Jamaica taxes its residents on their worldwide income from all sources and uses a self-assessment tax system, where you must calculate your own tax liability.
Income tax returns are due by March 15th each year, for the immediately preceding year. That means the income tax return for 2022 is due by March 15, 2023. If you are unsure whether you should be filing an income tax return this year, read on to learn more.
Multiple Formal Employment
Once you are on the payroll of more than one employer in the same year of assessment, you are required to file an income tax return. Though your employers may have already deducted taxes and contributions from your income, you are still required to file an individual income tax return, declaring all your income and taxes thereon. Combing all your sources of income will make it easier to determine if you are entitled to a refund or have additional taxes to pay.
It is important to note that filing this income tax return is not the responsibility of your employer.
Self-employed/Additional Income Earners
If you are self-employed or earn additional income outside of your employment, you are required to file an income tax return. This is applicable whether you have a registered sole proprietorship or have an in-formal business structure or a partner in a partnership. Note that this category may include directors of a company, in certain circumstances. Therefore, whether you are earning income from selling shoes out of your trunk, renting out your car part-time or as a virtual assistant to a boss in another, you are required to declare the income and pay any relevant taxes.
Dormant/Non-operational Entities
You may have registered an entity but never started operations, or discontinued operations without removing the entity from the Companies Register or closing your tax accounts with Tax Administration Jamaica (TAJ). In both cases, you are required to continue filing annual income tax returns until you have removed the business name or company from the Companies Office Register and closed all its tax and statutory accounts with TAJ.
It is important to note that you are required to make all relevant tax filings and clear all taxes owed before you can close the tax accounts.
Non-Profit/Charitable Organizations
Although non-profit organizations and approved charitable organizations may be exempt from income tax, they are still required to file an annual income tax return. The type of tax return form used is dependent on your charitable status. Feel free to contact us for guidance if you are not sure which form to use for your non-profit organization.
Companies/Businesses Registered During the Year of Assessment
It is a common misconception that your financial year, for tax purposes, follows the date of your business/company registration or the date you began formal operations. This is not the case. Based on local law, your financial year for tax purposes is the calendar year, regardless of which month the entity was registered or when operations began. For example, if you registered your business or company in July 2022, your financial year for tax purposes remains January to December 2020. You would therefore be required to file an income tax return come March 15, 2023.
To change to an alternate financial year for tax purposes, you must seek approval from TAJ’s in writing at least 60 working days prior to the beginning of the new financial year.
Foreign Branches & Non-resident Entities
Foreign branches and certain non-resident corporations carrying on trade/business activities in Jamaica are required to file an annual income tax return locally. The basis on which an income tax return filing is required by a non-resident or foreign branch is intricate. As such, I recommend that you engage a tax advisor for guidance. Our team would be ahoy to help.
Return requested by Commission General
Though you may not fall within any of the above categories, you may still be required to file and income tax return. Under our local Income Tax Act, the Commissioner General have the power to request an income return from any person, whether or not he is required to pay income tax. You are then required to deliver this return within fifteen (15) days of being served this notice.
Still in Doubt?
If you are still not certain whether you are required to file an income tax return, contact Senior Accounting Services Limited for a free consultation today.
All data and information provided on this blog is for informational purposes only. This information is of a general nature and is not intended to address any particular circumstances of an individual or entity. We cannot guarantee that the information therein is accurate as at the date published or that it will continue to be accurate in the future and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. You are urged to seek appropriate professional advice that is specific to your situation Filing an income tax return is a must for many Jamaican residents. Jamaica taxes its residents on their worldwide income from all sources and uses a self-assessment tax system, where you must calculate your own tax liability.
