Timor-Leste Corporate Income Tax

Corporate income tax rates and base

Companies pay corporate income tax (CIT) at a flat rate, with special rates for the petroleum sector. Several payments are taxed by way of final withholding. Unverified draft figures.

• General corporate income tax rate — 10 percent (flat) (Taxes and Duties Act (Law No. 8/2008))
• CIT — oil & gas contractors — 30 percent (flat) (Taxation of Bayu-Undan Contractors Act / Taxes and Duties Act (Law No. 8/2008))
• CIT — petroleum sub-contractors — Generally 6 percent (flat) (Taxes and Duties Act (Law No. 8/2008))
• Tax base — Net taxable income = gross income less allowable deductions; residents taxed on worldwide income, non-residents on Timor-Leste-source income (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — dividends (resident to resident) — 0 percent (final) (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — interest (resident to resident) — 0 percent (non-final) (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — royalties (resident) — 10 percent (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — rent of land/buildings (resident) — 10 percent (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — construction/building activity — 2 percent (final) (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — construction consulting — 4 percent (final) (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — mining/mining support services — 4.5 percent (final) (Taxes and Duties Act (Law No. 8/2008))
• Withholding tax — payments to non-residents — 10 percent (on Timor-Leste-source income paid by a resident to a non-resident) (Taxes and Duties Act (Law No. 8/2008))
• Annual CIT return filing deadline — Last day of the third month after the tax year-end (≈ 31 March for calendar-year filers) (Taxes and Duties Act (Law No. 8/2008))
• CIT payment deadline — Final tax due by the annual return filing date (Taxes and Duties Act (Law No. 8/2008))