Kingston GMT -4
Ernst & Young Services Limited
8 Olivier Road Kingston 8 Jamaica
Indirect tax contacts
Juliette Brown +1 (876) 925-2501 juliette.brown@jm.ey.com
Nackeisha Richards +1 (876) 925-2501 nackeisha.richards@jm.ey.com
A. At a glance
Name of the tax
General Consumption Tax (GCT)
Local name General Consumption Tax (GCT)
Date introduced 26 July 1991
Trading bloc membership Caribbean Community and Common Market (CARICOM)
Administered by Tax Administration Jamaica (TAJ) (https://www.jamaicatax.gov.jm)
GCT rates
Standard 15%
Reduced 10% Other 25%, zero-rated and exempt
GCT number format XXX-XXX-XXX (9 digits)
GCT return periods Monthly Thresholds
Registration JMD10,000,000
Recovery of GCT by non-established businesses No
B. Scope of the tax
GCT applies to the supply of goods and services in Jamaica by a registered taxable person in Jamaica and to the importation of goods and services into Jamaica.
C. Who is liable
All persons engaged in a taxable activity in Jamaica whose annual turnover exceeds JMD10 million per year are required to register for GCT as a registered taxable person.
Exemption from registration. Anyone who is engaged solely in one or more of the following does not have to register for GCT in Jamaica:
• Persons whose annual sales are below JMD10 million
• Persons whose activities are carried out essentially as a private recreational pursuit or hobby
• Any engagement (i.e., employment), occupation or employment under any contract of services or as a director of a company
• Persons who supply only goods and/or services that are exempt from the GCT
Voluntary registration and small businesses. A person with gross revenue of under JMD10 mil lion may voluntarily apply for GCT registration.
A person who proposes to carry on a taxable activity (not under a partnership) may apply (using the prescribed form) to be provisionally registered for GCT as a registered taxable person. Note that the Tax Administration Jamaica (TAJ) may require other documents prior to approving such a registration, for example, the requirement to provide a deposit for security. If the application is approved, the taxable activity by the business, must begin within 24 months of being registered.
Group registration. Group GCT registration is allowed in Jamaica. The entities in the GCT group must also be Jamaican entities (including branches of overseas companies) and must be affili ated with every other entity within the GCT group. There are several other requirements.
All members of a GCT group in Jamaica are jointly and severally liable for GCT debts and penalties. Within the GCT group, the joint and several liability between the entities is for any tax payable (inclusive of any GCT debts and/or penalties) by the representative entity of the GCT group and any other liability incurred while the entity was within the GCT group, unless an entity has ceased to be within the GCT group.
There is no minimum time period required for the duration of a GCT group.
Non-established businesses. Businesses must be established/registered with the Companies Office of Jamaica.
The GCT Act does not provide details about non-established businesses (i.e., overseas entities doing business in Jamaica). However, once a non-established business is deemed to have a per manent establishment (specifically defined in the GCT Act, which is similar to that of the defini tion provided in the Income Tax Act) in Jamaica, it is required to register for GCT. If the non-established business’ activities do not meet the criteria for creating a permanent establish ment, there is no requirement to register.
Tax representatives. Tax representatives are optional in Jamaica, and the use of a tax representa tive is the prerogative of the taxable person.
Reverse charge. The reverse charge is a GCT reporting mechanism for taxable imported services. Where a Jamaican taxable person purchases services from a non-established business from out side Jamaica, GCT is not charged by the non-established business, but the Jamaican customer, as the recipient of the services, is obliged to report GCT and pay the GCT where applicable. The GCT is an in-and-out entry (GCT reported as input tax and output tax) if the Jamaican recipient taxable person supplies only taxable services (has no exempt services).
Domestic reverse charge. There are no domestic reverse charges in Jamaica.
Digital economy. There are no specific rules in Jamaica relating to the taxation of the digital economy and no specific references in the GCT Act. As such, the general GCT rules apply.
Nonresidents that provide electronically supplied services in Jamaica do not need to register for GCT unless they have a permanent establishment in Jamaica and meet the GCT threshold for registration. If a nonresident is not required to register for GCT for business-to-business (B2B) supplies, the reverse-charge mechanism applies and the customer self-accounts for GCT due. For business-to-consumer (B2C) supplies, no GCT is accounted for.
There are no other specific e-commerce rules for imported services in Jamaica.
Online marketplaces and platforms. There are no specific rules in Jamaica relating to online marketplaces and platforms and no specific references in the GCT Act. As such, the general GCT rules apply.
Registration procedures. The registration procedure involves the completion of a GCT application form (GCT-1, which may be obtained online or collected from a Revenue Service Center) and the submission of specific documents that may be requested by TAJ (for example, certified copies of IDs of the directors of the company). Before registering for GCT, a person must first obtain a valid taxpayer registration number (TRN). The application form for the TRN may be obtained online or from any TAJ tax office. Once the application is received by TAJ, further documentation may be requested.
Deregistration. The Commissioner General may cancel the GCT registration of any registered taxable person if they are satisfied that the registered taxable person no longer qualifies for reg istration. The Commissioner General may notify the taxable person that it will be deregistered, stating the reason for deregistration. The taxable person may object, in which case the Commissioner shall inform the person in writing of the decision and of the right of appeal. Where the person is a registered taxable person, it must return the Certificate of Registration to the Commissioner when notified of the decision. A taxable person may also voluntarily deregis ter for GCT if it no longer qualifies for registration, by formally writing to the Commissioner General and requesting deregistration.
Changes to GCT registration details. The taxable person is required to advise TAJ in writing where there is a change to its GCT registration details (such as company’s name, address, type of busi ness or GCT status). There are no specific timelines or penalties associated with any change of registration details.
D. Rates
The term “taxable supply” refers to a supply of goods and services that is liable to GCT, includ ing a supply taxed at the zero rate.
The GCT rates are:
• Standard rate: 15%
• Reduced rate: 10%
• Zero-rate: 0%
• Special rate: 25%
The standard rate of GCT applies to all supplies of goods and services, unless a specific measure provides for a reduced rate, the zero rate, special rate or an exemption.
Examples of goods and services taxable at 0%
• Goods purchased or taken out of bond and services performed under a contract by or on behalf of a foreign government or multinational lending agency.
• Food produced exclusively for the feeding program of a school approved by the minister responsible for education that is not for resale to the general public.
Examples of goods and services taxable at 10%
• Certain services provided by certain entities in the tourism sector including the following:
A hotel
A resort cottage
Tour operators
Water sports
Examples of goods and services taxable at 25%
• Telecommunication services, including the sale of telephone cards
• Telephone instruments
The term “exempt supplies” refers to supplies of goods and services that are not liable to GCT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Certain energy saving devices, e.g., LED bulbs, solar panels and tubes for solar water heating systems and lighting control units
• Construction services as defined, e.g., demolition, repair or alteration of any building or the construction, repair or alteration of part of a land
• Imported chicken, which is not subject to any process other than freezing, chilling, salting or otherwise immersion in a brine solution or packaging
• Brown sugar
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Jamaica.
E. Time of supply
The time of supply is important in determining when a taxable supply takes place for GCT pur poses. The GCT Act defines the “time of supply” as the earliest of the following events:
• When an invoice for the supply is issued by the supplier
• Payment is made for the supply
• The goods are made available to the recipient or the services are rendered
Deposits and prepayments. The time of supply for deposits and prepayments is when the deposit or prepayment is made.
Continuous supplies of services. For contractually agreed continuous supplies of services that provide for the consideration to be paid from time to time upon the supplier issuing invoices, the time of supply takes place at the earlier of following:
• An invoice for the supply is given by the supplier
• Payment is made for the supply
• Payment for the supply becomes due
Goods sent on approval for sale or return. The time of supply for the supply of goods sent on approval for sale or return is considered to be when the goods are made available to the recipient.
Reverse-charge services. There are no special time of supply rules in Jamaica for supplies of reverse-charge services. As such, the general time of supply rules apply (as outlined above).
Leased assets. For assets supplied under hire purchase or lease agreement, either with or without an option to purchase, the supply takes place when the goods are made available to the recipient.
Imported goods. There are no special time of supply rules in Jamaica for supplies of imported goods. As such, the general time of supply rules apply (as outlined above).
GCT is generally payable on the importation of taxable supplies, when the goods enter Jamaica, unless the goods benefit for deferral under the import GCT deferral scheme. For further details, please see the Special schemes subsection below.
F. Recovery of GCT by taxable persons
GCT incurred on expenses may be recovered by way of an input tax credit, bearing in mind any restrictions that are contained in the GCT Act. The excess of input tax over output tax for a par ticular taxable period may be claimed as a refund or may be credited against GCT payable in a subsequent period. GCT that cannot be claimed as an input tax credit is generally deductible for income tax purposes, subject to any restrictions that are contained in the legislation. The time limit for a taxable person to reclaim input tax in Jamaica is six years.
Nondeductible input tax. GCT on private (nonbusiness) and exempt goods and services may not be recovered via an input tax credit.
Examples of items for which input tax is nondeductible
• Services relating to a contract of life assurance
• Expenses for personal use
• Expenses relating to exempt goods and services such as construction services
Examples of items for which input tax is deductible (if related to a taxable business use)
• Utility costs/bills
• Inventory purchases
• Business entertainment
• Purchases of fixed assets
• Travel expenses
• Professional and other services provided to the business
Partial exemption. Where a taxable person makes taxable and exempt supplies and is unable to separately identify the input tax paid/payable relating to both, it is entitled to claim as a credit, the proportion of the input tax that is attributable to the taxable supplies based on the formula taxable supplies/total supplies X total input tax creditable.
Approval from the TAJ is not required to use the partial exemption standard method in Jamaica. An alternative formula may be used by the taxable person (i.e., a special method), if approved by the Commissioner General.
Capital goods. An input tax credit may be claimed for GCT incurred on capital goods acquired for the making of taxable supplies, subject to any restrictions that are outlined in the GCT Act. There are no special input tax recovery rules for capital goods in Jamaica.
Refunds. A registered taxable person may tick the appropriate box on the GCT return to request a refund of the excess of GCT input tax credited over GCT output tax. The application for refund on excess taxes paid must be made within six years. However, if the applicant ceased to be a registered taxable person, the application for the refund should be made within two years after the date upon which they ceased to be a registered taxable person. Generally, if a refund is not made by the TAJ within three months after the date on which the claim was received by the Commissioner, interest at the rate prescribed by order under Section 2A of the Tax Collection Act shall be payable to the taxable person and ending on the date on which the refund is made.
Pre-registration costs. Input tax incurred on pre-registration costs in Jamaica is not recoverable.
Bad debts. The write off of bad debts is permitted in Jamaica. However, the tax treatment for the write off of bad debt would need to be analyzed on a case-by-case basis.
Noneconomic activities. Input tax incurred on purchases that are used for noneconomic activities is not recoverable in Jamaica.
G. Recovery of GCT by non-established businesses
Input tax incurred by non-established businesses in Jamaica is not recoverable.
H. Invoicing
GCT invoices. A taxable person must provide a tax invoice for all taxable supplies made to regis tered taxable persons. A tax invoice is necessary to support a claim for input tax recovery. A tax invoice must include such particulars as prescribed by the GCT Act.
Credit notes. A registered taxable person may issue a debit or credit note in circumstances includ ing, but not restricted to, the following: to reflect an alteration in the supply or correction of the tax rate that was applied, correction of the terms of a transaction or a return of goods or services
to the supplier, etc. Credit and debit notes must contain broadly the same information as a tax invoice.
Electronic invoicing. Electronic invoicing is allowed in Jamaica, but it is not mandatory. There are currently no separate requirements for the format of electronic invoices; however, they must contain the relevant information as required for a normal GCT invoice and the original invoice should be available in case TAJ requests it.
Simplified GCT invoices. Simplified GCT invoicing is not allowed in Jamaica. As such, full GCT invoices are required.
Self-billing. Self-billing is not allowed in Jamaica.
Proof of exports. Invoices should be prepared for goods that are exported, even though such goods attract GCT at a rate of 0%. To qualify as zero-rated, exports must be supported by evidence that confirms that the goods have left Jamaica. Copies of relevant supporting documents such as contracts invoices, freight and packing details, export documents and evidence of payment sup ply, etc., should be kept.
Foreign currency invoices. Invoices may be issued in a foreign currency. However, the amounts must be converted to the domestic currency, which is the Jamaican dollar (JMD) for GCT reporting purposes (i.e., in the GCT return). The conversion must be made using the Bank of Jamaica’s (BOJ) weighted average exchange rate, which can be found on the BOJ’s website (http://www. boj.org.jm).
Supplies to nontaxable persons. A registered taxable person who makes a taxable supply to a person who is not a registered taxable person is required to show the consideration for the taxable supply separate from the GCT by either issuing a receipt showing the consideration and the GCT payable or affixing to the taxable supply the consideration and the GCT payable.
Records. Registered taxable persons are required to keep accounts and records as prescribed by the GCT Act. Typically, such records include financial statements, trial balance, invoices, etc.
The records can be held in or outside of Jamaica. However, if records are held outside of Jamaica, such records must be available in a timely manner, at the request of TAJ.
Record retention period. Registered taxable persons must keep books and records for at least six years from the end of the taxable period to which they relate. The books and records that should be kept are based on best practice.
Electronic archiving. Records and books of accounts can be kept in an electronic format, as long as they are retrievable when requested by TAJ.
I. Returns and payment
Periodic returns. The GCT reporting period is monthly. Returns must be filed by the last working day of the month after the end of the taxable period.
Periodic payments. Any tax due for the GCT reporting period must be remitted to the TAJ by the last working day of the month after the end of the taxable period (e.g., GCT payable for June 2022 is due the last working day of July 2022). Payment can be made by check, wire transfer, cash or credit card. All payments can be made at any TAJ’s offices. Payments can also be made online at https://www.jamaicatax.gov.jm.
Electronic filing. Electronic filing is mandatory in Jamaica. All registered taxable persons are required to file their GCT returns online with TAJ (https://www.jamaicatax.gov.jm).
Payments on account. Payments on account are not required in Jamaica.
Special schemes. Import deferral scheme. The Commissioner General may grant approval (on such terms and conditions as they consider fit) for the importation of specific goods by a regis tered taxable person without the payment of GCT to the Commissioner of Customs at the time of importation. The registered taxable person must be up to date and compliant with the required GCT filings and the other GCT payments. If approved, the GCT would be deferred and account ed for by the registered taxable person when filing the GCT return for the taxable period in which the specified goods were imported.
Cash accounting. Only specific taxable persons can file using cash accounting, including, but not restricted to, taxable persons who supply general insurance, professional services and telephone services. The GCT Act specifies the categories of taxable persons that may be permitted to account for GCT on the cash basis, on the written approval of the Commissioner General.
Annual returns. Annual returns are not required in Jamaica.
Supplementary filings. There are no supplementary filings required in Jamaica.
Correcting errors in previous returns. The GCT legislation specifies that a registered taxable person may, after filing a GCT return, request the Commissioner to amend that return and the Commissioner shall do so if satisfied that the amendment is required. However, in practice, an amended return is generally filed to accommodate major changes or amendments to a return that was previously filed (such as the correction of an error).
To amend a previously filed return, a new return must be filed by a registered taxable person and the revised return box on the GCT form should be ticked before submission to the TAJ.
Digital tax administration. There are no transactional reporting requirements in Jamaica.
J. Penalties
Penalties for late registration. A person who fails to register for GCT is subject to a penalty of the greater of JMD10,000 or the tax that would have been payable had the person been a regis tered taxable person during the applicable period. Interest (compounded) will be applicable at the rate of 1.5% per month or part thereof.
Penalties for late payment and filing. Late payment of GCT attracts a penalty of 10% of the amount unpaid and interest at the rate prescribed by order made under Section 2A of the Tax Collection Act until the date of payment (compounded). Late filing of a GCT return attracts a penalty of the greater of JMD10,000 or 10% of the tax, which is due up to a maximum of JMD100,000, and interest at the rate prescribed by order made under Section 2A of the Tax Collection Act until the date of payment. The current prescribed interest rate is approximately 16.6% per annum.
Penalties for errors. There are no separate penalties or interest charges for errors. The penalty and interest charges that would apply are dependent on the impact of the error on the GCT payable for the relevant period. If there is additional GCT payable, the regular charges (described above) would apply.
There are no specific penalties associated with the late notification or failure to notify TAJ of changes to a taxable person’s GCT registration details. For further details, see the subsection Changes to GCT registration details above.
Penalties for fraud. Criminal penalties may apply for fraudulent conduct. The person would be liable on summary of conviction in a Residents Magistrates Court to a fine as determined or to imprisonment or to both a fine and imprisonment. The fine can range from JMD1 million or three times the tax payable if greater, and imprisonment is usually for a term not exceeding 12 months.
Personal liability for company officers. The GCT Act specifically states that the managing director, manager or other officer concerned in the management of a body corporate will be liable for offenses, unless at trial they can prove that the offense was committed without their knowledge. The penalties that may apply are outlined in the subsection above Penalties for fraud.
Statute of limitations. The statute of limitations in Jamaica is six years.