NBR ITP cheat sheet

Residence test for individuals: presence in the country for 183 days or more in the income year, or 120 days or more in the current year plus 365 days over the preceding four years, makes a person resident.

Resident individuals are taxed on worldwide income; non-residents are taxed only on income sourced in the country, with employment income for services performed locally generally treated as local-source.

Employment income is taxed on a cash basis: salary, wages, allowances, bonuses, commissions, and the value of benefits in kind are included in the year received.

Deductible business expenses must be wholly and exclusively incurred in producing income, must be actual (not provisions), and capital expenditure is excluded unless a specific allowance applies.

Capital allowances replace depreciation: the asset cost is written off at prescribed rates on a straight-line or declining-balance basis, with pooling for low-value assets.

Trading losses may be carried forward to offset future profits of the same business; carry-back is limited and subject to specific statutory conditions.

Taxable income equals assessable income plus balancing charges minus allowable deductions and capital allowances; the tax payable then applies the progressive or flat rate schedule to that figure.

Payments to non-residents that are local-source, such as interest, royalties, management fees, and dividends where applicable, attract withholding tax at the prescribed rate.

VAT is an indirect, multi-stage tax on the supply of goods and services and on imports; registered persons charge output tax and recover input tax on business purchases.

Registration is compulsory once taxable supplies exceed the prescribed threshold; voluntary registration is available below the threshold on application to the revenue authority.

Taxable value of a supply is the consideration paid, including incidental costs and any taxes other than VAT; discounts actually granted are excluded.

Zero-rated supplies, such as exports and specified basic items, are taxable at 0% and still allow full input tax recovery.

Exempt supplies, such as certain financial and medical services, carry no output tax and block input tax on related purchases; input tax must be apportioned between taxable and exempt use.

Output tax minus allowable input tax equals VAT payable; excess input tax may be carried forward as a credit or refunded where the law permits.

The tax point (time of supply) is the earlier of the invoice date, the payment date, or the date goods are delivered or services performed, subject to statutory rules.

Imported goods are subject to VAT on the customs value plus customs duty and any excise, collected at the point of entry alongside duty.

Customs duty is levied on goods imported or exported at the rates in the customs tariff, classified according to the Harmonized System commodity code of the goods.

Customs value for ad valorem duty is generally the transaction value: the price actually paid or payable, adjusted for freight, insurance, commissions, and assists.

Dutiable value plus applicable duty forms the base on which import VAT and excise are computed for imports.

Preferential rates apply where a valid certificate of origin under a trade agreement is presented; otherwise the general or standard rate applies.

Duty relief and suspension schemes exist for temporary importation, re-export, transit, bonded warehouses, and specified investment or industrial incentives.

Drawback allows repayment of duty on imported goods that are subsequently exported, subject to documentary proof and time limits.

Post-clearance audits and valuation disputes are resolved through the customs dispute-resolution process, with an appeal route to a tribunal or court.

Smuggling, under-declaration, and misclassification attract penalties calculated as a multiple of the duty evaded, plus possible seizure and forfeiture of the goods.

Excise duty is a single-stage tax imposed on specified goods, commonly alcohol, tobacco, petroleum products, and sometimes luxury or non-essential items.

Excise may be specific (a fixed amount per unit or per litre), ad valorem (a percentage of value), or a hybrid combining both methods.

For imports, excise is computed on the customs value plus customs duty; for local manufacture, it is computed on the ex-factory selling price or statutory value.

Excise is generally collected at the point of manufacture or import and is a cost embedded in the price before VAT is applied.

Licensed manufacturers must register, keep production records, and account for duty on goods removed from the factory; excise stamps or banderoles secure high-risk goods.

Exemptions and remissions are limited to specified users or uses, such as diplomatic missions, approved industrial inputs, or export-bound production.

Excise is normally not recoverable as input tax; it is a final cost unless a specific refund or bonded-export scheme applies.

A surcharge is an additional levy imposed on top of a primary tax, typically calculated as a percentage of the tax payable rather than of the underlying value.

Common surcharge bases include income tax payable, import duty payable, or a specific excise amount, often earmarked for a designated fund or purpose.

Surcharges are usually charged at a flat rate applied to the assessed primary tax, so the effective combined rate rises proportionally.

Late-payment interest and penalties are distinct from surcharges: interest accrues over time, while a surcharge is a fixed statutory add-on.

Surcharge revenue is frequently hypothecated to specific programmes such as infrastructure, education, or health, and is accounted for separately.

Relief from surcharge may be granted under the same exemption provisions as the primary tax, but only where the statute expressly extends it.

Where a surcharge applies to imports, it is computed after customs duty and excise but before VAT, forming part of the VAT base.

Assessable income includes business profits, employment income, rents, interest, dividends, and other gains of an income nature; capital gains fall outside unless separately taxed.

Allowable deductions are limited to outgoings and expenses wholly and exclusively incurred in the production of income, plus specific statutory deductions such as bad debts and repairs.

Capital allowances are claimed on qualifying assets at prescribed rates; a balancing charge arises when an asset is disposed of for more than its tax written-down value.

Personal reliefs and allowances reduce taxable income for individuals before applying the rate schedule; they are not available to companies.

Companies pay tax at the corporate rate on taxable profits; individuals pay under a progressive scale with a tax-free threshold.

Withholding tax obligations arise on payments to non-residents and on specified domestic payments such as rent, dividends, and professional fees.

Instalment or advance payment regimes require taxpayers to pay tax quarterly or in advance, with the balance settled on assessment.

Input tax is claimable only on purchases used for making taxable supplies and only where a valid tax invoice naming the registered supplier is held.

Blocked input tax includes purchases for non-business purposes, entertainment, and passenger vehicles, except where specific exceptions apply.

Partial exemption apportions input tax using a recovery ratio based on taxable turnover divided by total turnover, with a standard rounding rule.

Credit notes reduce output tax when goods are returned or prices are reduced; debit notes increase output tax on additional charges.

Place of supply rules determine whether a supply is domestic or cross-border; exports are generally zero-rated, imports are taxed at entry.

VAT returns are filed periodically, normally monthly or bi-monthly, and payment is due by the statutory deadline to avoid penalties and interest.

Record-keeping requirements oblige registered persons to retain invoices, credit notes, and customs documents for the statutory retention period.

Importers must lodge a customs declaration supported by invoice, packing list, transport document, and certificate of origin where preferential treatment is claimed.

Goods are released after duty and taxes are paid or secured by bond; green-channel clearance applies to low-risk consignments.

Valuation methods apply in sequence: transaction value, identical goods, similar goods, deductive value, computed value, then fallback.

Transit and transhipment regimes allow goods to move under bond without duty, provided the movement is completed within the prescribed period.

Tariff classification disputes are resolved by reference to the General Interpretative Rules, section and chapter notes, and binding rulings.

Exporters may claim zero-rating or duty drawback on goods processed or re-exported under approved schemes.

Manufacturers of excisable goods must obtain a licence and provide security or bond before commencing production.

Excise returns are filed periodically with payment; stock records and production logs must reconcile with declared removals.

Excise stamps or tax marks are affixed to specified goods to evidence duty payment, and possession of unstamped goods is an offence.

Excisable goods held in bonded warehouses are duty-suspended until released for home consumption.

Refunds of excise arise on export of locally manufactured excisable goods or on duty-paid stock destroyed under supervision.

Penalties apply for unlicensed production, undeclared removals, and stamp irregularities, and may include seizure of goods and revocation of licence.

A surcharge is computed by multiplying the primary tax amount by the statutory surcharge rate, then adding the result to the tax due.

Surcharge is generally not deductible for income tax purposes unless the statute expressly allows it as an expense.

Where a tax is reduced on appeal, the related surcharge is recalculated on the revised primary tax figure.

Surcharge on imports is collected at the same time as customs duty and excise, using the same declaration and payment channel.

Surcharge rates may be varied by annual finance legislation, so the rate in force at the tax point governs the calculation.

Exemption certificates that cover the primary tax do not automatically cover the surcharge unless the certificate names it.

Taxpayers must register for a taxpayer identification number and file annual returns by the statutory deadline, even where no tax is payable.

Self-assessment requires the taxpayer to compute liability and pay the balance; the revenue authority may then audit and issue an adjusted assessment.

Objections to an assessment must be lodged in writing within the statutory period, typically 30 days, before appealing to the tribunal.

Penalties for late filing and late payment are prescribed as fixed amounts or percentages, with interest accruing on unpaid tax.

Record retention for income tax is generally five years from the end of the tax year to which the records relate.

Transfer pricing rules require related-party transactions to be at arm's length, supported by contemporaneous documentation.

A tax invoice must show the supplier's name, address, and VAT number, the buyer's details, the date, a description of goods or services, and the VAT amount separately.

Registration takes effect from the date the threshold is exceeded or from an agreed date for voluntary registration; the certificate must be displayed.

Deregistration requires a final return and payment of output tax on stock and assets on hand at deregistration.

Agents and branches may be treated as separate registrable persons depending on the grouping rules in force.

Electronic invoicing and online filing are increasingly mandatory for registered persons above specified turnover levels.

Assists, royalties, and proceeds of resale are added to the price paid or payable when they relate to the imported goods and are not already included.

Transport, insurance, and loading costs up to the place of importation are added to the customs value where the law adopts a CIF basis.

Under-declaration penalties are commonly a multiple of the duty short-paid, with a lesser rate for voluntary disclosure before audit.

Seizure and forfeiture apply to prohibited and restricted goods, and to goods concealed or falsely declared.

Advance rulings on classification and valuation provide binding certainty for importers before shipment.

Ad valorem excise is computed as rate times value; specific excise is computed as rate times quantity in litres, kilograms, or sticks.

For locally manufactured goods the excise value is normally the ex-factory price, excluding VAT and excluding the excise itself.

For imports the excise base is the customs value plus customs duty, so duty increases the excise payable.

Hybrid excise combines a specific and an ad valorem element, calculated separately then summed.

Rate schedules are set out in the excise tariff and are amended by annual finance acts, applying from the stated effective date.

In an income tax computation, surcharge is added after the basic tax is computed on taxable income, producing total tax payable.

In an import computation, the order is customs value, plus duty, plus excise, plus surcharge, then VAT on the aggregate.

Surcharge is not offset by tax credits or withholding tax already paid unless the statute permits it.

A surcharge may be imposed on unpaid tax as an alternative to interest for the first period of default, then replaced by interest.

Refunds of surcharge follow the same procedure and time limits as refunds of the primary tax.

Benefits in kind are valued at cost to the employer or at prescribed deemed values, such as a percentage of the vehicle's cost for company cars.

Reimbursed business expenses are not taxable where they are wholly and exclusively incurred in employment; private expenses are taxable.

Terminal benefits and gratuities are taxable in the year received unless a specific exemption applies.

Employer contributions to approved pension schemes are generally deductible for the employer and not taxable to the employee until drawn.

Pay-as-you-earn withholding obliges employers to deduct tax from salaries and remit it monthly.

Import VAT is charged on the aggregate of customs value, customs duty, excise, and surcharge, and is paid at clearance.

Registered importers may recover import VAT as input tax where the goods are used for taxable supplies and a customs receipt is held.

Exports of goods are zero-rated, and exporters may recover input tax attributable to export sales.

Services supplied to non-residents may be zero-rated where the place of supply is outside the country.

Deferred payment accounts allow approved importers to pay import VAT periodically rather than at each clearance.

False declarations, forged documents, and undervaluation are offences attracting fines, imprisonment, or both.

Customs officers may examine goods, search premises under warrant, and require production of books and records.

An appeal against a customs decision is lodged with the customs authority first, then with the tribunal or court within the prescribed time.

Goods may be released provisionally against a deposit or guarantee pending resolution of a valuation dispute.

Voluntary disclosure before detection generally reduces penalties and avoids prosecution.

Excise duty is due at the time excisable goods are removed from the factory or released from bond for home use.

Losses and wastage in production are allowed only within approved limits; excess losses are treated as removals and taxed.

Records of raw materials, production, and removals must be kept for the statutory period and produced on demand.

Excisable goods sold below the statutory minimum price may be taxed on the minimum price instead of the actual price.

Transport of excisable goods requires a movement document or permit to evidence lawful possession.

Surcharge differs from a levy in that it is ancillary to a primary tax and cannot exist independently of it.

The surcharge base is the net tax payable after credits and reliefs, unless the statute specifies the gross tax.

Where a surcharge is earmarked, receipts are credited to a designated fund and reported separately in the accounts.

Surcharge on excise is calculated on the excise amount and collected with the excise return.

Non-payment of surcharge attracts the same enforcement measures as non-payment of the primary tax, including distress and garnishee.

Stock is valued at the lower of cost or net realisable value, consistently applied, and opening stock is deducted while closing stock is added.

Depreciation in the accounts is disallowed and replaced by capital allowances computed under the tax rules.

Donations and charitable payments are deductible only where made to approved bodies and within statutory limits.

Fines, penalties, and taxes on income are not deductible; VAT and customs duty are deductible where they form part of business costs.

Interest incurred on borrowings used to produce income is deductible, subject to thin-capitalisation or limitation rules.

A supply is a taxable supply if it is made for consideration in the course or furtherance of a business by a registered person.

The taxable value of a supply between related parties may be adjusted to open market value where consideration is below market.

Output tax on goods sold under a hire-purchase or credit agreement arises on the cash received or the invoice date, per the statutory tax point.

Bad debt relief allows recovery of output tax on unpaid debts after a statutory period and on written-off amounts.

Penalties for incorrect returns include a percentage of the tax understated, with higher rates for deliberate errors.

The Harmonized System organises goods into 21 sections, 97 chapters, headings, and subheadings, applied through six General Interpretative Rules.

Rule 1 gives primacy to heading text and section or chapter notes; classification proceeds to later rules only if Rule 1 is inconclusive.

Rule 3 resolves competing headings by specificity, essential character, or last in numerical order.

Rule 6 extends the rules to subheading comparison at the same level.

Misclassification changes the duty rate and may also change excise and VAT liability on import.

Exemptions are granted by statute to specified persons or uses, such as diplomatic missions, defence forces, and approved industrial inputs.

Exempt excisable goods must still be declared and accounted for, and diversion to taxable use triggers duty.

Exported excisable goods are generally exempt or zero-rated, and duty paid on inputs may be refunded.

Denatured or unfit goods may be exempt where the law provides for denaturing under supervision.

Exemption certificates must be produced at the time of removal or clearance to be effective.

If income tax payable is 100,000 and the surcharge rate is 10%, the surcharge is 10,000 and total tax is 110,000.

If customs duty is 50,000, excise 20,000, and surcharge 5% of duty, the surcharge is 2,500 and the VAT base is 72,500.

Surcharge is rounded according to the statutory rounding rule, usually to the nearest currency unit.

Surcharge on late payment is calculated on the unpaid balance from the due date to the payment date at the prescribed rate.

Where a surcharge is capped, the cap applies to the surcharge amount, not to the primary tax.

A company is resident where it is incorporated or where its central management and control is exercised, depending on the statutory test.

Source of income from services is generally where the services are performed; source of interest and royalties depends on the payer's residence or the location of the underlying asset.

Double taxation agreements allocate taxing rights and provide credit or exemption relief for foreign taxes paid.

Foreign-source income of residents may be taxed with a credit for foreign tax, subject to treaty limits.

Change of residence mid-year requires apportionment of reliefs and income under the statutory rules.

Output tax is recorded when the tax point occurs, regardless of when payment is received under the invoice basis.

Cash-basis accounting is available to small businesses below a turnover threshold, recording VAT when payment is made or received.

A VAT control account reconciles output tax, input tax, and payments to the revenue authority each period.

Credit notes and debit notes must cross-reference the original invoice number and date.

Customs receipts for import VAT must be retained and matched to the relevant return period.

A bonded warehouse allows imported goods to be stored duty-suspended until they are entered for home use or re-exported.

The warehouse keeper must keep stock records, provide security, and account for shortages as duty payable.

Manufacturing in bond permits processing of imported inputs with duty deferred until the finished product is cleared.

Goods remaining in bond beyond the permitted period may be sold or forfeited to recover duty.

Removal of goods from bond without authority is an offence attracting penalties and seizure.

Alcohol excise is often specific per litre of pure alcohol, with different rates by beverage category.

Tobacco excise commonly combines a specific amount per stick with an ad valorem percentage of retail or ex-factory price.

Petroleum excise is usually specific per litre and may be adjusted by automatic indexation.

Luxury goods excise may be ad valorem on the retail or wholesale price above a threshold.

Sugar-sweetened beverage excise is typically specific per litre or per gram of sugar content.

Surcharge must be shown separately on the return and on the assessment notice.

Objections to surcharge follow the same procedure and time limits as objections to the primary tax.

Where a surcharge is imposed by regulation rather than statute, the regulation must be authorised by the parent act.

Refunds of surcharge paid in error require a written claim with supporting documents within the statutory period.

Surcharge arrears are subject to the same collection powers as the primary tax, including agency notices.