may be available under an applicable Double Tax Treaty.
Other Tax
Property tax is imposed on every owner of real property, except exempt real property. The tax is imposed on both improved and unimproved land. The rates imposed vary depending on the description and location of the real property.
Time to prepare and Pay Taxes
139.5 hours
Employers Social Security and statutory contributions
Employers are required to pay 3% of an employee’s monthly gross remuneration towards social insurance and 1.75% towards workmen compensation.
Employees Social Security and statutory contributions
Employees are required to pay 1.75% of an employee’s monthly gross remuneration towards social insurance.
Payroll
Foreign companies operating in Liberia may find it challenging to deal with the complexities of the country’s tax system. The primary concerns for a foreign company that needs to comply with tax laws in Liberia are: Individual income tax (IIT) for employees in Liberia, social security costs, GST, withholding tax, business tax and permanent establishment concerns.
Remote Payroll
A remote payroll in Liberia is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Liberia. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Liberia is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.
Local Payroll Administration
In some cases, a company will register their business in Liberia under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Liberia may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Liberian payroll and can fulfil all tax, withholding tax and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Liberian employment laws.
Currency
The current corporate income tax rate is 25%.Liberian dollar, LRD
