Computers, mobile phones and internet use form a vital part of the daily activities of businesses, schools and individuals. The Guyana Revenue Authority (GRA) finds it necessary to advise the general public on its Value Added Tax policy regarding computers, computer accessories, mobile phones and internet services. This policy therefore, forms the guiding principle as it relates to zero-rated items, which may be used within the Information Technology Sector.
Pursuant to Schedule I, Paragraph 17 of the VAT Act Chapter 81:05, a supply of the following items is zero-rated:
(a) a supply of computers, including internal hardware devices, computer accessories, notebooks, tablets and laptops;
(b) a supply of computer monitors (of a kind designed solely to be used with computers and excluding video monitors, television monitors and dual-purpose monitors);
(c) a supply of routers, switches and hubs for networking computers;
(d) a supply of computer printer including multi-function printers; and
(e) a supply toner cartridges and ink cartridges for computer printers.1
Additionally, Schedule 1 Paragraph 18 of the VAT Act, Chapter 81:05, zero-rates a supply of internet data for residential and individual usage. Therefore, customers who pay for any of the aforementioned products or services or utilize internet data for residential and individual purposes will not be required to pay VAT at the standard rate of fourteen percent (14%).
In principle, VAT is not paid on the above items. Pursuant to Section 35 (5) of the Act, registered businesses which conduct activities with more than fifty percent (50%) zero-rated items can make monthly claims for a refund of VAT paid on expenses (inputs) which are directly related to the sale of the computers and computer accessories, mobile phones and internet services.
Further, Schedule II Paragraph 16 states that, “Exempt for the purposes of Section 18 are supplies of mobile phones.” This therefore means that there is no payment of VAT on importation or sale of mobile phones irrespective of the brand.
On the other hand, services such as computer repairs provided by VAT registrants are taxable at the standard rate of fourteen percent (14%).
Where a taxable person reports an excess described in subsection (1)(a) for a taxable period, the person may file with the Commissioner a claim for refund for the excess credits attributable to the zero-rated supplies in the form and with the documentation specified in regulations.
Source: gov.gy
