Taxation for Entrepreneurs

Taxation for Entrepreneurs

• The KRSC Taxpayer Education Unit presented information on taxation for entrepreneurs, focusing on requirements, rates, and due dates.
• The Tax Administration Jamaica (TAJ) expects honesty in dealings with the tax administration.
• Timely payment of taxes is required.
• Accurate and complete tax returns are needed, following specified deadlines.
• Entrepreneurs must notify TAJ of changes in business information (address, name).
• Proper records are essential to accurately calculate tax liabilities.
• A TAJ Portal login and RAIS eServices registration are needed for online filing and payment.

What Every Entrepreneur Should Know

• Information about TAJ expectations, tax returns, rates, due dates, completing income tax returns (S04/S04a), and the tax compliance certificate (TCC).

What TAJ Expects from You

• Honesty is expected in dealings with the tax department.
• Tax payments should be made on time, with correct returns and documentation.
• Complete and accurate information must be provided within specified time limits.
• Notification of business changes (address, name) is required.
• Detailed records for calculating tax liability are necessary.

Rates - Self Employed

• NIS (National Insurance Scheme): 6% of net profit.
• NHT (National Housing Trust): 3% of net profit.
• ED Tax: 2.25% of statutory income (net income less approved superannuation).
• PAYE/Income Tax: 25% or 30% (6M) of statutory income less income tax threshold.

Income Tax - Rates & Returns

• Companies: 33⅓% on net income (regulated entities) or 25% (unregulated entities) for the trading year.
• Individuals: 25% on net income (with 30% over 6 million), with the tax year being the calendar year.
• Employees (PAYE): 25% on gross salary with nil rate and approved pension contributions.
• Partnerships: 25% on net income with nil rate and approved pension contributions, 30% over six million.
• Returns for companies and individuals are due on March 15th.
• Employee (PAYE) tax is deducted and paid monthly by the employer. Returns due dates:
• ITO2 & IT07: March 15th (Companies/individuals)
• SO4 & S04a: March 15th (Companies/individuals)
• S01 & S02 (employees): March 31st (filed by employer)
• ITO3: March 15th (Partnerships).

Before you file and pay online TAJ

• A TAJ Portal login is required.
• RAIS eServices registration is needed for filing.

Due Dates & Returns

• March 15th: SO4 & SO4a (Sole Proprietor), IT02(Body Corporate/Ltd), IT03 (Partnership).

• April 1st: TB01 (Trade & Business Licence).

• Last business day in the month after GCT

• 14th day of the following month: Payroll Taxes (S01/SO2).

Types of TCC

• Special: Issued to individuals for a specific purpose (e.g., custom clearance), valid for one month.
• Open: Issued to companies and sole proprietors who are compliant; valid for 3-6 months (contract and multipurpose).
• Gold: Issued to applicants who have paid and filed returns on time for 12 consecutive months; valid for one year.
• An automatic TCC is issued once the taxpayer is fully compliant.

Why was I rejected a TCC?

• Already has a valid TCC.
• Returns are not filed up to date.
• Outstanding payments not addressed.
• No payment arrangement with Debt Collections.
• Required documents were not provided.
• Fail to report income from all sources.
• Several failed attempts to contact taxpayer for an interview (first-time applicants).

Online Application Processes

• To apply for a TCC, visit the TAJ website.

Online Payment Options

• Credit Card.
• Bill Pay (NCB & BNS).
• Direct Funds Transfer.

Tax Compliance Certificate (TCC)

• The TCC ensures individual/organization tax compliance and up-to-date tax liabilities and deductions.
• It encourages voluntary compliance.
• The TCC is required for various purposes, including bidding on government contracts, applying for government loans, and opening bank accounts.

Requirements for Obtaining a TCC

• Complete the online application form on www.jamaicatax.gov.jm.
• Provide attachments as needed, including:
  • Certificate of Incorporation/Business Name Registration.
  • Clearance Letters (if required).
  • National Insurance (NIS).
  • National Housing Trust (NHT).
  • Heart.
• TAJ will process clearance for different tax types, including income tax (corporation/self-employed) and statutory taxes, with specific requirements for new trades and companies with no employees.
• First-time applicants may need an interview.

Exploring Income Tax Return $04/$04a

• The return $04/$04a is a form used for income tax returns.

Reminder!!

• The new entrepreneur must submit IT03/IT02/IT07/S04/S04a by March 15 of each year.
• File S01 and S02 returns if there are employees.
• Late filings incur a penalty of $5000 per month.
• Keep proper financial records, as required by the Income Tax Act, Revenue Administration Act.
• Update TAJ of any changes (address/directors...).

Contacting TAJ - External

• Phone number: 888-TAX-HELP (829-4357)
• Email addresses: [email protected]; [email protected]
• Website: www.jamaicatax.gov.jm
• Social media links: Facebook, Twitter, Instagram, YouTube.