Taxes in Eswatini

Eswatini has a central state tax system administered by the Eswatini Revenue Service (ERS), formerly the Swaziland Revenue Authority. The Commissioner General oversees the service, while the ERS Customs and Excise Department handles border taxes. The system includes income tax under the Income Tax Order 1975, VAT under the Value Added Tax Act 2011, customs and excise duties, and specific levies such as the Alcohol and Tobacco Levy and the Fuel Tax under the Fuel Tax Act 2022. There is no separate municipal income tax equivalent. The tax year normally runs from 1 July to 30 June, although the ERS may approve another company year-end. Eswatini generally follows a source-based approach. Income arising from work, business or other activities in Eswatini can therefore be taxable there, including income earned by a non-resident from an Eswatini source. Tax residence is not expressed through one comprehensive statutory definition in the available rules; regular work or business activity in Eswatini can result in resident treatment in practice. A person or business should therefore establish where the income-generating activity occurs and whether a tax treaty changes the result. Personal income tax applies progressively to taxable income. The published bands are 20% on income from E0 to E100,000, E20,000 plus 25% on the amount above E100,000 up to E150,000, E32,500 plus 30% on the amount above E150,000 up to E200,000, and E47,500 plus 33% on income above E200,000. The standard annual rebate is E8,200, increasing to E10,900 for a person older than 60. The practical tax-free effect is approximately E41,000 of taxable salary after the standard rebate, but the result depends on the calculation and the type of income. Separate concessionary rates can apply to redundancy and retirement payments. Employers normally collect Pay As You Earn (PAYE), the withholding of employee income tax from wages. The employer files a monthly deduction return and pays the withheld amount by the seventh calendar day of the following month. The employer remains personally liable for amounts that should have been withheld. Late PAYE can attract a 20% penalty and 18% interest. The Final Deduction System (FDS) can apply where an employee has one employer, receives only remuneration and has no other income; annual-return exceptions do not generally apply where income is at least E1.2 million. An individual annual return is particularly relevant for self-employed people and professionals, people receiving interest or dividend income, people with income of at least E1.2 million, and anyone directed to file by the Commissioner General. The usual deadline is 31 October or 120 days after 30 June, depending on the applicable filing rule and the ERS notice. Approved pension contributions are deductible within the applicable limits, including a minimum or maximum of 10% of gross salary for pension purposes. Retirement annuity contributions can generally be deducted up to 15% of trade taxable income after pension contributions. Interest on a qualifying mortgage for a self-occupied home may be deductible up to E2,400, while medical expenses are not deductible. Business expenses must relate to producing income and cannot be capital expenses. Companies generally pay corporate income tax at 25% under the reform applying from 1 July 2024. Some ERS material may still display 27.5%, so the assessment period and current ERS notice should be checked when calculating a liability. A branch can also face a 15% branch profits tax on deemed repatriated income. A permanent establishment is generally connected with physical presence in Eswatini. A local subsidiary is often used in practice instead of a branch, but the legal and tax consequences differ. Companies and other business taxpayers normally submit an annual return by 31 October or within 120 days after an approved alternate year-end. Provisional corporate income tax is paid in two instalments: within six months after the year-end and by the last day of the year-end, with a third top-up payment made with the annual return or assessment. Self-assessment applies to all taxpayers. Filing an objection or appeal does not automatically suspend payment of the assessed liability. Presumptive tax can apply from 1 July 2024 to an ordinarily resident taxpayer or a business operating in Eswatini with turnover below E500,000. Turnover up to E50,000 is taxed at 0%; turnover above E50,000 and below E500,000 is taxed at 1.75% of turnover. Provisional instalments are cumulative: 25% by 30 September, 50% by 31 December, 75% by 31 March and 100% by 30 June, followed by the annual return. Individual businesses and property activities may be subject to loss ring-fencing, and the reform provides a five-year loss carry-forward period. Older summaries may state different rules, so the applicable assessment period must be confirmed. VAT is a 15% consumption tax on taxable goods and services and on imports. Registration is compulsory when taxable turnover exceeds E900,000, while voluntary registration below that threshold may be possible. Public bodies, parastatals and municipalities can also fall within VAT where they make taxable supplies. Registered businesses need a TIN, a VAT certificate, reliable records and periodic returns. Returns can be monthly or quarterly under the ERS schedule. Exempt supplies include many financial and insurance services, education, medical and social-welfare services, certain land and buildings, and some passenger transport. Zero-rated supplies include exports, selected staple foods, agricultural inputs, medicines, fuel and international transport. Imports from within SACU and from outside SACU remain subject to VAT even where customs duty is not charged. Imported services can trigger a 15% reverse-charge obligation, normally declared and paid within 30 days of the invoice; a full input-credit business may be treated differently. Recent VAT administration changes include electronic tax invoices, fiscal receipts, credit and debit notes, electronic fiscal devices and e-invoicing. TaxEase provides an online self-service channel. VAT records, tax invoices and supporting documents should be kept in Eswatini as required, because the ERS may review a VAT registration or return, commonly within 30 days in the relevant process. Refunds of overpayments can generally be claimed, with the research basis indicating a 45-day period for payment of approved refunds. Withholding tax applies to specified payments. Typical resident rates are 10% on dividends, 10% on interest and 10% on rent paid through an agent; trust beneficiaries can be subject to 33%. Payments to non-residents commonly attract 15% on dividends, interest, royalties, management fees, entertainers, sportspeople and non-resident contractors or professionals, although SACU rules and double-tax treaties can change the result. Withheld tax is generally remitted by the 15th of the following month. Construction and professional agreements may need notification within 30 days. Failure to withhold can attract a 20% penalty, while failure to remit withheld tax can attract penalties ranging from 10% to 25% according to the delay. Imports are affected by Eswatini's SACU membership. Goods from other SACU members are generally free of customs duty and excise, although VAT can still apply. Goods from outside SACU are normally assessed under the SACU Common External Tariff. SADC and COMESA preferences may reduce duty where the origin and documentary requirements are met. The customs process requires an import declaration, correct tariff classification and payment of any applicable customs duty, excise, alcohol or tobacco levy. Tariff amendments can change the result, so the current ERS Customs and Excise classification should be checked for the specific goods. Other charges include graded tax of E18 per year for employed adults. Eswatini has no general net wealth, inheritance, estate or gift tax and no separate social-security contribution according to the available tax summary. Property, mortgage, lease and share transfers can attract stamp or transfer tax on a sliding scale reaching up to 6%. There is no general capital gains tax, but gains and losses on business assets can be included in taxable business income. Related-party transactions must follow the arm's-length principle, and transfer-pricing documentation and methods may be required. Shareholder loans can sometimes be treated as taxable amounts. Development Enterprise Agreements or development approval orders may provide specific tax concessions. A business should register with the ERS when it starts operating and obtain a Taxpayer Identification Number (TIN) for dealings with the tax authority. A Tax Clearance Certificate generally requires current PAYE obligations, assessments, returns, provisional tax and VAT returns and payments. Payment can be made by electronic transfer, bank, cash, cheque or card at service centres, and TIN taxpayers may also use MTN Mobile Money. Taxpayers have rights to representation, explanations of decisions, privacy and confidentiality, complaints, payment plans, refunds and review or appeal. They must keep accurate records, file honest returns, pay on time, notify the ERS promptly of a business or registration change and cooperate with checks. An objection to an income-tax assessment should normally be submitted in writing within 21 days after the assessment notice and should state detailed grounds. Appeals generally follow a 21-day period. The Revenue Appeals Tribunal, established under the Revenue Appeals Tribunal Act 13/2019, is the principal specialist appeal body, with possible High Court review afterward. VAT objections have a statutory response period of 90 days. Tax liability generally remains payable during a dispute. Late income-tax returns can attract a penalty of 20% of tax payable or E20 where the return shows a loss. Eswatini has double-tax agreements with South Africa, Mauritius, the United Kingdom, Seychelles, the Republic of China on Taiwan, Botswana and Lesotho. These agreements can change withholding rates, permanent-establishment treatment and taxing rights. Eswatini does not generally provide a foreign-tax-credit regime outside the applicable treaty framework, so foreign income and cross-border payments require a country-by-country review. Information exchange and base erosion and profit-shifting measures are developing, making accurate records and related-party documentation increasingly relevant.