Group taxation is generally not permitted in Jamaica, with the exception of a mechanism to permit group filing of returns for GCT purposes.
Jamaica has implemented a transfer pricing regime consistent with the Organisation for Economic Co-operation and Development's (OECD’s) guidelines on transfer pricing for multinationals in an effort to protect its tax base and address issues of tax avoidance, particularly in relation to cross-border transactions. Detailed transfer pricing rules seek to ensure that taxpayers compute their taxable income using a deemed arms-length consideration (determined in accordance with prescribed methodologies) for all transactions between connected parties (where different to the actual consideration involved).
All taxpayers who engage in such transactions are required to disclose information pertaining to the identity of connected persons, particulars, and pricing arrangements of such transactions primarily through the annual income tax return and to retain this documentation in support of the income tax return. Business entities with gross annual revenues of JMD 500 million or more are required to comply with extensive OECD standard transfer pricing documentation requirements.
The rules also empower the tax authorities to deem an unconnected person located in a low-tax jurisdiction to be a connected person under certain circumstances.
There are no provisions for thin capitalisation in the tax laws of Jamaica. It has been proposed, however, that such provisions should be introduced in the future.
Controlled foreign companies (CFCs)
There is no CFC regime in Jamaica.