INDIVIDUAL TAXES
SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in the past year.
TERRITORIALITY AND RESIDENCE
In general, Jamaica taxes its citizens and residents on their worldwide income. An individual working in Jamaica is taxed on the compensation a attributable to the Jamaican services and other Jamaican-source income.
Individuals are treated as being resident in Jamaica for a tax year if they satisfy any one of several conditions.
1. They spend at least six months in Jamaica in the tax year or visit Jamaica with the intention of remaining there permanently and have actually been in the island for six months in the tax year.
2. They (or their spouses) have a place of abode available for their use in Jamaica, and they visit the island at any time during the tax year, no matter how short the stay.
3. They habitually visit Jamaica for substantial periods. The Commissioner of Income Tax would probably regard periods totaling three months as substantial and visits occurring in four consecutive years as habitual.
An individual not domiciled in Jamaica is taxable in Jamaica on any Jamaican-source income and, where resident, on remittances of foreign income to the island.
GROSS INCOME
Employee gross income/An individual resident but not domiciled in Jamaica is taxed on the emoluments (salary, living allowances, benefits-in-kind, cars, etc.) paid for work done for or on behalf of Jamaica, regardless of where payment is made and regardless of whether the emoluments are remitted to Jamaica. Income for services rendered outside Jamaica is not
taxed if the services are not related to Jamaica.
Benefits, whether in cash or kind, payable for services rendered are taxable. Accommodation is ascribed a taxable value of 15% remuneration. If the cost or market value of the accommodation exceeds other emoluments, the value is 15% of the average of other emoluments and cost/market value of the accommodation.
The taxable benefit arising from the private use of a company car ranges from J$30,000 to J$140,000 and is determined by reference to the cost, the age and the relative percentage of private and business use.
Persons to whom allowances for laundry and uniforms(up to a specified limit)can be paid tax-free must be designated by the Commissioner of Income Tax.
Tax reimbursement is exempt from tax, provided it does not exceed the excess of Jamaican taxes paid over the tax liability on the same amount of income in the recipient's home country.
Capital gains and investment income/No tax is levied on capital gains. There is, however, a tax of 7.5% of the consideration paid on the transfer of certain assets, e. g., land and company securities(including stock). The tax is limited to 37.5% of the capital gain. Resident individual recipients of unfranked dividends and interest are subject to 25% withholding tax at source(corporate recipients, 33 1/3%). This local withholding tax is added to the net receipt, which is taxed, i. e., the
gross and credit for withholding tax incurred. Franked income is distributions received by a corporate body subject to income tax, which is resident in the island and from which distribution tax has been deducted at source.
An individual resident but not domiciled in Jamaica is taxed in Jamaica on investment income arising outside Jamaica to the extent that the income is remitted to Jamaica.
DEDUTIONS
Business deductions/To the extent not reimbursed, individuals (resident or nonresident) their income, e.g., business-related travel, automobile and entertainment expenses. Expenses for travel to and from work are not deductible. There are no standard deductions or deductions for expenses that are wholly personal.
Nonbusiness expenses/Social security and superannuation contributions to approved pension schemes are deductible in determining taxable income, as is interest paid in acquiring income. Approved charitable contributions, restricted to 5% of taxable income, are also deductible.
There are no standard deductions.
Relief is not available for medical expenses, insurance premiums and mortgage interest paid on a local dwelling.
Personal allowances/There are no personal allowances.
TAX CREDITS
Foreign tax paid on income that is not taxed in Jamaica is not available as a credit against the individual's Jamaican tax liability on other income.
OTHER TAXES
Social security taxes/Effective February 1996 there was an increase in the insurable wage ceiling under the National Insurance Act, resulting in a new maximum of J$120.25 per week.
Other taxes on income/The National Housing Trust Contributions and Education Tax, which are payroll taxes, are each payable by employees at the rate of 2% on taxable compensation for employment in the island. They are not deductible for income tax purposes. Expatria
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