(876) 906-0707,(876) 619-1773
Tax Administration Jamaica (TAJ) wishes to advise that all Large Tourism Operators will be required to begin withholding the 3% Withholding Tax on Specified Services (WTSS) beginning November 1, 2015. This means that Tourism Operators, with a turnover of J$500M or more, must now withhold 3% of the total amount paid for specified services with invoices of $50,000
However, providers of specified services which are compliant with filing and paying their income tax may access the benefits of an Exemption Certificate (EC). This will allow them to collect the full payment from their clients without the 3% WTSS being deducted. To qualify for the EC, the specified service providers must have filed and paid their 2014 income tax in full or have a payment arrangement in place.
Businesses operating in any of the following specified services may apply for an Exemption Certificate at any Tax Office island wide:
Consultancy - professional service by persons who are not acting in the capacity of an employee
Engineering (e.g. Architectural, electrical, mechanical and structural)
Repairs and maintenance – e.g. to equipment and motor vehicles
The rental or leasing of motor vehicles or equipment
Transportation, haulage or tours
The Exemption Certificate may then be presented to the authorized Withholding Tax Agent (WTA) to prevent the 3% income tax being withheld at source. For specified services without an exemption certificate, the WTA will present them with a Withholding Tax Certificate, which they’ll be able to use to claim as a credit when they file their income tax return.
The tax authority has held stakeholder sessions with several stakeholder groups from both the public and private sectors and will continue to roll these sessions out across the island to engage business entities in the various sectors of commerce.
The Withholding Tax on Specified Services, which was implemented on September 1, 2015, requires Government Ministries, Departments and Agencies, as well as entities regulated by the Bank of Jamaica and the Financial Services Commission, utility companies, tourism 3
operators and cable operators with yearly gross revenue, from all sources, of more than Five Hundred Million Dollars ($500,000,000) to withhold the tax. However the implementation of the WTSS was delayed for tourism operators following discussions with the tax authority and
the Ministry of Finance and Planning.
WTSS is a tax compliance mechanism designed to broaden the tax base, thereby increasing revenue collection and improving compliance. WTSS targets persons liable pay to Income Tax but are non-compliant and/or may not be in the tax database.
Source: Tax Administration Of Jamaica
ABTax clients are been reminded that the following obligations are due to be paid on or before September 15, 2015:
· Minimum Business Tax (Final Installment)
· Estimated Income Tax 2015 (Third Quarter)
If Direct Banking Payment facility is used, please submit the Payment Advice as soon as the transaction is finalized with your bank. Payment may also be made via cheque or direct deposits.
Clients that have already paid first installment of the Minimum Business Tax of $30,000 are been reminded that the final installment of $30,000 will be due on September 15, 2015.
Published by Ministry of Finance & Planning
The Environmental Protection Levy (EPL) which took effect on June 1, 2015, required domestic manufacturers to remit returns not later than July 31, 2015. Arising out of a series of consultations with key stakeholders, GOJ has revised the filing of returns by manufacturers by the last working day October, 2015. Consistent with the new Act, domestic manufacturers are being advised to pay careful attention to the conditionalities of the Income Tax Act:
* Pursuant to Part III of the First Schedule of the Income Tax Act:
Persons who are engaged in the transformation of raw materials or intermediate goods into a new or distinct good are manufacturers and must charge the EPL (the EPL must be charged whether or not you are currently registered with Ministry of Industry, Investment and Commerce (MIIC). ·
* All manufacturers are permitted to account for the EPL imposed effective June 1, 2015 on their September quarterly return due on the last working day of October 2015. ·
* Manufacturers who incurred EPL at the ports on productive inputs, which have been used, or are to be used in the manufacturing process, will have the EPL paid, available as a credit when accounting for the tax on their return in October 2015.
* Manufacturers who purchased goods from local manufacturers for use in their production process and paid the EPL are eligible for a credit when accounting for the tax.
The Ministry of Finance and Planning and the Tax Administration of Jamaica's Technical Specialist Unit is committed to the seamless introduction of the Environmental Levy and are open to continuously engaging its stakeholders.
Source: Tax Administration Of Jamaica
With the advent of the legislation relating to the Foreign Account Tax Compliance Act (FATCA), Tax Administration Jamaica (TAJ) is finalising preparations to administer the implementation of the automatic exchange of information. In recent weeks TAJ has been working with Financial Institutions (FI) to register and submit test data, to assess the readiness of the system configured to accommodate the upload and transmission of FATCA reports to the Internal Revenue Service (IRS).
Financial Institutions have since been responding to the invitation to register and to test the format of their FATCA reports by logging onto the TAJ Portal at www.jamaicatax.gov.jm and uploading their test files. So far 49 of 61 financial institutions have registered on TAJ’s Tax Portal, with some participating in the test phase. Contact is being made with the remaining FIs to get them registered. Testing is being extended until August 7, 2015, to accommodate necessary adjustments.
Financial Institutions or their intermediaries are encouraged to contact TAJ during the current registration and testing phase for any guidance on FATCA. Persons may call the Exchange of Information Office (EOI), within the Large Taxpayer Office or email their FATCA questions. Financial iinstitutions are reminded that based on the legislation, they will be required to submit their reports for calendar year 2014 to TAJ by August 31, 2015. This will enable the authority to transmit the data to the IRS by September 30, 2015, in keeping with the IRS requirements. Financial Institutions (FIs) are therefore urged to continue preparing the relevant financial information for submission.
The FIs, such as banking institutions, will be required to upload FATCA reports of US Persons (including US citizens or residents such as green card holders), who hold accounts with them. TAJ in turn will submit the files to the IRS on behalf of the Financial Institutions, in accordance with the Inter-Governmental Agreement.
The FATCA submission process is facilitated through the TAJ’s new Revenue Administration Information System (RAIS) that is accessible through its web portal at www.jamaicatax.gov.jm. The system employs industry standard security practices at the database and communication layers.
Since May 2014 when the agreement was signed by the Jamaican authorities and the US, TAJ, in collaboration with other Government partners, has had several sensitisation sessions and workshops to prepare key stakeholders for the introduction of FATCA. Sessions have been held with entities and persons such as the Jamaica Bankers Association, the Joint Cooperative Credit Union League, the Jamaica Association of Insurance and Financial Advisers, Compliance and Information Technology Officers of major financial institutions, the management of large financial institutions and the Jamaica Institute of Financial Services. In addition TAJ representatives have presented papers at conferences such as the Anti-Money Laundering Conference and, most recently, at the Jamaica Diaspora Conference. TAJ will be continuing its stakeholder engagements on FATCA.
Source: Tax Administration Of Jamaica
Tax Administration Jamaica (TAJ) is reminding companies and individuals in business that their first payment instalment of $30,000 for Minimum Business Tax (MBT) was due on Monday June 15, 2015. It should be noted that a Bill amending provisions relating to the MBT was signed into law on June 11, 2015, that now impacts who is required to pay.
In respect of individuals, the threshold has been increased to five million dollars ($5M), up from the previous three million dollars ($3M). This means that as of June 11, individuals, including partners, carrying out a trade, vocation or profession, or business, whose annual gross revenue is less than $5M are exempt from the MBT. Individuals are reminded that the MBT does not apply to income from salaries or wages. It should also be noted that the provisions for the $5M threshold does NOT apply to companies.
Provisions have also been made for any company incorporated under the Companies Act for not more than twenty-four months to be exempt from paying the Minimum Business Tax.
Amendments have also been made confirming that the MBT is applicable to Co-operative Societies, including Credit Unions. These entities are therefore advised that they are required to pay the MBT.
These and other amended provisions relate to June 11, 2015 and onwards. MBT legislative provisions and payments made prior to June 11 remain in effect for that period. This means payments made prior to the June 11 amendment will not be refunded.
The Minimum Business Tax, which was implemented in April 2014, requires persons operating a business to pay a Minimum Business Tax of $60,000 for the year in two installments on June 15 and September 15. It applies to all companies or other corporate bodies incorporated or registered in Jamaica, including overseas companies conducting business in Jamaica. Companies which are exempted from the payment of Income Tax or operating under an income tax incentive regime are also liable to pay MBT. In addition, companies making a loss, as well as companies that are dormant are also liable to pay the MBT
Source: Source : Tax Administration Of Jamaica