Content Group 5 of Timor-Leste

Country Content

Value Added Tax: 2.5%
Corporate Income Tax: 10%
Sources: National sources, Fitch Solutions

Important Updates to Taxation Information

A Social Security scheme was introduced in November 2016, with both employers and employees required to make contributions. The scheme provides cover for loss of income/benefits due to work-related accidents, maternity, old age and death. It would appear that Social Security contributions should be deductible to employers. Implementing regulations for this scheme are still outstanding.

There are no local taxes on income in Timor-Leste. Other significant regulations issued include the Private Investment Law, which came into effect in January 1, 2018.

Business Taxes

Type of Tax	Tax Rate and Base
Corporate Income Tax (CIT) standard rate	10%
The rate of CIT for oil and gas contractors	30%
The rate of CIT for oil and gas subcontractors	6%
Non-residents without a permanent establishment	10% Withholding Tax
Sales Tax (standard)	2.5%
Services Tax	5% on any gross consideration of more than USD500 received by a taxpayer for the provision of hotel, restaurant and bar, or telecommunication services

Note: Supplemental Petroleum Tax (SPT) also applies for oil and gas contractors and is imposed on 'accumulated net receipts' using a specific formula. SPT is deductible for CIT calculation purposes. Overall, separate tax arrangements apply for petroleum activities in the Joint Petroleum Development Area.

Sources: Timor‑Leste Revenue Services, Fitch Solutions
Date last reviewed: March 15, 2020

Country Title

Taxation – 2020