An individual who is resident but not domiciled in Jamaica is taxed on the emoluments (salary, living allowances, benefits in kind, use of company cars, etc.) received for work done for or relating to Jamaica, regardless of where payment is made and regardless of whether the emoluments are remitted to Jamaica.
Benefits provided to employees, whether in cash or kind, are taxable. The taxable benefit arising from the private use of a company car ranges from JMD 30,000 to JMD 140,000 per annum and is determined by reference to the cost, the age, and the relative percentage of private use.
Reimbursement of excess tax paid over the tax that would be chargeable on the same amount of income in the recipient's home country (tax equalisation) is exempt from tax.
Housing accommodation benefit
Housing accommodation provided to an employee by an employer is a taxable benefit. The taxable value of benefit varies, subject to certain conditions being met.
Uniform and other non-cash benefits
The charge to income tax in respect of uniform and other non-cash benefits is to be determined by reference to the full cost of providing the uniform and other benefits in kind. Previously, the Income Tax Act did not prescribe a basis for the valuation of non-cash benefits derived by employees, with certain exceptions (e.g. the provision of accommodation benefit, company cars, or preferential loans by specified financial institutions). Nominal tax-free allowances of up to JMD 5,739 per annum in respect of the provision of uniforms and JMD 3,395 per annum in respect of laundry still apply for specified categories of workers.
Capital gains and investment income
An individual who is resident but not domiciled in Jamaica is taxed in Jamaica on investment income arising outside of Jamaica to the extent that the income is remitted to Jamaica.
There is no tax on capital gains in Jamaica. There is, however, a transfer tax on the market value of certain assets transferred and stamp duty payable on the transfer/disposal of shares or real property. See the Other taxes section for more information.
Ordinary dividends paid by Jamaican tax-resident companies to Jamaican tax-resident shareholders are liable to tax at the rate of 15%. The tax is to be deducted on payment by the distributing company and represents the final tax on such dividends. Additionally, the dividend income on which tax is payable may not be offset by tax losses, and expenses incurred to earn the dividend are no longer deductible in arriving at chargeable income.
Preference dividends that qualify as tax deductible expenses of the paying company (see below) continue to be liable to tax at applicable rates (25%/30%) where the recipient is an individual. Dividends paid to non-resident shareholders are subject to income tax thereon at the default rate of 25% in the case of an individual (subject to any treaty protection or incentive relief available).
Subject to certain conditions being met, a company may claim an income tax deduction in respect of preference dividends paid during the year of assessment. However, to the extent that these preference dividends do not qualify for this income tax deduction, they will be treated in the manner indicated above.
Income tax at the rate of 25% is deducted at source from gross interest paid to Jamaican residents (i.e. individuals and companies) by a ’prescribed person‘. Prescribed persons include commercial banks and other financial institutions. The interest is taxable at applicable rates (25%/30%) with a credit for withholding tax (WHT) borne.
Interest paid by a resident person to a non-resident individual is subject to WHT of 25% (unless a lower rate of withholding is applicable by virtue of tax treaty protection available).