WHT is required to be deducted from chargeable payments made to non-residents and remitted to TAJ (along with the applicable return) within 14 days of the end of the month in which the payment is made in order to avoid the imposition of interest and penalties.
Subject to securing approval from TAJ (where appropriate), the following rates of WHT apply to the categories of payments highlighted (this is not an exhaustive list):
|Recipient||WHT (%) (4)|
|Portfolio||Substantial holdings (5)|
|Resident corporations||15 (1)||0 (1)||25 (3)||0||0|
|Resident individuals||15 (2)||15 (2)||25 (3)||0||0|
|CARICOM countries (6)||0||0||15||15||15|
|China, People's Republic of||5||5||7.5||10||0 (4)/33⅓|
|Switzerland||15||10||10 (7)||10||0 (8)/10|
|United States||15||10||12.5||10||0 (4)/33⅓|
- Substantial holdings refer to resident companies that hold 25% or more of the voting rights of the paying Jamaican resident company.
- Tax is withheld at the rate of 15% where a dividend is paid by a company resident in Jamaica to a resident individual shareholder, regardless of shareholding.
- Tax is deducted from interest paid to Jamaican residents if payment is made by a prescribed person.
- Provided the income is not effectively connected with a PE in Jamaica.
- Applies only to companies owning a substantial holding (percentage ownership as prescribed by the treaty).
- Rates apply only to residents of member states that have ratified the tax treaty.
- Rate reduced further if received by a bank recognised as a banking institution under the laws of that state.
- Provided the services are rendered outside of Jamaica or if in Jamaica (within a prescribed period).
WHT is also imposed at the rate of 15% on insurance premiums paid by Jamaican residents to non-residents (subject to certain exceptions and protection under a tax treaty). WHT of 3% is imposed on payments in respect of ‘specified services’ purchased locally (above a de minimis amount of JMD 50,000 per invoice).
WHT withheld should be available for offset against the payee’s income tax liability on the filing of returns.