BR 1 Wage Income Tax Eng Oct 2011

Taxes Pay For Development of OUR Community—Roads—Bridges—Schools—Health Centers—Water & Electricity—Government Services

The NDDR Provides All Tax Information and Tax
Forms Free of Charge to the Public

Ministry of Finance
National Directorate
of Domestic Revenue

verifying wages paid to employees, wage income tax
deducted and Wage Income Tax paid.
You must keep these records for 5 years after the calendar year in which the wages were paid to the employees and the Wage Income Tax was deducted and
paid to the NDDR.

Wage Income Tax
Taxes and Duties Act 2008

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 Website: www.mof.gov.tl/taxation

General Series Tax Information BR1 - 07/2008
Effective from: 07/2008

TAXES
Help Fund Development
Help Fund Infrastructure

HELP OUR COMMUNITY

This brochure tells taxpayers about Wage Income Tax. The brochure explains how this tax
type is administered by the National Directorate of Domestic Revenue (NDDR). This brochure will direct you to other information
guides for more detailed information, if required.

NATIONAL DIRECTORATE OF DOMESTIC REVENUE
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

Phone: (670) 3310059 / 60

Taxes Help Pay
For Development of Timor Leste
&
The Welfare of OUR Community
Telephone: (670)3310059 / 60

Website: http://www.mof.gov.tl/taxation

Taxes Pay For Development of OUR Community—Roads—Bridges—Schools—Health Centers—Water & Electricity—Government Services

Wage Income Tax

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 employee;
 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 termination of employment in respect of entitlements outstanding 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)

Who is responsible for providing information to employees?
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 following Wage Income Tax rates per month:

from employees wages. For example, wage tax deducted 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 deliver the forms and the deducted Wage Income Tax
(and any other tax payments) to a branch of the Banco
Nacional Ultramarino (BNU) .

Wage Income Tax Rates

How do You get Monthly Tax Forms from the NDDR?

(Per Month)

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

Residents of Timor Leste

Tax Rate

$0.00 to $500.00
Each dollar above $500.00
Non Residents
Fixed rate for whole of salary

0%
10%
Tax Rate
10%

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 TimorLeste.
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

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 Income Tax Form.

What will happen if You don’t deduct Wage Income
Tax?
If you are an employer and do not deduct Wage Income 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