Tax incentives in Lesotho

  • 0% corporate tax on manufacturing profit generated from exporting manufactured goods outside of the Southern African Customs Union (SACU)
  • A maximum manufacturing corporate tax rate of 10% on profits for intra-SACU trade
  • No withholding tax on dividends distributed by manufacturing firms to local or foreign shareholders
  • No advanced corporation taxes are paid by companies on the distribution of manufacturing profits
  • Training costs are allowable at 125% for tax purposes.
  • Payments made in respect of external management skills and royalties related to manufacturing operations are subject to withholding tax of 10%
  • Easy repatriation of manufacturing profits
  • A VAT rate of 14% (ensuring harmonization with the RSA). Furthermore, the Lesotho Revenue Authority has introduced flexible VAT payment systems, to tax compliant firms, to ease cash flows.

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