Fourth Schedule, The Income Tax Act, 2000

CHARGEABLE I NCOME OF COMPANY CARRYING ON I NSURANCE BUSINESS IN S IERRA LEONE 1. Insurance companies (other than life insurance companies) In the case of an insurance company, whether mutual or proprietary (other than a life insurance company), where the gains or profits accrue in part outside Sierra Leone, the gains or profits on which tax is payable shall be ascertained by taking the gross premiums and interest and other income received or receivable in Sierra Leone (less any premiums returned to the insured and premiums paid on re-insurances), and deducting from the balance so arrived at a reserve for unexpired risks at the percentage adopted by the company in relation to its operations as a whole for such risks at the end of the period for which the gains or profits are being ascertained (but not in excess of a reasonable reserve as determined by the Commissioner), and adding to it a reserve similarly calculated for unexpired risks outstanding at the commencement of such period, and from the net amount so arrived at, deducting the actual losses (less the amount recovered in respect thereof under re-insurance), the agency expenses in Sierra Leone and a fair proportion of the expenses of the head office of the company. 2. Life insurance companies (1) Subject to subparagraphs (2) and (3), in the case of a life insurance company, whether mutual or proprietary, the gains or profits on which tax is payable shall be the investment income less the management expenses (including commission). (2) Where a life insurance company received premiums outside Sierra Leone, the gains or profits shall be the same proportion of the total investment income of the company as the premiums received in Sierra Leone bore to the total premiums received in Leone bore to the total premiums received after deducting from the amount so arrived at the agency expenses in Sierra Leone and a fair proportion of the expenses of the head office of the Company. (3) In the case of a life insurance company having its head office outside Sierra Leone, the Commissioner may substitute some basis other than that prescribed in subparagraph (1) or (2) for the purpose of ascertaining the portion of the income from investments to be so charged as being gains or profits on which tax is payable. 3. Life insurance companies (alternative) (1) Subject to subparagraphs (3) and (6), the income and deductions relating to the life insurance business of a mutual or proprietary life insurance company shall not be taken into account in determining its assessable income; the company shall be assessed to tax at five percent of the insurance premiums received and tax assessed under this paragraph shall be paid by the fifth day of the calendar month following the month in which the payment was received. (2) Where for any period a life insurance company which is a non-resident person, produces the certificate mentioned in subparagraph (3), the profits accruing in Sierra Leone from the life insurance business for such period, shall be a sum bearing the same ratio to the life insurance premiums receivable in Sierra Leone as the ratio for the said period shown by that certificate of the total profits to the total sum of life insurance premiums receivable. (3) The certificate shall he one issued by or on behalf of any income tax authority with regard to which the Commissioner is satisfied that it computes and assess the full profits of the non-resident person from his life insurance business, and shall certify for any accounting period, as regards such business, the ratio of the profits or, where there are no profits, of the loss, as computed [for the purposes of income tax] by that authority, to the total life insurance [words indistinct]. (4) Where any person has been assessed for any year of assessment by reference to subparagraph (1), he shall be entitled to claim at any time within six years after the end of such year of assessment, that his liability to tax for that year be recomputed on the basis provided by subparagraph (2). (5) In the case of a non-resident taxpayer— a) The agent or other representative in Sierra Leone of the taxpayer, or any other person who makes, signs, issues, or sells the insurance policy, shall make a return of the amount of tax due under this Schedule. b) If the return under subparagraph (a) is not made, or if the Commissioner is not satisfied with the return— i. the Commissioner may determine the amount of tax payable; and ii. the agent or other person described in subparagraph (a) may be assessed upon the taxable income and shall be liable to pay the tax assessed. (6) A resident taxpayer shall be entitled to be assessed under the principles of subparagraph (2) as if it were a nonresident taxpayer, if it furnishes to the Commissioner the information necessary for the calculation.