| Jamaica Income Tax Rate Jamaican residents are taxed on their worldwide income in excess of JMD 220,272. A flat tax rate of 25% applies for Jamaican residents. An individual is resident if he / she spends more than 183 days in Jamaica in any year of assessment.
Jamaica operates a PAYE (Pay As You Earn) tax system.
Deductions and allowances: deductions and allowances include contributions to an approved pension fund (limited to 10% of the salary), National Insurance Scheme, and donations to an approved charitable organization, which is limited to 5% of the statutory income.
Tax year: Tax year is the calendar year
Capital duty: No capital duty.
Stamp duty: The stamp duty is 4.5% on the transfer of real property and 1% on the transfer of shares, based, in both cases, on the sales value.
Capital acquisitions tax: There's no capital acquisitions tax in Jamaica, but a transfer tax may apply in certain instances.
Real property tax: An annual property tax is levied at a flat rate of JMD 600 for unimproved value up to JMD 300,000 at 0.5% over JMD 300,000.
Inheritance / Estate Tax: There's no Inheritance / Estate Tax in Jamaica.
Net wealth tax / Net worth tax: There's no Net wealth tax / Net worth tax in Jamaica.
Social Security Tax: The employer and employee each contribute 2.5% (5% for the self-employed) based on the first JMD 500,000 annually of the employee's earnings, plus a nominal flat weekly contribution. A prorated monthly amount may also be paid.
New income tax threshold and exemptions in Jamaica - July 1, 2009
Effective July 1, the income tax threshold will be increased to $320,736, up from the current tax-free amount of $220,272.
"This means that for the remainder of the year, individuals will benefit from a tax-free income of $26,728 monthly, $12,336 fortnightly, or $6,168 weekly," said the Tax Administration Services Department (TASD) in a statement Thursday.
The pension and age exemptions will also be increased from $45,000 to $80,000 each.
The new income threshold will apply for July 1-December 31, 2009, which means that for the rest of the year, individual gross earnings of up to $270,504 will be free of income tax, according to TASD calculations.
further increase:
On January 1, 2010, the income tax threshold will be further increased to $441,168, as announced by Finance Minister Audley Shaw in April.
"The new threshold for these pensioners will be: age 55 to 65 will move from $265,000 up to $400,000, and for those over 65 years old, it will move from $310,000 up to $480,000. This will be a revenue loss (to the Government) of $128 million," Mr. Shaw informed the House.
Jamaica Corporate TaxThe general rate is 33 1/3 %, which applies to both subsidiaries and branches. Building societies are taxed at 30% and life insurance companies pay tax of 15% of net investment income. Life insurance companies also pay 1.5% on premium income.
A corporation established under the Companies Act of Jamaica is normally deemed to be resident in Jamaica. This also applies to branch operations of foreign corporations.
Residents are taxed on worldwide income. Nonresidents are taxed on their Jamaican-source income. Branches are taxed on the same basis as subsidiaries.
Taxation of dividends: Dividends paid by a company are generally subject to withholding tax at 33 1/3 % if paid to a corporate body. Subsidiaries of resident companies that are incorporated in overseas territories are taxed on dividends received in Jamaica.
Losses: Losses may be carried forward indefinitely. The carryback of losses is not permitted.
Withholding tax on Dividends: Dividends are taxed at 25% if received by individuals, and 33 1/3 % if received by a corporate body. Exemptions apply to dividends paid by a company listed on the Jamaican Stock Exchange to an individual recipient and on franked (i.e. redistributed) dividends received by a company and its shareholders. Rates on payments to nonresidents may be reduced by an applicable tax treaty.
Withholding tax on Interest: Subject to exemptions and lower tax rates under an applicable tax treaty, the tax rates are 25% for individuals and 33 1/3 % for companies.
Royalties: the tax rates are 25% for individuals and 33 1/3 % for companies on the gross amount before applicable treaty reduction, nonresidents may file a tax return of net income, claiming related deductions and receive a refund on excess taxes paid.
Branch Remittance Tax: There is no Branch Remittance Tax in Jamaica.
Transfer Tax: A 6.5% tax is imposed on the sales value of real property and shares. The sale of shares on the local stock exchange is exempt from transfer tax.
Tax year: Tax year is the calendar year
Jamaica Value Added Tax (VAT)The standard VAT rate in Jamaica is 16.5%, with some items (generally basic food) exempt or zero-rated.
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