DIRECTOR-GENERAL for Tax Administration, Clive Nicholas is
reminding persons who live in Jamaica but work abroad that they are required to
pay taxes on their world income and need to file returns by March 15.Explaining, the Director-General said that persons who reside in
Jamaica on a part-time basis but work abroad on occasion, were required by law
to include all their income, even foreign earnings, when computing their
taxes.
"In other words," Mr. Nicholas said, "if you work six months in
Jamaica and you are a resident here and you go abroad for three months and you
work an income, you have to file your returns on the 15th of March."
TAX LAWS
According to the Director-General, many persons are not aware of
this requirement but noted that this obtained in the tax laws of most
countries.
He said the Tax Department receives information from
time-to-time from treaty partner, the United States, on the investment income
that resident Jamaicans may earn in that country. As such, he is urging such
persons to file their returns in order to escape penalty.
Speaking recently at a JIS Think Tank session, the
Director-General said that the double taxation treaty is a bilateral agreement
that Jamaica has with about ten other countries. The agreement ensures that
persons who live in Jamaica but work elsewhere do not pay income tax
twice.
Clarifying, Mr. Nicholas said that if a resident Jamaican pays
his taxes in another country where he his employed then he would not be required
to pay income tax in Jamaica. However, if he pays no income tax in the country
in which he is employed, then that person should pay his taxes in
Jamaica.
Additionally, Mr. Nicholas said that if that person pays income
tax in the country of employment at a rate that is lower than the 25 per cent
rate required in Jamaica,then he or she is required to pay the difference
in Jamaica.
If however, the rate in the country of employment is higher than
the 25 per cent tax rate that obtains in Jamaica and the taxpayer makes his
income tax payment abroad, then he or she would not be liable to make any
payment in Jamaica.
He added that in territories like the Cayman Islands where no
income tax is paid, Jamaican residents working there are required to pay his
income tax in Jamaica at a rate of 25 per cent.
In the meantime, the Director-General observed that many
expatriates with contracts for service in Jamaica do not live up to their tax
obligation. He explained that these persons are usually paid their gross income
and it is incumbent on them to pay their own income tax and other statutory
deductions. However, he pointed out, many were not doing so.
He also urged Jamaicans employed to embassies here to live up to
their tax obligation and avoid interest penalties. According to Mr. Nicholas,
these persons are also paid their gross emoluments from which they are required
to meet their own tax obligation.
