Accounting and Tax Compliance

Our team of professionals consists of highly qualified and experienced accountants, tax experts and auditors that have a thorough understanding of the regulatory environment in East Timor. Enterslice will provide you with a hassle-free experience! Package inclusions: Tax Planning and Advisory Services..

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Overview of Accounting, Auditing and Tax Compliance in East Timor

Southeast Asian country East Timor, also known as the Democratic Republic of Timor-Leste, is a tiny island republic. It is located in the Lesser Sunda Islands and takes up the eastern portion of the island of Timor, together with the enclave of Oecusse. East Timor has a long history, including indigenous civilizations from antiquity, colonial domination, and ultimate independence in the twenty-first century. The mainstay of the nation's economy is agriculture, with coffee serving as a significant export crop. The oil and gas deposits have also aided the nation's economic growth in the Timor Sea.

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Accounting and Auditing Standards in East Timor

In Timor-Leste, formal regulations for how companies should manage their accounting-the way they maintain records of their funds and financial data— have not yet been enacted. Timor-Leste Accounting Standards, as they are known, are being developed by the Ministry of Finance. Based on a set of international standards known as IFRS, these standards will be modified to meet the unique requirements of Timor-Leste, taking into account their existing level of financial and economic development.Portuguese is Timor-Leste's national language. Hence that is the language in which the new accounting rules will be written and disseminated. The accounting standards will also be published in English for easier understanding and accessibility, as English is also a working language in Timor- Leste. All companies in Timor-Leste will be required to adhere to these new Timor-Leste Accounting Standards once they are finalized and become official regulations.

Companies in Timor-Leste are now permitted to use the IFRS Standards as a reference for their accounting procedures. However, there is currently no stock exchange in the whole country. Hence there is no official market where companies can purchase or sell ownership shares.

Types of Taxes in East Timor

  • Corporate Income Tax

Corporate Income tax is levied 10% in East Timor on all companies. CIT on some companies can vary; oil and gas contractors are charged a 30% CIT while there is a 6% CIT on sub-contractors. In East Timor, companies have no municipal or local income taxes.

  • Sales Tax

In Timor-Leste, various goods and services are subject to a tax known as sales tax. This tax is applicable in two primary scenarios. First, when people bring taxable products into Timor-Leste from foreign nations. Second, starting from a particular day determined by Parliament, when taxable commodities are sold, or taxable services are rendered inside Timor-Leste. Individuals or companies that import taxable items, those who sell taxable goods in Timor- Leste, and those who provide taxable services there are all accountable for paying the sales tax. The tax rates change based on the circumstances. The current rate of sales tax in East Timor is 2.5%.

  • Import Duties

A 2.5% tax is added to the products' overall worth when imported into Timor-Leste from foreign countries. This total value comprises the goods' cost, any associated insurance premiums, and transportation (freight) costs. The import duty is computed as 2.5% of this total value, known as the "customs value."

  • Service Tax

Taxpayers must pay the government 5% of their total earnings as services tax if they make more than 500 USD from services like running arestaurant, bar, hotel or telecommunications services. However, the services tax would not be applicable if their revenues from these services did not reach 500 USD.

  • Excise Tax

Depending on the kind of products being taxed, the excise tax is imposed at specific percentage rates or in particular units. The cost of the items serves as the foundational value for computing the excise tax. Excise tax rates or fixed amounts vary for various things. This tax increases the price of the items. For instance, whereas some items, like cigarettes, may be subject to a fixed excise tax per unit, others, like alcohol, may be subject to an excise tax based on a percentage of the cost.

Which taxes are not imposed in East Timor?

East Timor has no stamp duty, transfer tax, value-added tax, or property tax.

Services offered by Enterslice

Tax Compliance Services

  • Enterslice provides a wide variety of tax compliance services to make sure that our clients are aware of tax laws and maintain complete compliance.
  • Enterslice provides a wide range of services, such as answering tax-related questions, assessing transactions for potential tax ramifications, and creating tax-effective structures.
  • Enterslice also spot chances for tax optimization and gives frequent updates on tax-related issues.
  • From tax registration to managing tax debt computation and tax filings and satisfying all relevant tax reporting obligations, we offer end-to-end solutions for all facets of a company's tax compliance.
  • In order to ensure that tax regulations are strictly followed, our devoted team responds to enquiries from tax authorities and helps with effective communication.
  • At Enterslice, we place a high priority on quality improvement, strategic value creation, cost containment, and risk mitigation.
  • Our professionals assist businesses in negotiating regulatory changes, transforming data into useful insights, and expediting compliance and planning operations. They also promote smooth cooperation among tax, financial, and legal departments.
  • Enterslice also offer services to keep clients up-to-date on tax laws that are always changing.
  • Our experts create strategies to reduce tax liabilities while guaranteeing complete compliance, providing specialized solutions and critical Guidance for managing tax disputes.
  • Enterslice help businesses determine whether they qualify for tax credits and deductions connected to research and development (R&D) operations, enabling customers to maximize R&D tax advantages while abiding by the rules.
  • Including duty disadvantages, free zone businesses, duty deferral and suspension programmes, client risk evaluations, and post-clearance audit management, Enterslice offers thorough advice on excise and customs issues.
  • Enterslice also helps with requests for authorized economic operators, supply chain management, market access rules, labelling specifications, and anti-dumping defence.
  • Value Added Tax (VAT)-related concerns are covered in great detail by our consultation services.
  • Enterslice assists and guides during VAT audits or disputes, conducts VAT health checks to verify compliance, and offers Guidance on VAT refunds. We also help with VAT compliance and return submissions.
  • Enterslice also advises in complex cross-border transactions taking into account the tax implication.
  • Enterslice proactively manages tax issues and potential problems that might occur during the mergers and acquisitions process, helping the clients achieve seamless execution.

Accounting and Auditing Services

Enterslice offers a wide variety of expert accounting services designed to provide our valued clients with total assistance. We provide the following services by using our extensive experience:

  • Ensuring sure that accounting records are correct and adhere to applicable requirements.
  • Providing thorough financial data to offer an overall picture of business success.
  • Tracking corporate costs and looking into possible financial irregularities.
  • Improving accessibility by replacing antiquated computerized or paper-based accounting techniques with cloud-based technologies.
  • Creating cash flow statements, budgets, and estimates on a monthly basis to aid in making well-informed decisions.
  • Aiding in making yearly statutory financial statements and ensuring all filing requirements are met.
  • We facilitate accessible communication with auditors throughout the audit process, simplifying the company's financial data
  • We are offering treasury and payment processing expertise to streamline corporate processes.
  • Examining cost claims and payment requests to evaluate their accounting, tax, and control aspects.
  • Assisting with the setup of accounting systems, including the creation of custom reports, the administration of master data, and the chart of accounts.
  • Establish strict accounting guidelines and control methods for the accounting divisions of our customers.
  • We are conducting account viability evaluations and making expansion suggestions.

Frequently Asked Questions

The Ministry of Finance is currently developing the Timor-Leste Accounting Standards. These will be based on IFRS standards and modified to suit Timor-Leste's unique requirements.

The accounting standards will be published in Portuguese, the national language of Timor-Leste, and English for better understanding and accessibility.

East Timor imposes various taxes such as Corporate Income Tax, Sales Tax, Import Duties, Service Tax, and Excise Tax.

Yes, East Timor has no stamp duty, transfer tax, value-added tax, or property tax.

Enterslice provides various services, including answering tax-related questions, assessing transactions for potential tax ramifications, creating tax-effective structures, and offering end-to-end solutions for a company's tax compliance.

Enterslice offers various accounting services, such as ensuring accurate accounting records, tracking corporate costs, improving accessibility with cloud-based technologies, creating cash flow statements, facilitating communication with auditors, and setting up accounting systems.

Enterslice offers detailed consultations on VAT-related issues, assistance during VAT audits or disputes, conducts VAT health checks, provides Guidance on VAT refunds, and helps with VAT compliance and return submissions.

Enterslice proactively manages tax issues and potential problems that might occur during the mergers and acquisitions process, helping the clients achieve seamless execution.

Yes, Enterslice offers advice in complex cross-border transactions, taking into account the tax implications.

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