Whether you’re considering doing business in Jamaica or you already do, it’s important to be aware of the different tax benefits that you can receive from doing so. The main ones include: Tax-free business income, tax-free business property, and tax-deductible NHT contributions.
Accounting consultants provide essential service to businesses
Using a professional accountant or tax consultant can be a wise move. Aside from the obvious tax returns, a professional can help you navigate the pitfalls of starting up a business. Having an accounting professional on your side can be the difference between success and failure. They can also help you make the most of tax laws and regulations.
There are several accounting consultants in Jamaica. Aside from the big three, there are several local firms to choose from. The BOMCAS brand started in Canada. The Bomcas Accountant has been in business for several years and offers the full complement of professional services. They provide their services to clients across the globe remotely and online. They offer a full range of services, from accounting and taxation to forensic accounting and management consulting. Bomcas has been providing personalized service to clients across a variety of industries. They can also assist you with your small business or personal tax returns. Regardless of the size of your organization, they can help you make the most of your tax returns.
Listed securities transferred on the JSE are exempt from stamp duty
Listed securities transferred on the JSE are exempt from Stamp Duty. This is because the shares are treated as acquired for market value. The market value of the security is determined in the currency of the South African exchange.
A security is an investment in a government debt or other company. It gives the holder the right to purchase a share at a specified price.
The Financial Markets Act defines a security as a security listed on a South African exchange. The term ‘security’ is also used to describe depository receipts.
Listed securities are treated as acquired for market value in terms of Section 9K of the Income Tax Act. However, Section 9K does not explicitly deal with the currency of disposal.
The term ‘security’ is not defined in the Income Tax Act, although the Cambridge English Dictionary defines it as an investment in a company or government debt. It is a legal instrument that establishes the business purpose of the investor.
Listed securities transferred on the JSE are not included in section 9C of the Income Tax Act. However, section 9C(2) applies to non-resident companies with listed shares. It also applies to share purchases by recognized charities.
The financial glossary provides an overview of some of the most common terms and phrases used in the financial securities industry. It does not pretend to be comprehensive, but it should be a useful aid to understanding.
General consumption tax (GCT) is generally applicable to companies with earnings above $10 million for the year
Generally, the general consumption tax (GCT) is a value-added tax that is applied on goods imported into Jamaica. This tax is used to fund government services. It is levied on the supply of goods to the island and on tourist accommodation facilities.
In addition, the GCT is used to levy a tax on the purchase of medical supplies and prescription drugs. However, some goods are exempted from the tax.
The GCT is levied at an average rate of 8.85%. However, if the tax is not paid on time, the taxpayer is penalized with a late payment penalty of 15% of the tax owed.
The Government of Jamaica has recently announced an increase in the GCT threshold from J$3 million to J$10 million a year. This increase is meant to ease compliance burdens for small and micro-businesses. It will also increase the GCT’s share of total revenue from J$1.6 billion to J$3.2 billion in 2019.
The Government estimates that the increase will benefit more taxpayers than it will cost. For example, the increase will reduce the administrative burden for 3,500 micro and small businesses. In addition, the increase will also encourage greater economic activity and more competition in the credit markets.
Income tax
Regardless of whether you are a sole trader or a small business, you must register for taxation in Jamaica. Failure to file taxes can lead to government penalties. It is also advisable to hire an accountant for assistance in filing taxes in Jamaica.
You must file your taxes annually. The standard annual return is due on March 15th each year. If you fail to file your taxes on time, you will face a penalty of JMD 5,000 per month. Alternatively, you may opt for an extension.
You must submit a BN1 form and pay the registration fee of $2,500. You must also register your business on the Companies of Jamaica (COJ) website. Using the COJ website, you will be able to view all registered businesses in Jamaica and apply for loans, government contracts, and grants.
You will also need to provide copies of your individual tax computation and a security question. Alternatively, you can register through an e-service. An e-service registration requires you to provide your organization tax payer information, as well as security questions.
The income tax rates are different for self-employed and employed persons. Self-employed individuals contribute at 2% of their earnings, while employed persons contribute at 3%.
Property tax
Having a registered business in Jamaica means that you have a legal status and can take advantage of a myriad of tax breaks and government incentives. Moreover, you can even apply for loans or government contracts.
A property tax is a tax imposed on property. The amount varies according to the value of the property. The minimum rate is 0.50%, but this number could be higher or lower depending on your personal situation. In April of last year, the tax was increased by 150%.
The best part is that a registered business can apply for tax refunds on their excess tax payments. In addition, companies that own listed securities in the Jamaica Stock Exchange are essentially exempt from the tax. This is a good reason to register for the Tax Compliance Certificate (TCC), which is required by law for any company.
There are several other taxes affecting businesses in Jamaica, not the least of which is the minimum business tax. The tax is levied on certain net assets of companies registered in the island. The highest rate is 5%, which is a small fee compared to the total cost of owning a business. The other notable tidbit is that some companies can get a discount on their annual IRAE bill.
NHT contributions are tax deductible
Among the many responsibilities of a business owner is that of paying taxes. The tax administration of Jamaica has rolled out a new Special Taxpayer Assistance Program designed to make the tax-filing process less daunting for MSMEs. Its tax-efficient digital filing system also facilitates tax-free filing of business tax returns for companies with fewer than five employees.
Its tax system is divided into three categories: the standard business tax (CBT), the HEART (Higher Education and Research Tax), and the NIS (National Insurance Scheme). The HEART is the one-time tax imposed on all employers in the country, whereas the NIS is a monthly contribution payable by employers, mainly large firms, to the NIS corpus, the state’s tax-paying insurer.
The most important part of the system is the fact that a business owner can deduct the NIS from his or her tax return, making it a win-win for both employers and workers. Besides being the most tax-efficient tax system in the country, the NIS also offers a number of other perks. Among other things, the NIS is the only state-owned entity that offers an online filing system. For MSMEs, this is a boon as it reduces the need for face-to-face interactions.
Registering a business at the Companies Office of Jamaica
During the past year, the Companies Office of Jamaica had seen an increase in the number of businesses registered. According to the COJ data, upwards of 200,000 businesses are currently on the register. This figure represents a rise of twenty-three percent over last year’s numbers.
The COJ encourages entrepreneurs to voluntarily comply with the Jamaican legal system. They also provide accurate information about commercial entities. This information is available to companies, firms, and individuals, enabling them to verify their legal status.
The COJ provides information on the status of companies, foreign companies, and individuals, as well as related services. They also administer the National Security Interests in Personal Property Online Registry. They are also responsible for the regulation of business names. They have four main roles, which include: registering businesses, removing entities, providing business information, and offering related services.
In order to register a business, a person must fill out a form. There are two forms: the BN1 and the BN2. The BN1 form is used for renewals of a business. The BN2 form is used for new business applications.
The COJ is also responsible for providing information on companies that are in liquidation, which are being wound up. If a company is struck, its assets are transferred to the Crown. If the company is restored, it must pay a restoration fee and file all outstanding documents.
