Southern African Development Community :: Swaziland Direct Taxes

A. Income Tax: Scheme of the Act

The Income Tax Order 1975, as amended, does not impose tax on “profits and gains” as such, but in respect of taxable income as defined. Neither does it impose tax upon residents in respect of their entire income from all sources; that is on their worldwide income. Tax is only levied on taxable income, which has a source in Swaziland, or a source deemed to be in Swaziland. Using source as the basis of liability to taxation it follows that both residents of Swaziland and non-residents are liable to taxation in respect of income having a local source or deemed to be in Swaziland.

The Order provides for exemptions and exceptions; deductions; and rebates. Special concessions are made for specified classes of taxpayers: for example farmers and persons engaged in mining operations.

Taxable income includes both income which has been received in the year and income, which has accrued during the year; that is, income which the taxpayer has a right to receive for the year. However, receipts and accruals of a capital nature are excluded unless specifically included by law. At the same time expenses incurred in the year in earning the income, whether such expenses were actually paid out or not within that year, qualify for deduction in that year provided that they do not partake of a capital nature. The Order defines “taxable income”; it is determined by taking the total of gross income minus “exempt income” which equals “income” and income minus permissible deductions, which equals “taxable income”.

Income tax is calculated on taxable income; for companies this will be the amount of tax payable, as companies do not qualify for rebates. However, in the case of individuals there is further relief by way of rebates.

Taxable persons include individuals, companies, bodies of persons whether incorporated or not, insolvent estates, estates of deceased persons and trusts. Partnerships are not taxable entities but each partner is taxed on his share of the partnership income.

B. Income Tax on Resident Corporations (National Government)

1. Name of Tax and Levied in Terms of Which (Name, Number and Year)

Income Tax, The Income Tax Order, 21 of 1975, as amended (hereinafter referred to as “the Order”)

2. Department Responsible for Administration

The Department of Taxes headed by the Commissioner of Taxes.

3. Definition and Classification

The term company is defined in section 2 of the Order to include:

- any association incorporated by or under any law in force in Swaziland;

- any association which is incorporated outside Swaziland but carries on business or has an office or place of business in Swaziland; or

- any body corporate incorporated by any law in force in Swaziland or by any law in force in any country outside Swaziland but carrying on business in Swaziland.

4. Basis of Taxation

4.1 Source-based or residence based

In Swaziland, income tax is based on source, and apart from a few exceptions, residence is not a criterion.

4.2 If source, define:

4.2.1 Actual source

The term “source” is not defined in the Order and guidance must be sought from judicial decisions. The courts have held that two factors have to be established to determine the source of the income –

- the originating cause of the income (what give rise to the income); and

- the location of that originating cause – being the source of income.

4.2.2 Deemed source

The following amounts are deemed have accrued from a Swaziland source:

- amounts derived from a contract made in Swaziland for the sale of goods, whether such goods have been delivered or are to be delivered in or outside Swaziland (s 11(1)(a));

- amounts derived for services rendered or work or labour done by a person in the carrying on in Swaziland of any trade (s 11(1)(b));

- amounts derived for services rendered by a person, or to work or labour done by such person for or on behalf of the Government (s 11(1)(c));

- amounts derived from any business carried on by a person who is ordinarily resident in Swaziland, or a company which is incorporated, managed or controlled in Swaziland, as owner or charterer of any aircraft, wheresoever such aircraft may be operated (s 11(1)(e));

- amounts derived for services rendered or labour done by such person, being a person ordinarily resident in Swaziland, as an officer or a member of the crew of any aircraft (s 11(1)(f));

- amounts derived for the use or right of use in Swaziland of, or the grant of permission to use in Swaziland of any patent, design, trade mark, copy right, model, pattern, plan formula, or process or any other property or right of a similar nature (s 11(1)(g)(i));

- amounts derived for the use or right of use in Swaziland of, or the grant of permission to use in Swaziland any motion picture film, or any film or video tape or disc for us in connection with television, or any sound recording or advertising matter used or intended to be used in connection with such motion picture film, film or video tape or disc (s 11(1)(g)(ii));

- amounts derived for the use or right of use in Swaziland of, or the grant of permission to use in Swaziland any video or audio material transmitted by satellite, cable, optic fibre, or similar technology for use in connection with television or radio broadcasting (s 11(1)(g)(iii));

- amounts derived for the use or right of use, or the grant of permission to use in Swaziland of plant machinery, equipment or vehicles or any other movable property (s 11(1)(gg));

- amounts derived for the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in Swaziland (s 11(1)(h));

- amounts derived as a management charge paid by any person ordinarily resident or carrying on business in Swaziland (s 11(1)(j));

- amounts derived by any person ordinarily resident in Swaziland by way of interest upon any stocks or securities issued by any Government other than the Government of Swaziland, if such amount is not chargeable with income tax in such country of origin (s 11(7);

- any interest received by or accrued to a person who is ordinarily resident in Swaziland in respect of a loan to, or deposit in a building society other than the building society registered under the provisions of the Building Societies Act (s 11(9));

- any interest received by or accrued to a person who is ordinarily resident or carrying on business in Swaziland from a source outside Swaziland arising out of any remittance from Swaziland (s 11(9A));

4.3 If residence, define:

4.3.1 Define resident

4.3.2 Exclusions from the definition of resident:

4.3.3 Ceasing of residency provided for in the Act

5. Time Tax is Levied

Tax is levied on the date the amount is received or it accrues.

6. Included in Tax Base

Swaziland sourced income.

7. Year of Assessment

In the case of a company, its year of assessment commencing from the first day of July except in cases where thefinancial year-end of the company has been approved by the Commissioner.

8. Computation of Taxable Income

8.1 Exemptions

(Do not only indicate the heading, but provide a brief explanation. Please take note that interest is dealt with under a separate heading)

8.1.1 Partial exemptions (amounts exempt irrespective of the identity of the recipient):

Life insurance companies: s 12(1)(a)(i) provides for the exemption from normal tax (income tax) of all receipts and accruals of life insurance companies (including investments). Other insurance is subject to tax;
Insurance business: In terms of s 12(1)(a)(ii) receipts and accruals derived from insurance business by the Swaziland Royal Insurance Corporation are exempt from tax if they are not distributed to shareholders;
Company, society or other associations: In terms of s 12(1)(a)(vi), the company, society or any other association of persons, whether or not registered under any law, to be entitled to exemption must show:

- that its profits or gains are derived solely from transactions with its individual members; or

- that its profits or gains are derived solely from transactions on behalf of its individuals members; and

- that its constitution does not admit of the distribution of its profits or gains to any persons other its members, with whom or on whose behalf the transactions took place; and

- that its constitution does not confer upon person any benefit other than benefits accruing to that person from transactions with or on behalf of such persons.

An exemptorganisation:s 12(1)(a)(vii) provides for the exemption of the income of sporting associations, except income flowing from investments. It is only those associations which in the opinion of the Commissioner are amateur sporting associations that are exempt.

8.1.2 Absolute exemptions (taxpayers enjoying completed exemption from tax on income):

a pension fund, a retirement annuity fund, a benefit fund or a provident fund: in terms of s 12(1)(a)(iv) all receipts and accruals of these entities are exempt from income tax. The funds referred to, mean those funds either established by law or those that have been approved as such by the Commissioner of Taxes.
Dividends received by or accrued to or in favour of any person not ordinarily resident or carrying on business in Swaziland, are exempt from income tax.
In terms of s 12(1)(e)(iii) inter-company dividends are not subject to income tax.
Any interest received by or accrued to any person neither ordinarily resident nor carrying on business in Swaziland from stock or securities issued by the Government or any local authority in Swaziland, or any parastatal or statutory corporation is exempt from tax (s 12(1)(h)).
Any interest received by or accruing to any person not ordinarily resident in Swaziland from any loan made to the Ngwenyama in trust for the Swazi Nation is exempt from income tax under s 12(1)(i).
Any interest and other charges on any loan which the Government has in terms of written undertaking exempted or undertaken to exempt from tax to the extent specified in such undertaking is exempt from income tax in accordance with s 12(1)(r).
Any amount received by or accrued to any person in respect of services rendered in Swaziland which the Government has undertaken shall be exempt from normal tax by the terms of its written agreement with the government of another state or with an international or world organisation or body (s 12(1)(m)).

8.2 Deductions and recoupments

The Order provides a general rule for business deductions as well as special deductions:

S 14(1)(a) General rule

Expenditure and losses, other than those of a capital nature, incurred in the production of income are deductible in the determination of taxable income, as well as expenses incurred outside Swaziland in the production of taxable income as the Commissioner may allow.

Special deductions

repairs (s 14(1)(b));

The section allows a deduction from income for expenditure actually incurred on ;

- repairs of property occupied for the purposes of trade or in respect of which income is receivable, or on the repairs of machinery, implements, utensils and articles used by the taxpayers for the purposes of trade.

Wear and tear (s 14(1)(c));

The section provides for the deduction of such sum as the Commissioner may think just and reasonable as representing the diminished value by reason of wear and tear during the year of assessment of any plant, machinery, implements, utensils, and articles used by the taxpayer for the purposes of the taxpayer;s trade.Such be value shall be reduced by the amountof deduction which may bemade under paragraph (e)(i) and (ii).

Scrapping allowance (s 14(1)(f);

This allowance is claimable on machinery, implements, utensils and articles, used for the purpose of taxpayer;s trade that have been scrapped during the year of assessment.

Erection of dwelling for employees (s 14(1)(g);

A taxpayer who incurs expenditure in connection with the erection of any dwellings is entitled to a deduction of the expenditure incurred on each dwelling subject to a maximum of E12 000 per dwelling allowable as follows:

(a) in the first year an allowance of 20% subject to a maximum of E12 000 per dwelling.

(b) In the next eight years an allowance of 10% subject to a maximum of E6 000 per dwelling.

The allowance is only available to the taxpayer provided that:

(a) the taxpayer does not trade in immovable property;

(b) the dwellings are for the use of the employees of the taxpayer other than managerial and supervisory employees;

(d) in a process deemed by the Commissioner to be a process of manufacture.

Retirement annuity funds (s 14(1)(j);

Contributions to a retirement annuity fund will be allowed as a deduction and are limited to15% of the taxable income in respect of trade carried on by such person and/or any other earned income. However, where such person also makes contributions to a pension fund then the 15% allowed as a deduction shall be reduced by the person contributions.

Contributions by employer to a pension, provident or benefit funds (s14(1)(k);

Contributions made by an employer to any fund established for the benefit of his employees are allowable in the year of assessment up to an amount not exceeding 20% of the total remuneration, which accrued during that year in respect of such employees who are members of the fund.

An employer may deduct such contributions, subject to the following provisos:

(a) if the contributions (including any lump sum) per employee exceed 20% of the approved remuneration of the employee and the Commissioner feels that such contribution is excessive, he may disallow all or portion of the deduction in so far as it exceeds 20% of the approved remuneration for the year.

Approved remuneration is so much as the Commissioner considers to be a fair and reasonable remuneration in relation to the value of the employee;s services, taking into account any fringe benefits derived by the employee.

(b) Where the contributions are in respect of a lump sum, such contributions are deducted in a series of annual instalments so that only a portion of the lump sum is deducted in the year of assessment during which the contribution was made, and the residue in the subsequent years of assessment. The portion of the lump sum payment to be allowed each year is in the discretion of the Commissioner.

Annuities paid to former employees on retirement (s 14(1)(l));

An employer may deduct an annuity for each year that it is paid to a former employee, provided that:

- the employee retired on the grounds of old age, ill-health or infirmity; or

- where annuity is paid to the dependents of a former retired employee or deceased employee;

The deduction is limited to E12 000 per former employee per year, irrespective of the number of his dependents.

Lease premiums (s 14(1)(n));

A taxpayer may claim a deduction from income for a premium or consideration in the nature of a premium paid for:

- the right of use or occupation of land or buildings; or

- the right of use of any plant or machinery; or

- the right of use of any patent, design, trade mark or copyright or any other property of a similar nature.

Lease improvements (s 14(1)(o));

The lessee is entitled to deduct the cost of improvements to land or buildings if it is effected in terms of an obligation imposed upon the lessee under an agreement of lease. The deduction for any one year must not be greater than the total premium divided by the number of years for which he will enjoy the right of use or occupation, or 25 years.

Bad debts (s 14(1)(q));

A deduction from income may be made for debts due to taxpayer to the extent to which they are proved to the Commissioner;s satisfaction to be bad, provided that such debts have been included in taxpayer;s income in the year of assessment or prior year.

Doubtful debts (s 14(1)(r));

A deduction from income may be claimed by a taxpayer in respect of debts due to a taxpayer which are considered to be doubtful provided that the amount so allowed is brought back into income the following year of assessment. The amount allowed is at the discretion of the Commissioner.

Interest (s 14(1)(s));

A deduction from income may be claimed for any interest payable on loans made to the taxpayer, including interest on debenture or debenture stock. However, the Commissioner must be satisfied that the loan was employed in production of income or for purposes of the trade of the taxpayer, and where the Commissioner considers that the rate of interest is excessive, he may determine the deduction to be allowed in accordance with such rate of interest as he considers just and reasonable.

Scientific research (s 14(1)(t)(i) and (ii));

A deduction may be claimed for expenditure not of a capital nature incurred by the taxpayer:

- for the purpose of scientific research carried on by taxpayer for development of taxpayer;s business;

- by way of contributions to any association, institute, college or university to be used in scientific research relating to the taxpayer;s business, if the Commissioner is satisfied that such contributions will be used in such research.

Contributions, grants or donations to employee;s training (s 14(1)(t)(iii));

The expenditure incurred by an employer by way of contributions, grants or donations to any of his employees is only deductible on the following basis ;

- it must be incurred in order to assist an employee in furthering his particular professional field;

- the training must undertaken at the University of Swaziland or at any other approved university or institution; and

- it must lead to the securing of a recognised qualification.

The expenditure can only be deducted in the year of assessment when it is incurred.

Contribution to an approved bursary scheme (s 14(1)(t)(iv));

A deduction may be claimed for expenditure incurred by way of contribution to a bursary scheme. For the expenditure to be allowed as a deduction the scheme must be approved by the Commissioner.

Contributions, grants or donations to a professional body (s 14(1)(t)(v));

The expenditure to be deductible the following conditions have to be met:

- the contributions, grants or donations must be made to a professional body established by law ;

- it must be educational or training purposes;

- the Commissioner must be satisfied that the said amount was actually paid during the year of assessment it is claimed; and

- such expenditure is claimable subject to a limit of E50 000.

Grants to schools and hospitals (s 14(1)(v));

A deduction may be claimed for grants made to the Government for the erection of schools and hospitals. The Commissioner has discretion to decide the amount to be allowed as a deduction in the year of grant and in subsequent years.

Grants to the University relative to capital projects (s 14(1)(vv);

A deduction may be claimed for contributions made to the University of Swaziland for capital projects. The expression ;capital projects; includes buildings, equipments, fittings , furniture as well as other items associated with capital assets needed for the development of the University.

Contributions to a disaster scheme (s 14(z));

A deduction may be claimed for any contributions whether in cash or in kind, made during the year of assessment towards any national disaster scheme established by the Government. Deduction of contributions made by members of the public including compies in respect of a specific project or to provide financial and material assistance to orphans and vulnerable children which are in relation to projects approved by NERCHA.

Listing fees (s 14(1)(6));

A deduction may be claimed for listing fees payable in the year of assessment by a company in connection with the floatation of its shares on the Swaziland Stock Exchange. Such a deduction must not exceed one-third of the total fees in the year in which the listing fees become payable and the balance over the next two years succeeding the year in which such listing fees become payable.

8.2.1 Allowable deductions

The Order provides a general rule for business deductions as well as special deductions:

S 14(1)(a) General rule

- for the purpose of scientific research carried on by taxpayer for development of taxpayer;s business;

Contributions, grants or donations to employee;s training (s 14(1)(t)(iii));

The expenditure incurred by an employer by way of contributions, grants or donations to any of his employees is only deductible on the following basis;

- it must be incurred in order to assist an employee in furthering his particular professional field;

- the training must undertaken at the University of Swaziland or at any other approved university or institution; and

- it must lead to the securing of a recognised qualification.

Special deductions

repairs (s 14(1)(b));

The section allows a deduction from income for expenditure actually incurred on ;

Wear and tear (s 14(1)(c));

The section provides for the deduction of such sum as the Commissioner may think just and reasonable as representing the diminished value by reason of wear and tear during the year of assessment of any plant, machinery, implements, utensils, and articles used by the taxpayer for the purposes of the taxpayer;s trade. Such be value shall be reduced by the amountof deduction which may bemade under paragraph (e)(i) and (ii).

Scrapping allowance (s 14(1)(f);

This allowance is claimable on machinery, implements, utensils and articles, used for the purpose of taxpayer;s trade that have been scrapped during the year of assessment.

Erection of dwelling for employees (s 14(1)(g);

(a) in the first year an allowance of 20% subject to a maximum of E12 000 per dwelling.

(b) In the next eight years an allowance of 10% subject to a maximum of E6 000 per dwelling.

The allowance is only available to the taxpayer provided that:

(a) the taxpayer does not trade in immovable property;

(b) the dwellings are for the use of the employees of the taxpayer other than managerial and supervisory employees;

(d) in a process deemed by the Commissioner to be a process of manufacture.

Retirement annuity funds (s 14(1)(j);

Contributions to a retirement annuity fund will be allowed as a deduction and are limited to15% of the taxable income in respect of trade carried on by such person and/or any other earned income. However,where such person also makes contributions to a pension fund then the 15% allowed as a deduction shall be reduced by the person contributions.

Contributions by employer to a pension, provident or benefit funds (s14(1)(k);

An employer may deduct such contributions, subject to the following provisos:

Annuities paid to former employees on retirement (s 14(1)(l));

An employer may deduct an annuity for each year that it is paid to a former employee, provided that:

- the employee retired on the grounds of old age, ill-health or infirmity; or

- where annuity is paid to the dependents of a former retired employee or deceased employee;

The deduction is limited to E12 000 per former employee per year, irrespective of the number of his dependents.

Lease premiums (s 14(1)(n));

A taxpayer may claim a deduction from income for a premium or consideration in the nature of a premium paid for:

- the right of use or occupation of land or buildings; or

- the right of use of any plant or machinery; or

- the right of use of any patent, design, trade mark or copyright or any other property of a similar nature.

Lease improvements (s 14(1)(o));

Bad debts (s 14(1)(q));

Doubtful debts (s 14(1)(r));

Interest (s 14(1)(s));

Scientific research (s 14(1)(t)(i) and (ii));

A deduction may be claimed for expenditure not of a capital nature incurred by the taxpayer:

- for the purpose of scientific research carried on by taxpayer for development of taxpayer;s business;

- by way of contributions to any association, i i i institute, college or university to be used in scientific research relating to the taxpayer;s business, if the Commissioner is satisfied that such contributions will be used in such research.

Contributions, grants or donations to employee;s training (s 14(1)(t)(iii));

The expenditure incurred by an employer by way of contributions, grants or donations to any of his employees is only deductible on the following basis:

- it must be incurred in order to assist an employee in furthering his particular professional field;

- the training must undertaken at the University of Swaziland or at any other approved university or institution; and

- it must lead to the securing of a recognised qualification.

The expenditure can only be deducted in the year of assessment when it is incurred.

Contribution to an approved bursary scheme (s 14(1)(t)(iv));

A deduction may be claimed for expenditure incurred by way of contribution to a bursary scheme. For the expenditure to be allowed as a deduction the scheme must be approved by the Commissioner.

Contributions, grants or donations to a professional body (s 14(1)(t)(v));

The expenditure to be deductible the following conditions have to be met:

- the contributions, grants or donations must be made to a professional body established by law ;

- it must be educational or training purposes;

- the Commissioner must be satisfied that the said amount was actually paid during the year of assessment it is claimed; and

- such expenditure is claimable subject to a limit of E50 000.

Grants to schools and hospitals (s 14(1)(v));

Grants to the University relative to capital projects (s 14(1)(vv);

Contributions to a disaster scheme (s 14(z));

Listing fees (s 14(1)(6));

8.2.2 Valuation of inventory/trading stock

Inventory valuation

Inventory valuation is not specific but is effectively at the lower cost (FIFO (first in, first out) or average cost) and net realizable value.

Trading stock (s 11bis )

The value of all trading stock held and disposed of by taxpayer at the beginning and end of each year of assessment must be taken into account, in the determination of the taxable income derived by any person during any year of assessment.

8.2.3 Reserves and provisions

Amounts carried to any reserve fund or capitalised in any way may not be deducted from income in computing tax income.

8.2.4 Non-deductible expenses

The following expenditure is not deductible:

Insured losses or expenses (s 15(c));

The section prohibits the deduction of expenditure or loss, which is recoverable under any insurance contract or indemnity.

Normal tax (s 15(d));

This section specifically prohibits the deduction of normal tax and any interest or penalty payable in consequence of the late payment of any tax or levy payable under any Act administered by the Commissioner.

Provisions and reserves (s 15(e));

Income carried to any reserve fund or capitalised in any way is not deductible. This provision supports the general principle that expenditure may only be deducted once it has been actually incurred and that provisions for future expenditure are not deductible.

Expenditure to produce exempt income (s 15(f));

Any expenditure incurred in generating income that is exempt is not deductible.

Non-trade expenditure (s 15(g));

A prohibition exists againstanymoney claimed asa deduction from income derived from trade, to the extent to which such moneywas not laid out or expanded forthe purposes of trade.

Notional expenditure (s 15(g)(iii));

The deduction of notional expenditure in respect of any interest, which might have been made on any capital employed in trade is not deductible.

8.2.5 Recoupments

The Order requires the inclusion of all amounts allowed to be deducted or set-off

8.3 Depreciable regime

8.3.1 Tangibles (movable and immovable assets, for example plant and machinery)

Capital Allowances

Business income is subject to generous allowances in the determination of taxable income.

Wear and tear (s 14(1)(c))

In computing taxable income, wear and tear allowances calculated on a reducing balance method are allowable deduction in respect of any industrial building, machinery, implements, utensils and articles used by the taxpayer for the purposes of trade. Wear and tear allowances are available on assets which a taxpayer owns.

In the case of industrial building, the amount prescribed in the law is 4% and in the case of machinery, implements, utensils and articles used by the taxpayer, the rate are prescribed by the Commissioner (see below), individuals claims may be made to the Commissioner in certain cases; claims involving assets which require special consideration; in the case of assets which are the subject of lease or hire agreements and which have been brought to use by the lessee.

Requests for allowances to be granted on ;straight line; basis will be considered but will not be granted indiscriminately, and the rates granted will be such that the rate per annum reduces the value of the asset to nil at the end of its agreed estimated life.

Assets Percentage Rate

(See note)

Aircraft 25%

Casino Equipment 15%

Construction Equipment (mobile) including

Bulldozers

Concrete mixtures 25%

Graders

Road scrapers

Computer hardware 331/3%

Computer software 331/3%

Furniture and fittings 10%

Hotel soft furnishing including carpets 20%

Legal and Professional Libraries 5%

Lifts and Elevators 25%

Motor vehicles:

Cars 20%

Light delivery vehicles 25%

Lorries 331/3%

Buses 331/3/%

Medical Equipment 20%

Musical Equipment 10%

Office Equipment including: 10%

Accounting Machines

Air Conditioning Plant

Binds and Curtaining

Fans

Plant and Machinery

Working one shift per day 10%

Working two shifts per day 17%

Working 24 hours per day 25%

Sound and Projection Equipment 20%

Television sets 20%

Tractors 25%

Trailers 20%

Industrial buildings (s 14(1)(d))

Annual allowance

An annual allowance of 4% of the cost of building or improvements in which manufacturing is carried on is deducted from taxable income.

Initial allowance (s 14(1)(e)(iii))

In addition to the annual allowance of 4%, an initial allowance of 50% of the cost of buildings or improvements in which manufacturing is carried on may be deducted at the taxpayer;s discretion. The initial allowance is a onetime deduction in the year in which the building is first brought into use or the improvements are completed. This allowance is subject to the condition that he building must be used to house machinery or plant which at the time of installation is new or unused or, if the machinery or plant is not new, has not previously been used in Swaziland and which does not replace other machinery or plant.

This initial allowance is also available to taxpayers who lease an industrial building to a lessee who uses it in his business.

Machinery and plant (manufacturing sector) (s 14(1)(e)(i))

Initial allowance

In addition to the wear and tear allowance an initial allowance of 50% of the cost of machinery or plant, which is used directly in the process of manufacture may be deducted at the taxpayers discretion. The initial allowance is a one-time deduction in the year in which the machinery or plant is first brought into use. This applies to machinery or plant, which at the time of installation is new or unused. It applies to machinery or plant which is not new or unused at the time of installation only if it is installed in an industrial building, does not replace other machinery or plant and has not previously used machinery or plant will be based on its depreciated value.

This initial allowance is also available to taxpayers who lease machinery or plant, which is brought into use by the lessee thereof and is used directly in the process of manufacture.

Infrastructural initial allowance (s 14(1)(e)(ii))

In addition to wear and tear allowance an initial allowance of 50% of the cost incurred by the taxpayer on infrastructural machinery, plant or facilities, including transmission equipment, lines and pipes used in the provision of infrastructural services on or after 1 July 2000. The initial allowance is a one-time deduction in the year in which the infrastructural machinery, plant or transmission equipment is first brought into use.

Hotels (s 14(1)(h))

Annual allowance

An annual allowance of 4% of any capital expenditure in connection with the erection of a new hotel or the effecting of any beneficial improvements to the amenities of an existing hotel is deducted from taxable income.

Initial allowance

In addition to the annual allowance of 4% an initial allowance of 50% of any capital expenditure in connection with the erection of a new hotel or the effecting of any beneficial improvements to the amenities of an existing hotel will be deducted from taxable income. The initial allowance is a one-time deduction in the year in which the new hotel or the beneficial improvements are first used.

Hotel machinery and plant initial allowances

In addition to wear and tear allowances an initial allowance of 50% of the cost of machinery or plant brought to use in the hotel industry will be deducted from taxable income. The initial allowance is a one-time deduction in the year in which the machinery or plant is first brought into use.

Employee housing allowance (s 14(1)(g))

For the erection of dwelling for employees an allowance of 20% may be claimed for the first year and 10% for each of the succeeding eight years. The same concessions are given to farmers in respect of any erections of any buildings used for the domestic purposes of any of his employees.

8.3.2 Intangibles/incorporeals (for example, copyright, patents, goodwill and other intellectual rights)

8.4 Treatment of losses

The balance of an assessed loss established in the previous year that has been carried forward from the preceding year must be set-off against any income earned in the current year of assessment. Assessed losses may be carried forward indefinitely and set-off against income in the later years.

9. Foreign Exchange Losses and Gains

Foreign exchange losses are allowable if they are of a revenue nature and are realised.

10. Branch Profits Tax

A branch of a company, which is incorporated outside Swaziland is taxed in Swaziland on the profits of the business carried on in Swaziland.

11. Group Taxation/Consolidated Returns

No group taxation.

12. Presumptive Tax Measures (for example, a minimum tax in the form of a gross asset tax)

No presumptive taxation.

13. Rates

All companies, 30%.

14. Rebates

None.

15. Withholding Taxes

Non-resident shareholders’ tax (NRST)(s 21)

Non-resident tax on dividends is payable at the rate of 15% (12.5% in respect of companies registered in Botswana, Lesotho, Namibia and the Republic of South Africa provided it is neither a subsidiary nor a branch of a company incorporated outside any of these countries). Non-resident shareholders’ tax is payable within 30 days of the date on which the dividend is payable. This is a final tax.

Non-resident’ tax on interest (NRTI)(s 27)

Tax is payable at the rate of 10%. Non-resident tax on interest is payable within 14 days of the date of accrual of the interest. This is a final tax.

Non-resident entertainers (s 32A)

Tax is payable at the rate of 15%. This tax relates only to public entertainers and sportsmen not ordinarily resident in Swaziland. The person making the payment is required to deduct the tax and pay it within 15 days.

Royalties and Management Fees (s 32B)

The withholding tax on royalties or management fees paid to non-residents is payable at a rate of 15%. The withholding tax on royalties and management fees is payable within 15 days from the date of payment. This is a final tax.

Non-resident Contractors (s 59)

Tax is payable at the rate of 15%. The tax withheld under this section is on account of the liability to tax of the non-resident person. It is required that the tax be paid within 15 days from the date of payment.

Swaziland source services contract (s 59A)

Tax is payable at the rate of 15%. A non-resident person is liable to withholding tax on the gross amount of any payment derived by the non-resident under a Swaziland services contract. The tax is payable within 15 days from the date of payment.

A “Swaziland source service contract” means a contract (other than an employment contract) –

(a) Under which the principal purpose of the contract is the performance of services which give rise to Swaziland-source income; and

(b) Where any goods supplied under the contract are only incidental to that purpose.

16. Beneficiaries of Revenue

Swaziland Government.

C. Income Tax on Individuals (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year

Income Tax, The Income Tax Order, 21 of 1975, as amended (hereinafter referred to as “the Order”)

2. Department Responsible for Administration

The Department of Taxes headed by the Commissioner of Taxes.

3. Definition and Classification

The term “individual” is used in its ordinary meaning wherever it appears in the Order.

4. Time Tax is Levied

Tax is levied on the date the amount is received or it accrues.

5. Basis of Taxation

5.1 Source-based or residence based

In Swaziland, income tax is based on source, and apart from a few exceptions, residence is not a criterion.

5.2 If source, define:

5.2.1 Actual source

- the originating cause of the income (what give rise to the income); and

- the location of that originating cause – being the source of income.

5.2.2 Deemed source

The following amounts are deemed have accrued from a Swaziland source:

- amounts derived from a contract made in Swaziland for the sale of goods, whether such goods have been delivered or are to be delivered in or outside Swaziland (s 11(1)(a));

- amounts derived for services rendered or work or labour done by a person in the carrying on in Swaziland of any trade (s 11(1)(b));

- amounts derived for services rendered by a person, or to work or labour done by such person for or on behalf of the Government (s 11(1)I;

- amounts derived by way of a pension or annuity granted to a person in respect of services performed in Swaziland (s11(1)(d));

- amounts derived for services rendered or labour done by such person, being a person ordinarily resident in Swaziland, as an officer or a member of the crew of any aircraft (s 11(1)(f));

- amounts derived for the use or right of use, or the grant of permission to use in Swaziland of plant machinery, equipment or vehicles or any other movable property (s 11(1)(gg));

- amounts derived for the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in Swaziland (s 11(1)(h));

- amounts derived by way of a judicial order, written agreement of separation or an order of divorce, if the taxable income of such person’s spouse or former spouse has been reduced by such amount (s 11(1)(i));

- amounts derived as a management charge paid by any person ordinarily resident or carrying on business in Swaziland (s 11(1)(j);

5.3 If residence,

5.3.1 Define resident

5.3.2 Exclusions from the definition of resident:

5.3.3 Ceasing of residency provided for in the Act

6. Included in Tax Base

Swaziland sourced income.

7. Year of Assessment

The year of assessment for individuals covers a period of twelve months commencing on 1 July of a specific year and ends on the last day of June the ensuing year.

8. Computation of Taxable Income

8.1 Exemptions (do not only indicate the heading, but provide a brief explanation)

8.1.1 Partial exemptions (amounts exempt irrespective of the identity of the recipient):

In addition to exemptions that apply to companies the following applies to individuals

The value of any free medical attention or any allowance, or reimbursement of, an employees medical expenses where the free medical, allowance or reimbursement is available to all non-casual employees on equal terms. Medical aid contributions paid by the employer on behalf of the employee to a recognized benefit fund (s 7(f)(i)).
The value of any free passage by rail, road, steamer or air provided for an employee or the holder of an office or appointment:

- at the commencement of such employment if the duration of such employment is two years or more or where it is less than two years, if such employment is not subject to renewal (s 7(f)(ii)); and

- on the termination of such employment where the employee or holder of an office or appointment permanently returns to his place of recruitment (s 7(f)(iii)).

The value of any meal or refreshment provided in a canteen, cafeteria, or dining room operated by, or on behalf of, an employer solely for the benefit of employees and which is available to all non-casual employees on equal terms.
The value of any transportation of an employees children provided by the employer solely for the benefit of employees and which is available to all non-casual employees on equal terms.
A benefit the value of which (after taking into account the frequency with which similar benefits are provided by the employer) is so small as to make accounting for it unreasonable or administratively impracticable.
Any casual loans not exceeding in aggregate E3 000 at one time during the year of assessment.
the income of any person entitled to privileges under the Diplomatic Privileges Act to the extent provided in such Act;
the first E2 000 of the total amount of dividends received by or accrued to or in favour of an individual from a company or companies;
amounts received by or accrued to a person which are proved to be bona fide bursaries granted to enable or assist such person to study at a recognized educational or research institution. To qualify for the exemption the amount must be paid in order to assist or enable to study;
the first E60 000 of a lump sum amount paid to an employee upon or because of termination or impending termination of the employees services due to

(i). the employer having ceased carrying on the business in respect of which the employee was employed; or

(ii). The employee having become redundant in consequence of the employer having effected a general reduction in personnel or a reduction in personnel of a particular class.

Fifty per cent of the total amount paid by an employer during any year of assessment directly or indirectly to any approved bursary scheme for the benefit or educational assistance of the children of the employee. (s7(f)(iv))

8.1.2 Absolute exemptions (taxpayers enjoying completed exemption from tax on income)

The Order provides for the exemption from income tax

the salaries and emoluments of any person in respect of services rendered to the Government of any country other than Swaziland if that person is not ordinarily resident in Swaziland or is ordinarily resident solely for the purpose of performing such services;
war pensions or gratuities;
Dividends received by or accrued to or in favour of

- any person not ordinarily resident or carrying on business in Swaziland; and

- the estate of any deceased person who at the date of his death was not ordinarily resident or carrying on business in Swaziland, if, but for this exemption, such estate would have been liable for income tax in respect of such dividend;

Any interest received by or accrued to any person neither ordinarily resident nor carrying on business in Swaziland from stock or securities issued by the Government or any local authority in Swaziland, or any parastatal or statutory corporation (s 12(1)(h)).
Any interest received by or accruing to any person not ordinarily resident in Swaziland from any loan made to the Ngwenyama in trust for the Swazi Nation (s 12(1)(i)).
Any interest and other charges on any loan which the Government has in terms of written undertaking exempted or undertaken to exempt from tax to the extent specified in such undertaking (s 12(1)(r)).
Any amount (other than actual salary) received by or accrued to a public servant which the Government has undertaken shall be exempt from normal tax by the term of its written agreement with such servant (s 12(1)(l)).
Any amount received by or accrued to any person in respect of services rendered in Swaziland which the Government has undertaken shall be exempt from normal tax by the terms of its written agreement with the government of another state or with an international or world organisation or body (s 12(1)(m)).

Any amount payable as severance allowance or notice pay under the Employment Act (s 12(1)(j)(iii)).

8.2 Deductions and recoupments

8.2.1 Allowable deductions

In addition to the deductions allowable for corporation the individual can claim the following deductions

Contribution to a pension fund (s 14(1)(i));

the section provides for a deduction to a person in respect of current contributions to a pension fund as defined in section 2 of the Order.

The contributions must be

- current contributions no deductions may be allowed on arrear contributions; and

- contributions to the fund should be a condition of holding of appointment, office or employment.

There is no limitation to the deductions allowable in respect of contributions to a pension fund established by law. A pension fund established by a private employer for the benefit of employees must be approved by the Commissioner in which case the deduction allowed in respect of such contributions is limited to E1 750.

Retirement annuity funds (s 14(1)(j);

Contributions to a retirement annuity fund will be allowed as a deduction and are limitedto15% of the taxable income in respect of trade carried on by such person and/or any other earned income. However,where such person also makes contributions to a pension fund then the 15% allowed as a deduction shall be reduced by the person contributions.

8.2.2 Valuation of inventory/trading stock

Same as for corporate entities.

8.2.3 Reserves and provisions

Same as corporate entities.

8.2.4 Non-deductible expenses

In addition to expenditure not deductible by corporate entities the following prohibition exists on deductions claimed by individuals.

Private maintenance and domestic expenditure (s15(a) and (b))

- No deduction is allowed for the cost in incurred in the maintenance of the taxpayer, his family or establishment; and

- Domestic or private expenses, including the rent of or cost of repairs of or expenses in connection with any premises not occupied for the purposes of trade or any dwelling home or domestic premises except in respect of such part as may be occupied for the purpose of trade.

These two deductions are specifically prohibited to prevent a taxpayer from deducting private and domestic expenditure such as cost of running a private motor vehicle, and repairs to dwelling. However, s 15 (g) (ii) does make provision for the deduction of expenditure incurred in respect of any portion of a private dwelling occupied exclusively and regularly for the purpose of trade.

8.2.5 Recoupments

Same as corporate entities.

8.3 Depreciable regime

8.3.1 Tangibles (movable and immovable assets, for example plant and machinery)

Same as corporate entities.

8.3.2 Intangibles/incorporeals (for example, copyright, patents, goodwill and other intellectual rights)

8.4 Treatment of losses

Same as corporate entities, save that in the case of individuals the losses may be carried forward even if he did not carry any trade in that year of assessment.

9. Foreign Exchange Losses and Gains

Same as corporate entities.

10. Rates

TAX RATES

PERSONS (OTHER THAN COMPANIES)

Taxable income E Rates of Tax

0 - 60 000 0 + 20% of the excess over 0

60 000 - 80 000 12 000 + 25% of the excess over60 000

80 000 - 100 000 17 000 + 30% of the excess over 80 000

100 000 23 000+ 33% of the excess over 100 000

11. Rebates/Tax Threshold

Rebate: in the case of persons other companies the tax payable is reduced by an amount equal to 10% of the amount paid in respect of:

(a) the premium paid by a person during the year of assessment upon a policy under which that person, the spouse or child of that person is insured against death, accident or sickness;

(b) the fee or subscription paid by a person during the year of assessment to a provident fund or benefit fund;

(c) the contribution made by a person during the year of assessment as an employee to a fund established under any law relating to unemployment insurance fund.

Tax threshold for persons other than companies E36 000

12. Fringe Benefit Taxes (Benefits Flowing from an Employer-Employee or an Office Relationship)

Any benefit or advantage accruing by way of employment is part of gross income, in terms of s 7(f) the Order. The Second Schedule to the Order makes it compulsory for employers to deduct PAYE on such benefits in kind bestowed on employees.

A benefit provided by an employer to an employee means a benefit that –

(a) is provided by an employer, by an associate of the employer, or by a third party under an arrangement with the employer or associate of the employer; and

(b) is provided to an employee or to an associate of the employee.

Taxable Benefits

Free and Subsidised Housing

Where a benefit provided by employer to an employee consists of accommodation or housing, and

(a) the employer does not own the accommodation or housing, the value of the benefit is the rent paid for the accommodation or housing.

The amounts to be included in taxable income are as follows:

2002/2003 20% of benefit value

2003/2004 40% of benefit value

2004/2005 60% of benefit value

2005/2006 80% of benefit value

2006/2007 1000% of benefit value

reduced by any payment made by the employee for the benefit.

(b) the employer owns the accommodation or housing, the value of the benefit is the rental benefit value of the accommodation or housing determined in accordance with the following formula –

(A - B) x C x D

100 12

Where –

A = the remuneration for the previous year of assessment; or if not available the current remuneration.

B = an abatement equal to E20 000

C = 18 where the accommodation or housing is situated in Manzini and Mbabane corridor, but

= 12 if such accommodation or housing is situated in an agricultural estate

and other towns

= 10 if the institutionalised housing is situated along the Manzini/Mbabane

corridor; and

= 5 in respect of housing not covered above.

D = the number of months in the year of assessment during which the

employee was entitled to occupation of the accommodation or house.

(d) The amounts to be included in taxable income are follows-

2002/2003 20% of benefit value

2003/2004 40% of benefit value

2004/2005 60% of benefit value

2005/2006 80% of benefit value

2006/2007 100% of benefit value

reduced by any payment made be the employee for the benefit.

(e) In this paragraph, “institutional housing” means housing provided by the Swaziland Government or a parastatal or provided by another body for an employee of the Government or of a parastatal.

Private use of motor vehicles (including any aircraft)

Where a benefit provided by an employer to an employee consists of the use, or availability for use, of a motor vehicle (including any aircraft or helicopter) wholly or in partly for the private purposes of the employee, the value of the benefit is calculated according to the following formula –

(X x A x B/C) – D

Where,

X in the year of assessment 2002/2003 equals 12%

in the year of assessment 2003/2004 equals 14%

in the year of assessment 2004/2005 equals 16%

in the year of assessment 2005/2006 equals 18%

in the year of assessment 2006/2007 equals 20%

A. is the market value of the motor vehicle at the time when it was first provided for the private use of the employee;

B. is the number of days in the year of assessment on which the motor vehicle was used or available for use for private purposes by the employee for all or a part of the day;

C. is the number of days in the year of assessment;

D. is any payment made by the employee for the benefit.

The market value of the car is the cost of the employer at the time it was first provided to the employee. The market value of second-hand cars is shown in the Auto Dealer’s Guide. For vehicles that were purchased in Swaziland this value may be adjusted to 110/114(96.5%) of the Guide value, depending on the rate of sales tax in force in Swaziland at the time the vehicles was purchased.

Where an employee is provided with more than one vehicle, taxable benefits will be evaluated on an individual basis.

Where an employee purchases a vehicle with assistance from the employer as part of the benefit or advantage accruing by way of employment, the fixed allowance give towards the fixed capital and running costs of the vehicle are taxable in full.

Provided that if the Commissioner is satisfied that the circumstances warrant a variation of the basis provided for above, he may issue a directive to such employer that the following basis be used in the determination of the annual benefit value of benefits attributable to such an employee:

Where an employee uses a personal vehicles on employer’s business, the annual value of benefits attributable to such an employee for use of the vehicle for private purposes will be 30% of the fixed allowance received from the employer.

This rule will only apply if:

(a) the employee is, in terms of the written contract of employment, required to have such a vehicle for the performance of his duties;

(b) the size and type of vehicle relates to the duties to be performed in terms of the written contract of employment;

(c) the employee is, in terms of the contract of employment, required to provide the employer with such details and evidence which would reasonably, in the circumstances, be expected of him as to the actual expenditure incurred in respect of fixed capital and running costs;

(d) the employee uses the vehicle mainly for the business of the employer; and

(e) the annual allowance is not greater than 30% of the cost of the vehicle.

The employer shall, apply for the directive at the commencement of any year of assessment providing sufficient motivation as to why the rule in paragraph above should be varied in respect of any employee or particular class of employees.

For the purposes of this paragraph, “fixed capital costs” means the costs of the vehicles, as quoted by the manufacturer, and include additions and accessories such as air-conditioning, radio-type, burglar alarm, as well as licensing and insurance costs, both initial and recurrent.

Provision of domestic assistants

Where a benefit provided by an employer to an employee consists of the provision of a housekeeper, chauffeur, gardener, or other domestic assistant, the value of the benefit is the remuneration paid to the domestic assistant in respect of the services rendered to the employee, reduced by any payment made by the employee for the benefit.

The amounts to be included in taxable income are as follows:

2002/2003 20% of benefit value

2003/2004 40% of benefit value

2004/2005 60% of benefit value

2005/2006 80% of benefit value

2006/2007 100% of benefit value

It is expected that the value of this benefit will not be less than the mi i inimum wages as set out in the Wages Act 16 of 1964.

Utilities

Where a benefit provided by an employer to an employee consists of the reimbursement of discharge by an employer of an employee’s utilities expenditure, the value of the benefit is the amount of the reimbursement or discharge, if separately metered.

The amounts to be included in taxable income when separately metered are as follows-

2002/2003 20% of cost of utility

2003/2004 40% of cost of utility

2004/2005 60% of cost of utility

2005/2006 80% of cost of utility

2006/2007 100% of cost of utility

Where utilities are not metered and paid separately, 10% of the housing benefit value for each service.

“Utilities expenditure” means ay expenditure for fuel power, water, sewerage, or telephone in respect of an employee’s place of residence.

Children’s educational benefits

The taxable value of educational benefits is 100% of the costs of these benefits.

Educational benefits are school fees, boarding fees and other educational expenses paid by the employer on account of the education of the employee’s children.

Soft loans

A taxable benefit accrues to an employee where –

a. loan is granted to an employee and either the employee pays no interest on the loan or pays interest at less than the official rate of interest;

b. an employer has paid a subsidy in respect of capital or interest on a loan; or

c. an employer pays a lender a subsidy in respect of a loan to an employee.

For the purposes of subparagraph (a), the value of the taxable benefit for a year of assessment is the interest on the loan at official rate less the amount of interest (if any) that the employee actually incurred during the year of assessment; and

For the purposes of subparagraphs (b) and (c), the basis of determining the taxable benefit should be based on the redemption amount, that is, the difference between the redemption amount paid by the employee and the redemption amount that would have been payable if the interest rate was the official rate of interest.

The amounts to be included in taxable income are as follows -

2002/2003 20% of benefit value

2003/2004 40% of benefit value

2004/2005 60% of benefit value

2005/2006 80% of benefit value

2006/2007 100% of benefit value

In terms of Legal Notice No. 106 of 1996, the official rate of interest is the Central Bank Discount Rate.

Debt waivers

Where a benefit provided by an employer to an employee consists of the waiver by an employer of an obligation of the employee to pay or to repay an amount owing to the employer or to any other person, the value of the benefit is the amount of the payment or repayment waived.

Property transfers

Where a benefit provided by an employer consists of the transfer or use of property or the provision of services, the value of the benefit is the market value of the benefit, reduced by any payment made by the employee for the benefit.

Miscellaneous benefits

The value of any benefit provided by an employer to an employee, which is not specifically covered, is the actual cost of the benefit, reduced by a payment made by the employee for the benefit.

13. Allowances

Any amount paid by an employer to an employee as an allowance falls into gross income if paid as remuneration for services rendered or in connection therewith. Such allowances are income in the hands of the employee as they form part of what the employee is paid for the service

However, where an allowance or advance is paid by the employer to an employee in respect of expenses of travelling, entertainment or other service, as is not actually expended for official purposes, will fall into gross income.

14. Treatment of Pension, Provident or Retirement Annuity Fund Income

Payments from Pension Fund

Section 12(1)(j)(i) exempts from normal tax any amount received by or accrued to an employee on bona fide termination of employment in respect of commutation of a pension payable from a pension fund.

On Retirement:

1) A commutation of a pension paid to an employee is exempt from tax. This exemption, however, must be read with the provisions of section 2 (as regards the definition of a pension fund). Commutation of a pension, to be free of taxation, must not represent more than one-third of the total value of annuity to which any employee becomes entitled. That is, only one-third of the total value of an annuity may be commuted for a single payment.

2) Where any amount commuted is in excess of one third of the total value of the pension payable as a lump sum, will fall into gross income and will be taxed under section 7(c) of the Order.

3) Where the annual amount of such annuity or pension payments do not, in total exceed E720, then such payments are also exempt from normal tax in terms of the law.

Withdrawal

i) In terms of section 7(h) of the Order an employee who withdraws from a pension fund and receives back his own contributions will not be taxed on such refunds.

ii) If the amount repaid to the member includes employer’s contributions and interest. The refund of employer contributions and interest on all contributions are taxable in terms of section 7(c) of the Order.

Payments from Provident Funds (s 12(1)(j)(ii))

i) Any amount received by or accrued to an employee on bona fide termination of employment in respect of amounts due from a provident fund is exempt in from tax.

ii) Where it is established that there is no bona fide termination of employment, then the tax treatment will be as follows -

- the refund of employee’s contribution is exempt from tax.

- refund of employer’s contributions and interest on all contributions are taxable.

Benefit Fund (s 12(1)(j)(ii))

Any amount repaid to a contributor to a benefit fund on bona fide termination of employment is also exempt from taxation on such repayment. Where there is no bona fide termination then

- the refund of employee’s contribution is exempt from tax.

- refund of employer’s contributions and interest on all contributions are taxable

Retirement annuity fund (s 12(1)(k))

Any amount received in commutation of a retirement annuity is exempt from tax.

Death Claims

1. Amounts paid to dependants from Pension and Provident Funds: if paid as a result of a nomination (i.e. the deceased, prior to his death, has in writing, specifically mentioned a person/persons who are to receive the benefits due under the Agreement) made by the deceased, in terms of the Fund Rules, will be taxable in the hands of the recipients.

2. If such payments are made under the discretionary powers of the trustees (i.e. nomination is made by the deceased taxpayer, but the trustees decide to make an ex-gratia payment to the dependants on the grounds of sympathy or other equitable cause), the beneficiaries will not be taxed on such benefits.

Disability Claim

All payments made in this category are taxable in the hands of the recipients.

15. Treatment of Professional Income

No special treatment, forms part of gross income

16. Treatment of Investment Income

No special treatment, part of gross income

17. Withholding Taxes

Non-resident shareholders’ tax (NRST)(s 21)

Non-resident’ tax on interest (NRTI)(s 27)

Tax is payable at the rate of 10%. Non-resident tax on interest is payable within 14 days of the date of accrual of the interest. This is a final tax.

Entertainers and sportsmen (s 32A)

Royalties and Management Fees (s 32B)

Non-resident Contractors (s 59)

Swaziland source services contract (s 59A)

A “Swaziland source service contract” means a contract (other than an employment contract) –

(c) Under which the principal purpose of the contract is the performance of services which give rise to Swaziland-source income; and

(d) Where any goods supplied under the contract are only incidental to that purpose.

18. Beneficiary of Revenue

Swaziland government.

D. Income Tax on Non-Residents (National Government)

1. Name of Tax and Levied in Terms of Which Act (Name, Number and Year

Income Tax, The Income Tax Order, 21 of 1975, as amended

2. Department Responsible for Administration

The Department of Taxes

3. Included in Tax Base

Swaziland sourced income

4. If Sourced-Based, Define (If Not Already Done)

4.1 Actual source

- the originating cause of the income (what give rise to the income); and

- the location of that originating cause – being the source of income.

4.2 Deemed source: