Tax Residency Status Solomon Islands : Inland Revenue Division IRD

Organization : Inland Revenue Division
Type of Facility : Tax Residency Status
Country: Solomon Islands

Website : http://www.ird.gov.sb/Article.aspx?ID=654

Tax Residency Status:

The Income Tax Act clearly defines who is a resident for tax purposes.

Related : Income Tax Return & Payment Solomon Islands IRD Inland Revenue Division : www.statusin.org/8990.html

Individuals:
An individual is resident for tax purposes if they resident in, or intend to reside in Solomon Islands for longer than 6 months duration.

Once you are resident for tax in Solomon Islands you are required to pay tax on your world wide income in the Solomon Islands. This means that income earnt outside of Solomon Islands is taxable in Solomon Islands and must be included in any return of income filed

Non resident individuals who derive income from Solomon Islands are still required to may tax on that income in Solomon Islands

Non individuals:
A non-individual such as a company, trust or society is resident in Solomon Island if:
1. It is incorporated in Solomon Islands; or
2. Carries out a business in Solomon Islands and has central management and control in Solomon Islands

Non resident companies who derive income from Solomon Islands are still required to pay income on that income from Solomon Islands

Employing Casual Labour:
Casual labour is when someone is informally employed for a short period of time – usually doing low skill or low paid work. Usually the length of time the person is employed is 1 or 2 pay periods for any given job. Industries where casual labour is commonly used include (but are not limited t) construction and stevedoring. It would be expected that the employees annual salary would be less than the personl tax exemption of $15080.

In such situations the employer will not normally be required to deduct tax.

If the employer repeatedly employs the same person for casual work then PAYE should be deducted.

A person may be employed on a casual basis but receive a larger amount of income. This may be in the case where the work is technical or professional in nature. In these cases if the level of income received is higher than ther personal exemption than tax should be deducted.

If an employer is not sure of what to do in their specific circumstance then they should contact IRD

Tax Rates :
** Resident Company – 30c
** Non-resident company – 35c
** Individuals First – $15080 tax free

Tax Audits or Enquiries :
** Inland Revenue has a responsibility to Government and the community to try to ensure that everyone pays the correct amount of tax under the law. This means that from time to time we may need to check the accuracy of information you have given to us.

What is an Audit or Enquiry?
** An audit or enquiry involves an examination of your tax affairs to make sure that the information is you have given to Inland Revenue is accurate. An audit or enquiry can take many forms. Sometimes we may need to make an enquiry about a single transaction – other times we may need to audit all your books and records.

** An audit or enquiry may involve a phone call or letter asking you to provide further information or verify particular information that you have supplied in your tax return or other tax documents. In other cases it may involve someone visiting you and examining all of your tax documentation for particular years of income or in relation to a particular tax.

For example, we may ask to inspect your PAYE records for a particular period or we ask to inspect all your records for all taxes (eg income tax, PAYE, Sales Tax etc).

** The enquiry or audit process – what you can expect from Inland Revenue officers

At the commencement of an enquiry or audit officers will :
** Provide notification of the intention to make enquiries or conduct an audit.
** (Sometimes we may also carry out unannounced inspections.)
** provide official Inland Revenue identification when first meeting you
** Explain the expected nature, scope and duration for the enquiry or audit and indicate the information and records that will be required

** Tell you about your rights and obligations in relation to the enquiry or audit
** Give you the opportunity to volunteer information about possible irregularity or omission in relation to your tax affairs. If you do this, the penalties that may otherwise have been imposed may be reduced
** Allow you to choose someone else to act on your behalf. There are some situations however where you personally must provide information or answers.

During an enquiry or audit, officers will :
** Explain the purpose of any interview or visit
** Seek to arrange convenient times and places for any interviews or meetings
** Ask clear questions
** Allow you to take notes of any conversations or interviews

** Give you reasonable time to collect records, documents and papers for examination
** Answer any reasonable and relevant questions you ask in relation to the enquiry or audit
** Provide a written receipt for any records that we collect in person at an interview and return the records as soon as possible

** Make enquiries of third parties with discretion and without any implication of wrong doing by you
** Allow you to give your views on any relevant issues, including any proposed adjustments
** Keep you informed of the progress of the enquiry or audit.

Contact Us:
Solomon Islands Inland Revenue Division
PO Box G9 Honiara
Call : 21493