Whether you are a Sole trader, a small business owner or an individual, accounting, and tax in Jamaica are something you should know about. The first thing you need to know is that there are specific accounting and tax rules that apply to every individual and business. Luckily, there is a very simple way to find out what these rules are and how you can meet them.
Bookkeeping
Whether you’re a newbie or a seasoned entrepreneur, you’re required to file taxes. If you don’t, you could be tasked with paying for government penalties.
The good news is that there are accounting and tax services in Jamaica to help you. These companies are affiliated with international accounting firms and have English-speaking employees. They also offer services such as preparing tax returns and managing your finances. These services can prove invaluable to entrepreneurs based in Jamaica.
One such company is Knowledge Base Accounting and Consulting. Owner Shana Spencer is a self-proclaimed accounting aficionado, and she’s been helping local entrepreneurs get their business on the right foot for nearly two decades. She and her team treat their clients like family and are constantly updating them on the latest in accounting.
She also has an Associates Degree in Business Management from Vermont Technical College. She’s been working in financial institutions for 21 years, and she’s been in the accounting business for the better part of a decade.
She’s also a certified public accountant and a member of the Institute of Chartered Accountants of Jamaica. She is based in Windsor, Vermont, but resides in the Caribbean for much of the year. She also has a love of accounting and a passion for all things related to it.
She’s also the director of Knowledge Base Accounting and Consulting, and she’s on a mission to help her clients navigate the world of taxes in Jamaica. If you’re interested in getting your business on the right foot, give her a call today. She’s got the skills to help you file the right taxes for your business and help you make your business the envy of the neighborhood.
Income tax
Despite its modest size, the Government of Jamaica has imposed a wide variety of taxes. Income tax is an important source of revenue. It is used to provide economic justice to all Jamaicans and promote economic growth.
The first income tax law was passed in 1919, in order to increase the island’s revenue. It is an effective tax, especially in the informal sector.
Tax rates are adjusted every year. The lowest income groups pay 10 to 16 percent of their income in tax, while the highest-income groups pay 14 to 19 percent. The rates are based on the taxable income for a specific tax year.
The tax system in Jamaica is based on the PAYE system. This system is used to calculate taxes for both employees and employers. It covers income tax, social security, and public health insurance.
In addition to income tax, there is a Minimum Business Tax, which is not a tax on business income. The tax is payable in addition to all other taxes paid by businesses in Jamaica.
Non-residents are not subject to income tax in Jamaica, unless they have an income from a Jamaican investment. The government wants to encourage foreign investment in Jamaica. This may mean that non-resident income tax rates in Jamaica could be reduced.
The tax rate in Jamaica is 25% for individuals and 30% for individuals with income above $6 million JMD. This is the lowest tax rate in the world.
The government has made significant progress in improving the tax system through the establishment of an independent Objections Unit. It has also codified tax incentives for investors. It has also adopted a streamlined income tax regime.
Dividends
Using credible accounting standards, the production of central bank financial statements has led to significant changes in the way central bank profits are measured. However, these changes have also created difficulties for central banks.
One of the major concerns of central banks is that their profits may not be backed by liquid assets. This creates a risk that unrealized profits could reverse with interest rate or currency corrections. Hence, central banks need a dividend policy that ensures the appropriate protection of central bank capital.
Several issues arise when determining the dividend policy. First, the bank must ensure that the dividend is backed by liquid assets. Second, the dividend must be in accordance with the central bank’s accounting and reporting framework. And finally, the dividend policy must not conflict with monetary policy objectives.
Dividends and accounting and tax in Jamaica have evolved in recent years. The adoption of international standards has increased the credibility of central bank financial statements. However, this has also created new issues related to dividend distribution.
Dividends can be distributed once a year or quarterly. The latter is more preferable. The payment can be made with money or transferred property. However, dividend payments are only admissible if specified in the constitutive documents of the enterprise.
Dividends are subject to income tax in Jamaica. Ordinary dividends paid by tax-resident companies are subject to a rate of 15%. Interest paid by a resident to a non-resident is subject to a rate of 25% or 30%. In some cases, a lower rate may be applicable due to a tax treaty protection.
The taxation of dividends has implications on the number of companies paying dividends, the number of account holders and the number of account holders who are eligible to receive dividends. It also has a direct effect on the government.
Public Accountancy Act of 1968
Getting your insurance company to hire a certified public accountant may be more expensive than you think, but the rewards may be well worth the extra expenditure. Aside from the obvious financial costs, the insurer will benefit from an unbiased opinion from a well-qualified individual. Similarly, a competent certified public accountant will likely be a more efficient communicator than an employee of a local accounting firm. A qualified individual is also more likely to take the time to educate himself about your business and the insurance industry in general.
It’s not surprising that the Insurance Commissioner and his staff will have a hard time selecting between the qualified accountants that apply for a job. Indeed, the most difficult part of hiring a qualified public accountant is selecting the best one amongst the dozens. Aside from the usual suspects, there are several reputable firms in Jamaica, and the surrounding islands, that could provide the necessary level of scrutiny and confidence. The following is a brief list of such firms, with their addresses. For the sake of brevity, we have limited ourselves to Kingston and Montego Bay, Jamaica. In the event you are in the market for a certified public accountant, we recommend that you do your homework and make sure you get the best deal on the market. Moreover, it’s important to remember that the lion’s share of these firms are local, so you’ll want to do some due diligence in the area you plan to open an office. In any event, the best time to begin your search is today! Hopefully, you’ll be able to reap the rewards in the near future.
Sole traders
Managing taxes and accounting are important for sole traders in Jamaica. The benefits of paying taxes in Jamaica are numerous. They include easy access to loans, a pension scheme, and being eligible for National Insurance benefits.
When a sole trader is starting a new business, they must ensure that they are registered with the Companies Office of Jamaica. The registration process is inexpensive and is relatively easy to complete.
Once a sole trader has started trading, they must notify the HMRC of their intention to trade. They are also required to submit a BN1 form and pay a $2,500 registration fee. They must also file a self-assessment tax return.
They must also pay National Insurance on the profits of their business. They must set aside an appropriate amount of money each month for taxes. The amount that they must set aside will depend on the nature of their business.
Tax returns for sole traders are filed each year. They are due by the last working day of the month following the tax year. The tax return is a reconciliation of statutory payments made in the previous month.
A sole trader is also required to notify the HMRC when they cease trading. They must also send their final tax return. They must include their own name on all business documents.
A sole trader can use accounting software to keep track of their revenue and expenses. The software will help the trader to become more efficient and to make better business decisions. It also can share data with accountants.
It is important to pay taxes in Jamaica to ensure that you are eligible for NIS pension and loans. Also, keeping track of your taxes is easy with accounting software.
