CORPORATE TAXES
SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in the past year.
Taxes on corporate income
Income tax/Income tax at a basic rate of 33 1/3% is payable by most corporations, including Jamaican branches of foreign corporations.
Life insurance companies are taxed at 7.5% on their investment income less management expenses. Building societies (similar to savings and loans) are taxed at the rate of 30% on their profits.
There are no other local taxes on corporate income.
CORPORATE RESIDENCE
A corporation, wherever incorporated, is resident in Jamaica if the central management and control of its business are exercised there. Normally, this is the case if meetings of directors and shareholders are held in Jamaica and major policy decisions of the corporation are made there.
OTHER TAXES
Annual fee/A fee ranging from J$100 to J$10,000 is payable, depending on the aggregate value of the company's assets. The maximum fee is payable where the aggregate asset value exceeds J$5 million.
Life insurance premium tax/This tax is payable by regionalized companies at 1.5% of premium income; for others the rate is 2% of premium income.
Consumption taxes, customs duties/There is a value-added tax, called the general consumption tax (GCT). The standard rate is 15%. Higher rates are applicable to some goods (tobacco products, liquor, motor vehicles, and fuels), and there is a special regime for tourism activities. The list of items and services exempt from GCT includes a wide range of grocery and
household items. Certain specified drugs as well as other items and services are zero rated.
In 1998 there was an increase in the special consumption tax levied on petroleum products and cigarettes. Additionally, the rate of customs duty (common external tariff-CET) on crude oil was removed, and there was a reduction in the CET on various finished products. The CET rate for motorcars and other passenger vehicles has been increased from 30% to 40%.
BRANCH INCOME
Branch income is taxed at the same rate as that of local corporations and on a similar basis. The transfer of profits to head office is subject to a withholding tax of33 1/3% or at a lower treaty rate where applicable.
INCOME DETERMINATION
Inventory valuation/Inventories are valued at the lower of cost or market value. No pronouncement has been made by the Commissioner of Income Tax, but LIFO is generally notpermitted. Book and tax methods of inventory valuation will generally conform.
Any method of valuation that accords with standard accounting practice is acceptable for tax purposes, provided it is consistently applied at the beginning and end of the accounting period and is not in contravention of the Income Tax Act.
Capital gains/There is no tax on capital gains. There is, however, a transfer tax of 7.5% of sales proceeds (limited to 37.5% of the capital gain) payable on the transfer of land, buildings, securities, and shares. There is also stamp duty of 1%. Transactions on the Jamaica Stock Exchange are exempt.
Intercompany dividends/Dividends paid out of profits by a Jamaican corporation are taxed at 33 1/3% or at a lower treaty rate where applicable. Where such dividends, termed "franked income," are received by a Jamaican resident company, they may be paid to that company's shareholders without further deduction of tax. Similarly, any other Jamaican resident company or other shareholder receiving a subsequent
dividend out of this franked income is not subject to deduction of tax. The tax deducted by the first company settles the tax that would otherwise be payable by a subsequent recipient of a dividend paid out of that franked income. Dividends paid by a company are deemed to be paid first out of franked income.
As of 1997 the revenue authorities are no longer issuing refunds or recognizing a credit in respect of the underlying tax attributable to franked income, i.e., franked income is no longer included in computing taxable income.
Foreign income/A resident corporation is taxable on its worldwide income. Avoidance of double taxation is achieved by credits under tax treaties or, in the case of most Commonwealth countries, under the general Income Tax Act itself. Where recourse cannot be had to either of these, partial relief is granted by a deduction against income for the foreign tax.
Stock dividends/Bonus shares are not taxable to the recipient. From year of assessment 1994 a tax credit is available where distribution of profits or gains is made by way of bonus shares. (Banks and certain other financial institutions and bauxite/alumina companies do not benefit form this incentive.)
Capital distributions/Dividends paid out of income derived form nontrading sources (e.g., disposal of fixed assets) are termed capital distributions. Such divide
[1] [2] [3] [4] 下一页
