EFFECTIVE OCTOBER 1, 2005, the rate of GCT applicable to the tourism sector is 8.25 per cent, which is 50 per cent of the current standard rate of GCT. Other amendments with respect to the treatment of GCT also took effect on October 1, 2005.
The key changes are outlined below:
TREATMENT OF TAX INVOICES:
Tax invoices are no longer tax inclusive: the GCT must be shown.
CHANGES IN THE REGULATIONS:
Regulation 8(9) has been deleted and all tax invoices must state the amount of tax charged.
Regulation 12, which spells out the tourism formula, has been removed.
As it pertains to Regulation 14(5) the following obtains:
a. For trade within the sector, all the GCT (input tax) paid is allowable as a credit.
b. All other entities purchasing services from tourism entities are entitled to a tax credit of 50 per cent of the tax (GCT) charged.
TREATMENT OF GCT RETURNS:
The total supplies declared in box six of the tourism return, are to be declared exclusive of the GCT, but must include both tourism and non-tourism
revenue.
In completing box 12 of the GCT returns, the gross tourism revenue includes commissions and gratuity. The taxable value however, will exclude both - commissions and gratuity.
OTHER CHANGES:
The definition of non-tourism revenue, as defined and described under the GCT Act remains.
The taxable value of the tourism revenue excludes commissions and gratuity.
Transportation is no longer allowed as a deduction before the computation of tax.
The special tax credit has been removed.
The special alcoholic beverages credit has been removed.
For further information, contact the toll-free service 1-888-TaxHelp (1-888-829-4357) or the technical/public relations units of the Taxpayer Audit & Assessment Department at 929-7316/920-5772/960 -0243.
Taken from The Sunday Gleaner,October 16, 2005
