ey.com/globaltaxguides
Kingston GMT -4
EY
8 Olivier Road
Manor Park
Kingston 8 Jamaica
Principal Tax Contact
Juliette Brown
A. At a glance
+1 (876) 925-2501, +1 (876) 969-9000
Fax: +1 (876) 755-0413
+1 (876) 925-2501
Mobile: +1 (876) 835-3066
Email: juliette.brown@jm.ey.com
Corporate Income Tax Rate (%) 12.5/25/30/33⅓ (a)
Capital Gains Tax Rate (%) 0
Branch Tax Rate (%) 25/33⅓ (a)
Withholding Tax (%)
15/33⅓ (b)
⅓ (c)
⅓ (d)
Net Operating Losses (Years) Carryback 0
Carryforward Unlimited (f)
(a) Unregulated companies are taxed at a rate of 25%, and regulated companies (excluding life insurance companies and building societies) are taxed at a rate of 33⅓%. An unregulated company is a company that is not a regulated company. A regulated company is a company that is regulated by any of the following:
• Financial Services Commission (FSC)
• Office of Utilities Regulation
• Bank of Jamaica
• The minister with responsibility for finance Building societies are taxed at a rate of 30%. Companies operating under the Special Economic Zones (SEZ) Act are taxed at a rate of 12.5% on income earned within the definitions of the SEZ Act.
(b) The dividend withholding tax of 33 1/3% is a tax imposed on payments of dividends to nonresidents (the rate may be reduced by double tax treaties). A dividend withholding tax is also required to be deducted from dividend payments made by a Jamaican resident company to a Jamaican resident shareholder at a rate of 15%, unless the Jamaican shareholder is a Jamaican resident company that holds more than 25% of the voting rights of the distributing company. In such cases, the rate of income tax payable on the dividends paid is nil.
(c) This rate applies to interest paid to nonresident companies. Special rules apply to interest paid by prescribed persons (as defined). The withholding tax rates may be reduced under double tax treaties. The recipients of the payments must include the payments in taxable income reported on their annual income tax returns, and they may credit the tax against their annual income tax liability.
(d) This is a final tax that is imposed on payments to nonresidents. The withholding tax rate may be reduced under double tax treaties.
(e) This withholding tax applies to insurance premiums paid by residents to nonresidents. However, the withholding tax does not apply if a Jamaican resident insurance company registered with the FSC pays the premium to an entity that meets all of the following conditions:
• It is not a connected company.
• It is in the business of writing contracts of reinsurance in the international market.
• It is not acting on behalf of a captive insurance company.
(f) See Section C regarding a restriction on the loss carryforward.
B. Taxes on corporate income and gains
Corporate income tax. Companies are resident in Jamaica if the control and management of their affairs are exercised in Jamaica. Nonresident companies operating a branch on the island are taxed on profits derived from their Jamaican operations.
Tax rates. The standard rates of the income tax on profits are 33⅓% for regulated entities (excluding life insurance companies) and 25% for unregulated entities. Building societies are taxed at a rate of 30%. Life insurance companies are taxed at a rate of 25%. Companies operating under the SEZ Act are taxed at a rate of 12.5%.
Under the Betting, Gaming and Lotteries Act, the following are the amounts of the lottery tax payable:
• 25% of the gross weekly revenue derived from sales of lottery tickets with respect to a declared lottery
• 20% of the gross weekly revenue derived from promotion of a daily numbers game or instant lottery
Remittances overseas by branches of foreign companies are subject to branch remittance tax at a rate of 33⅓%. This rate may be different if a double tax treaty is in place.
The SEZ Act replaced the Free Zones Act (which provided certain tax benefits to companies that operated under that legislation; the act was repealed in 2015). However, under grandfathering provisions, companies that operated under the Free Zones Act were given a four-year period to transition to the new SEZ regime. Under the SEZ Act, chargeable income from a trade, vocation or profession of approved developers or occupants is subject to income tax at a rate of 12.5%. The income tax rate for approved developers or occupants may be reduced by a Promotional Tax Credit, which may be claimed for expenditure on research, development and trading.
Developers and occupants are exempt from income tax on profits derived from the rental of property in the SEZ, subject to certain restrictions. Dividend income is subject to income tax at a rate of 0%. Withholding tax of 0% applies to dividends paid out of profits from a profession or vocation in the SEZ.
Under the Urban Renewal Act, which was introduced to promote the improvement of depressed areas, approved entities may obtain various types of tax relief for development carried out in areas designated by the Jamaican government as special development areas. The tax relief relates to income tax, stamp duty and transfer tax.
Withholding tax on specified services. Recipients of specified services (as defined in the legislation) are required to withhold a 3% tax from payments made to suppliers of these services. The tax must be withheld if either of the following circumstances exist:
• The gross payment relates to a single transaction with an invoice value of JMD50,000 (approximately USD325) or more
Relief for losses. Losses may be carried forward indefinitely. However, each year, a loss carryforward may offset only 50% of the aggregate amount of income of the taxpayer from all sources after allowing the appropriate tax deductions and tax exemptions. However, the limitation does not apply in the following circumstances:
• For the first five tax years following the tax year in which the trade commenced
• If the taxpayer’s gross revenue from all sources for the relevant tax year is less than JMD10 million (this threshold is effective from 1 April 2019; the threshold was JMD3 million up to 31 March 2019)
A carryback of losses is not permitted.
Groups of companies. The law does not contain any group loss relief or consolidated return provisions.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax
Customs Administrative Fee; rates vary depending on the product Various Environmental levy; imposed on the Cost, Insurance and Freight (CIF) value of all imported goods with a few exceptions
General Consumption Tax, on the value added to goods and services; certain items are exempt
previously operating under the Hotel Incentives Act (HIA), but which now operate under the Fiscal Incentives Act
remaining under the HIA
for residential premises
supply in excess of 150 kilowatt hours)
Exports, government supplies and services of diplomats and international agents
Assets tax; on taxable value of assets Life insurance and other regulated entities
(Effective from the 2019 tax year, the assets tax for nonfinancial institutions was abolished.)
Property tax; on gross asset
First JMD400,000 of asset JMD1,000 Asset in excess of JMD400,000 up to JMD800,000; rate on excess
in excess of JMD800,000 up to JMD1,500,000; rate on excess
Asset in excess of JMD1,500,000 up to JMD3 million; rate on excess
Asset in excess of JMD3 million up to JMD4,500,000; rate on excess
Asset in excess of JMD4,500,000 up to JMD7 million; rate on excess
Asset in excess of JMD7 million up to JMD12 million; rate on
Social security contributions
National insurance scheme (NIS); imposed on annual earnings (income for self-employed individuals) up to JMD3,000,000 (JMD5,000,000 as of 1 April 2022); paid by
Human Employment and Resource Training program (HEART), on total payroll if it exceeds JMD173,328 a
E. Miscellaneous matters
Foreign-exchange controls. Jamaica does not impose foreignexchange controls.
Debt-to-equity rules. No debt-to-equity restrictions are imposed.
Foreign-controlled companies. Subsidiaries of nonresident corporations are subject to income tax on their profits at a rate of 25% for unregulated companies or 33⅓% for regulated companies. Withholding tax at a rate of 33⅓% is generally imposed on dividends remitted, unless a treaty provides a different rate.
Anti-avoidance legislation. Several anti-avoidance measures are in force. These measures generally apply to transactions between related parties that were not made at arm’s length.
Employment tax credit. A person other than a regulated company may be eligible to claim a nonrefundable tax credit (referred to as an employment tax credit [ETC]), up to a maximum amount of