Personal Income Tax in Sao Tome and Principe
Sao Tome and Principe operates a progressive personal income tax (PIT) system known as the Imposto sobre o Rendimento das Pessoas Singulares (IRS). It features six tax brackets with rates ranging from 0% to 25%, with a personal allowance of Db 120,000.
Tax Residency
An individual is considered a tax resident of Sao Tome and Principe if they meet any of the following criteria:
- Spend more than 183 days in Sao Tome and Principe in a calendar year
- Have their primary place of abode in Sao Tome and Principe
- Have their center of vital interests (economic and personal) in Sao Tome and Principe
Resident individuals are taxed on their worldwide income. Non-residents are taxed only on Sao Tome and Principe-source income.
Personal Income Tax Rates (2026)
Sao Tome and Principe uses a progressive tax rate structure for personal income. The rates are applied to annual taxable income after the personal allowance:
| Annual Taxable Income (STN) | Tax Rate |
|---|---|
| 0 – 120,000 | 0% |
| 120,001 – 240,000 | 5% |
| 240,001 – 480,000 | 10% |
| 480,001 – 720,000 | 15% |
| 720,001 – 960,000 | 20% |
| Above 960,000 | 25% |
Personal Allowance
All resident individuals are entitled to a personal allowance of Db 120,000 per year. This means the first Db 120,000 of annual income is tax-free. The allowance is applied automatically by employers through the PAYE system.
Deductions and Allowances
Standard Deductions
- Social Security Contributions: Employee contributions to INSS are fully deductible
- Health Insurance: Premiums for approved health insurance plans
- Charitable Donations: To approved organizations, up to a percentage of taxable income
- Education Expenses: School and university fees for dependents
Family Allowances
- Married Couple: Joint filing is available for married couples
- Child Allowance: Allowance per dependent child
- Dependent Relatives: Allowance for caring for elderly or disabled relatives
Employment Income
Employment income includes salaries, wages, bonuses, commissions, and benefits in kind. Employers are required to withhold IRS from employee salaries and remit it to the tax authorities monthly.
Self-Employment and Business Income
Self-employed individuals and sole proprietors are taxed on their net business income at progressive IRS rates. Expenses directly related to the business activity are deductible.
Filing Requirements
- Annual Tax Return: Due by June 30 of the following year
- PAYE Returns: Monthly, by the 15th of the following month
- Estimated Tax Payments: For self-employed individuals, quarterly installments
Penalties
- Late filing: 10% of tax due, plus interest per month of delay
- Late payment: 0.5% per month of delay
- Understatement: 25% of understated tax
- Fraud: Up to 100% of tax evaded, plus criminal prosecution