TAXATION BULLETIN JAMAICA TAX UPDATE 2014
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CONTENTS 1 – Introduction of Employment Tax Credit (ETC) 2 – One-Stop Business Registration Super Form 3 – INCOME TAX RATES 2002-2014 4 – Flat tax for the Public Transport System 5 – Single Tax Payment Form to Be Introduced for Self-employed Persons 6 – IMPORTANT TAX DATES
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1 – INTRODUCTION OF EMPLOYMENT TAX CREDIT (ETC)
TAXATION BULLETIN-JANUARY 2014
Effective January 1, 2014 unregulated companies and self-employed individuals, engaged in a trade, vocation or profession, will be entitled to claim a non-refundable Employment Tax Credit (ETC) when computing their net income tax liability. However to qualify for the credit, the eligible persons will have to file and pay their monthly payroll statutory deductions on time. The amount of ETC which may be claimed in respect of each year of assessment will be equivalent to the total amount of payroll deductions and contributions for Education Tax, NHT, NIS and HEART, which have both been declared and paid on time for employees during that year. Eligible persons are therefore encouraged to file and pay their monthly payroll deductions (S01) on a timely basis in order to benefit when filing their final income tax return. However, it should be noted that the ETC will be restricted to 30% of the tax chargeable on the company’s or trader’s income. Additionally the ETC may not be claimed against any income tax chargeable on non-trading income, such as interest and dividend income. Such income will continue to be liable to tax at 25%. The Employment Tax Credit is being introduced as part of the government’s Fiscal Incentive regime. This follows months of discussion by a private sector led Incentives Working Group, working in partnership with representatives of the Ministry of Finance and Planning and TAJ. While the employment tax credit will benefit some businesses, it will also serve to encourage greater tax compliance and boost employment.
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TAXATION BULLETIN-JANUARY 2014
2 – ONE-STOP BUSINESS REGISTRATION SUPER FORM TAKES EFFECT JANUARY 2,2014
Effective January 2, 2014 individuals will no longer need to visit multiple agencies to incorporate a company or register a business name, as the Companies Office of Jamaica (COJ) will now be providing a single registration facility. The revised form will allow those incorporating companies or registering business names to make a single application for their Taxpayer Registration Numbers (TRN), General Consumption Tax (GCT), National Insurance Scheme (NIS), to register with the National Housing Trust (NHT), and complete the Articles of Incorporation required for company registration. Under the old system an individual would need to visit multiple agencies – Tax Administration Jamaica (TAJ), Ministry of Labour & Social Security (NIS), and National Housing Trust - in order to complete the registration process. The Super form is only applicable to locally incorporated companies; it does not apply to companies incorporated outside of, but registered in Jamaica. BENEFITS: The “Super form” is more convenient in saving you time and cost, by visiting only the Companies Office of Jamaica. WHAT YOU GET WHEN INCORPORATED WITH THE SUPER FORM o The Certificate of Incorporation o NIS, TRN, GCT o NHT, HEART Registration o TCC (Tax Compliance Certificate) Important feature THE CERTIFICATE OF INCORPORATION: Will now have the NIS, TRN and GCT Numbers at the base of the Certificate. The Tax Compliance Certificate (TCC): The Tax Compliance Certificate issued by the Companies Office will be valid for 90 days. At the expiration of the 90 days, a new TCC may be obtained from Tax Administration Jamaica. GCT Registration A GCT Data sheet will be issued along with the Certificate of Incorporation.
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TAXATION BULLETIN-JANUARY 2014
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3 – INCOME TAX RATES 2002-2014 INCOME TAX RATES, THRESHOLD AND EXEMPTIONS INCOME TAX RATES, THRESHOLD & EXEMPTIONS 2002 - 2014 YEAR 20022006OF ASSESSMENT 2004 2005 2007 2008 2009 2010-12 2013 2014 INCOME TAX RATE 25% 25% 25% 25% 25% 25% 25% 25% INDIVIDUAL THRESHOLD 120,432 144,768 193,440 196,872 270,504 441,168 507,312 507,312 EXEMPTIONS: INDIVIDUALS OVER 65 120,432 144,768 193,440 196,872 270,504 441,168 507,312 507,312 AGE RELIEF 45000 45000 45000 45,000 62,500 80,000 80,000 80,000 165,432 189,768 238,440 241,872 333,004 521,168 587,312 587,312 PENSIONERS UNDER 65 120,432 144,768 193,440 196,872 270,504 441,168 507,312 507,312 PENSIONERS' RELIEF 45,000 45,000 45,000 45,000 62,500 80,000 80,000 80,000 165,432 189,768 238,440 241,872 333,004 521,168 587,312 587,312 PENSIONERS OVER 65 120,432 144,768 193,440 196,872 270,504 441,168 507,312 507,312 AGE RELIEF 45,000 45,000 45,000 45,000 62,500 80,000 80,000 80,000 PENSIONERS' RELIEF 45,000 45,000 45,000 45,000 62,500 80,000 80,000 80,000 210,432 234,768 283,440 286,872 395,504 601,168 667,312 667,312 1. AMOUNT EXEMPTED IS LIMITED TO THE AMOUNT OF PENSION RECEIVED, NOT EXCEEDING THE DENOTED FIGURE 2. RATES FOR 2010 – INCOME BAND 1ST $5,000,000 @ 25%, OVER $5,000,000 - $10,000,000 @ NOTE 27.5%, OVER $10,000,000 @ 35%
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TAXATION BULLETIN-JANUARY 2014
4 – FLAT TAX FOR THE PUBLIC TRANSPORT SYSTEM The new flat tax for the public transport system is intended to make the process of paying taxes easier.
Source:TAJ
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TAXATION BULLETIN-JANUARY 2014
5 – SINGLE TAX PAYMENT FORM TO BE INTRODUCED FOR SELF-EMPLOYED PERSONS Tax Administration Jamaica (TAJ), is collaborating with the National Housing Trust (NHT) and the National Insurance Scheme (NIS) to introduce a Quarterly Statutory Payment (Selfemployed/Individuals) Form S03 by December 31,2013. The new form will allow self-employed persons and individuals to complete and submit a single form to make quarterly payments for Income Tax, Education Tax, as well as NHT and NIS contributions. With the introduction of the new quarterly payment form, self-employed persons and individuals will save time and cost of having to complete several forms or having to visit several locations to make their tax payment. They will also be better able to manage their cash flow, as payments for education tax, NHT and NIS which would normally have been due monthly will now be paid on a quarterly basis in keeping with the current requirement for income tax. The first quarterly statutory payment using the new S03 will become due on March 15, 2014. The subsequent quarterly payments will therefore be due June 15, September 15 and December 15. The introduction of the S03 is another phase in the continued effort of the Government of Jamaica to amalgamate the filing and payment of statutory taxes and contributions, with the aim of making it easier to do business. During the last two years a consolidated Employers Monthly Statutory Remittance Payroll Deduction Form S01 and Employers Annual Return Form S02 were introduced.
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TAXATION BULLETIN-JANUARY 2014
6 – IMPORTANT TAX DATES Tax Calendar
14th DAY OF EACH MONTH
− Employer’s Monthly Statutory Remittance − Payroll Deductions’ (SO1) due
LAST DAY OF EACH MONTH
− Pay & file GENERAL CONSUMPTION TAX RETURN
MARCH 15th
− Pay and file FINAL INCOME TAX RETURN for previous year. − File ESTIMATED INCOME TAX RETURN for current year − File ASSETS TAX RETURN (companies)
MARCH, JUNE, SEPTEMBER, DECEMBER 15th − Estimated Income Tax quarterly payments due
MARCH 31ST
− File EMPLOYER’S ANNUAL RETURN (SO2)
APRIL 1ST
− Property Tax payments due
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TAXATION BULLETIN-JANUARY 2014
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