Telephone: (670)3310059 / 60
Taxes Help Pay
For Development of Timor Leste
&
The Welfare of OUR Community
Wage Income Tax
Taxes and Duties Act 2008
General Series Tax Information BR1 - 07/2008
Effective from: 07/2008
This brochure tells taxpayers about Wage In-come Tax. The brochure explains how this tax type is administered by the National Director-ate of Domestic Revenue (NDDR). This bro-chure will direct you to other information guides for more detailed information, if re-quired.
Phone: (670) 3310059 / 60
Website: http://www.mof.gov.tl/taxation
Dili District Office: Av. Pres. Nicolao Lobato - Receitas e Alfândegas Edeficio - Dili
Baucau District Office, Villanova St, Kota Baru, Baucau
Maliana District Office, Holsa St. Maliana
NATIONAL DIRECTORATE OF DOMESTIC REVENUE
verifying wages paid to employees, wage income taxdeducted and Wage Income Tax paid.
You must keep these records for 5 years after the cal-endar year in which the wages were paid to the em-ployees and the Wage Income Tax was deducted and paid to the NDDR.
Further Information
Further information is available from:
Dili District Office: Av. Pres. Nicolao Lobato - Receitas e Alfândegas Edeficio - Dili, Telephone (670) 331 0059 / 60
Baucau District Office: Vilanova St., Baucau, and; Maliana District Office: Holsa St., Maliana.
In addition, full copies of rulings, guides and other information may be downloaded from the MOF Web-site: www.mof.gov.tl/taxation
The NDDR Provides All Tax Information and Tax
Forms Free of Charge to the Public
TAXES
Help Fund Development
Help Fund Infrastructure
HELP OUR COMMUNITY
Taxes Pay For Development of OUR Community
—
Roads
—
Bridges
—
Schools
—
Health Centers
—
Water & Electricity
—
Government Services
What is Wage Income Tax?
Wage Income Tax is a tax on the wages of employees from their employment in Timor Leste.
Who deducts Wage Income Tax?
Wage Income Tax is deducted by the employer from the wages paid to their employees.
What payments are Wages for Tax Purposes?
“wages” means any reward for services provided by an
employer to an employee, including:
any salary provided to the employee, including leave pay, overtime payments, commissions, or bonuses;
director’s fees and other remuneration arising from
the holding of an office;
the value of gifts provided by an employer to an em-ployee;
any allowance provided by the employer for the benefit of an employee;
any payment provided by the employer in respect of loss or termination of employment;
any payments however described made on termina-tion of employment in respect of entitlements out-standing at the time of termination;
the reimbursement or discharge by an employer of any expense of the employee, including utilities or medical expenses;
the amount of any waiver where any employer waives an obligation of the employee to pay an amount owing to the employer; and
non-wage benefits greater than $20 provided in a calendar month to an employee.
(This list is not exhaustive if you have any questions about payments subject to Wage Income Tax contact your nearest NDDR office)
Wage Income Tax
Who is responsible for providing information to employ-ees?
Employers are responsible for providing information about wage income tax deducted from employee wages. Employees should request this information from their employer at the end of each tax year if required or upon termination of employment.
How much Wage Income Tax is deducted?
Timor Leste residents and non-residents pay the follow-ing Wage Income Tax rates per month:
Employees are no longer entitled to a monthly tax credit of $10.00.
For more information about calculating wage income tax to be withheld, ask your local NDDR Office for a copy of Tax Guide G02 on Wage Income Tax
Who is a resident of Timor Leste?
A natural person who is present in Timor Leste for more that 182 days is a resident of Timor Leste unless the
person’s permanent place of abode is not in Timor
-Leste.
How often should Wage Income Tax be paid?
Wage Income Tax is paid monthly.
The tax is to be paid by the 15th day of the month after
the month in which the Wage Income Tax was deducted
from employees wages. For example, wage tax de-ducted in the month of January will be paid, on the January monthly taxes form, no later than the 15th
February.
How do You pay Wage Income Tax to the NDDR?
Employers are required to complete three (3) copies of the Consolidated Monthly Taxes Form and to de-liver the forms and the deducted Wage Income Tax (and any other tax payments) to a branch of the Banco Nacional Ultramarino (BNU) .
How do You get Monthly Tax Forms from the NDDR?
Consolidated Monthly Taxes Forms are available from the NDDR offices in Dili, Baucau and Maliana. They are also located on the MOF website at:
www.mof.gov.tl/taxation
Why do you need to reconcile Wage Income Tax at the end of each tax year?
Employers are required to complete a Wages Income Tax Withholding Information Form after the end of the tax year. This form details Gross Wages paid, Total Wage Income Tax Deducted and Total Wage Income Tax paid to the NDDR for the tax year.
This form is issued at the same time as the Annual In-come Tax Form.
What will happen if You don’t deduct Wage Income
Tax?
If you are an employer and do not deduct Wage
In-come Tax from your employee’s wages as required, you
may incur penalties and be prosecuted in court. Also, if you are a business, you will not be entitled to claim an expenditure deduction for wages paid in your annual Income Tax Form for the tax year.
What Wage income records do You need to keep?
All employers are required to keep adequate records
Wage Income Tax Rates
(Per Month)
Residents of Timor Leste Tax Rate
$0.00 to $500.00 0%
Each dollar above $500.00 10% Non Residents Tax Rate
Fixed rate for whole of salary 10%
