General consumption tax (GCT)
GCT is a value-added tax (VAT) imposed on the supply of goods or services within Jamaica (above a minimum turnover threshold) and on the import of goods or services to Jamaica. The annual turnover GCT registration threshold is currently JMD 10 million. The standard rate of GCT is currently 15%, however, higher or lower rates of GCT are applicable to certain goods and services; for example, the provision of telephone services (including phone cards) and handsets is subject to GCT at the rate of 25%, while the tax is imposed on hotels and other businesses in the tourism sector at an effective rate of approximately 10%. Operators within the tourism industry who were granted approval under legacy tourism incentives and who have not elected to move to the current regime cannot benefit from the 10% tourism GCT rate.
Subject to certain exceptions, an additional 5% advance GCT is levied on the commercial importation of goods by a GCT-registered taxpayer.
Where services are imported from a supplier who is not resident in Jamaica, the recipient of those services is deemed to be liable to account for GCT on the services. The recipient may be able to claim a credit for GCT incurred on imported services in certain circumstances; in particular, there are specific conditions where such services are received from overseas connected parties.
The list of items exempt from GCT includes a range of basic food items, prescription drugs, certain medical supplies, as well as certain construction, transportation, and financial and insurance services. Zero-rated goods and services include certain agricultural and fisheries inputs, exported goods and services, and purchases by diplomatic and international organisations and foreign governments.
A GCT group accounting mechanism is available, whereby two or more affiliated entities may be approved by the Commissioner General, TAJ to be treated as a single taxpayer for GCT purposes.
Customs duties and related imposts
Customs duty is levied on the customs value of goods imported, which is determined in accordance with the World Trade Organization (WTO) rules on customs valuation.
The rates are specified by a prescribed Customs Tariff, having regard (where appropriate) to the Common External Tariff agreed between Caribbean Community (CARICOM) member states.
In addition to normal customs duties, an environmental protection levy (EPL) and a standards compliance fee (SCF) are imposed at the rate of 0.5% and 0.3%, respectively, of the customs value of goods imported. The EPL is also imposed on 75% of the sales value of locally manufactured goods with an input tax credit available for any EPL paid in respect of imported productive inputs. Customs administration fees (CAF) are charged based on the service(s) provided by Jamaica Customs. Other import levies apply in certain instances, such as additional stamp duty (ASD) on certain goods.
Special consumption tax (SCT)
SCT is imposed at various rates on the importation or local manufacture of ‘prescribed goods’ (i.e. certain petroleum products, ethanol, alcoholic drinks, tobacco, and motor vehicles).
All land in Jamaica is valued for property tax purposes on the 'site value' or 'unimproved value' (as reflected on the 2013 Property Valuation Roll). Property tax is levied by reference to various value bands at a scale of rates ranging from 0.50% to 0.90%.
A transfer tax of 2% is applicable on the consideration payable (or market value in certain instances) on the transfer of land, buildings, securities, and shares (provided that a refund is available where the transfer tax charged exceeds 37.5% of the capital gain made). Transactions on the Jamaica Stock Exchange (JSE) are exempt from transfer tax, as are the transfer of registered corporate bonds, whether or not the company is listed on the JSE.
A form of transfer tax is also imposed on the estate of any individual who is domiciled in Jamaica at the date of death. The tax-free threshold for the imposition of transfer tax on estates is JMD 10 million.
Stamp duty is imposed on a wide variety of legal instruments. The rate of stamp duty depends on the legal instrument involved. Transfers of shares on the JSE are exempt from stamp duty, as are the transfer of registered corporate bonds, whether or not the company is listed on the JSE.
Payroll taxes are imposed at the national level on emoluments paid by employers to their employees, including (subject to certain conditions) expatriates who undertake work in Jamaica. The taxes comprise Pay-As-You-Earn (PAYE) Income Tax, Education Tax, and contributions to the National Housing Trust (NHT), the National Insurance Scheme (NIS), and the Human Employment and Resource Training (HEART) Trust.
Employers are obligated to deduct and remit payroll taxes within 14 days after the end of the month in which the emoluments are paid. Employers and employees contribute at the following rates:
|Payroll tax||Basis||Employee rate (%)||Employer rate (%)|
|PAYE Income Tax||Taxable emoluments up to JMD 6 million per annum less the annual tax-free threshold||25.00||N/A|
|Taxable emoluments in excess of JMD 6 million per annum||30.00||N/A|
|Education Tax||Taxable emoluments||2.25||3.50|
|NHT contributions||Gross emoluments||2.00||3.00|
|NIS contributions||Gross emoluments up to a maximum of JMD 1.5 million per annum||2.75||2.75|
|HEART contributions||Gross emoluments||N/A||3.00|
An ad valorem asset tax at the rate of 0.125% is imposed on the ‘taxable value’ of the assets of deposit-taking institutions regulated by the Bank of Jamaica, as well as securities dealers, life assurance companies, and property and casualty insurance companies regulated by the Financial Services Commission. The taxable value of assets is broadly determined as the value of assets on the balance sheet with adjustments for certain items specific to each type of institution.
Payments to contractors (including sub-contractors) in respect of construction, haulage, and tillage operations are liable to a withholding of a contractors levy of 2% of the gross amount paid. This must be remitted to TAJ within 14 days of the end of the month in which the payment is made. The levy paid is allowable as a credit against the income tax liability of the contractor in the year of assessment in which the levy is deducted. To the extent that there is any excess, it is not refundable.
Guest accommodation room tax (GART)
GART is levied at a specific rate on hotels and other tourist accommodation facilities based on room occupancy. GART is tiered depending on the number of rooms at the hotel or other tourism accommodation facility.
Telephone call tax
A levy is imposed on telephone calls, including inbound calls terminating on fixed or mobile networks.