What are the Coporate Tax and Accounting Requirements in Jamaica?

Jamaica’s growing market for foreign investors and businesses is fueled by its strategic location, stable political environment, and well-established tourism industry. The government’s proactive measures to improve infrastructure and streamline business processes have contributed to the country’s attractiveness for international investments. Learn more about Tax and Accounting Requirements in Jamaica.

Before you start your business, It is crucial to understand the tax and accounting requirements in Jamaica. 

In this article, we highlight important accounting information and tax rates for achieving success in this market. Discover essential insights about doing business in this vibrant Caribbean nation.

See also: Company formation in Saint Lucia

Cost of Living in Kingston, Jamaica part 1, infographic by BIz Latin Hub for an article about Tax and Accounting Requirements in Jamaica
The Cost of Living in Kingston might affect the way you see Tax and Accounting Requirements in Jamaica

What are the tax rules in Jamaica?

A corporation residing in Jamaica is taxed on its income worldwide, while non-resident companies are taxed only on income generated within Jamaica. Tax, at a rate of 33⅓%, is applied to specific income sources like interest, dividends, royalties, and fees for non-resident corporations. However, if the recipient resides in a country with a double taxation treaty (DTT) with Jamaica, lower withholding rates may apply.

Tax and accounting requirements in Jamaica: Key local tax rates

Understanding the tax and accounting requirements in Jamaica is pivotal when starting a business in this market. Here are the tax rates you need to know. 

Income Tax: After considering any applicable tax-free allowances, Most people pay a 25% rate on their earnings, up to 6 million Jamaican dollars per year. If their income exceeds 6 million Jamaican dollars annually, the tax rate increases to 30%.

Corporate Tax: The current corporate income tax (CIT) rates are as follows: Regulated companies governed by entities such as the Bank of Jamaica or the Financial Services Commission, face a 33⅓% CIT rate. Building societies are taxed at 30%, life assurance companies at 25%, and unregulated companies operating within Jamaica at 25%. Specific organizations, such as pension funds and approved charitable organizations, are exempt from income tax as per the approval of the Commissioner General, Tax Administration Jamaica (TAJ).

General Consumption Tax (GCT): The standard GCT rate is 15%, but specific goods and services may have different rates. Telephone services and handsets face a 25% GCT, while hotels and tourism-related businesses pay an effective rate of around 10%. 

Asset Tax: A 0.125% ad valorem asset tax is applied to the ‘taxable value’ of assets belonging to deposit-taking institutions regulated by the Bank of Jamaica, as well as securities dealers, life assurance companies, and property and casualty insurance companies regulated by the Financial Services Commission.

Withholding Tax: Resident corporations pay a 15% tax rate while non-residents pay a rate of 33⅓.

Social Security: Employers must deduct and remit the specified contributions, along with Pay-As-You-Earn (PAYE) Income Tax for employees, by the 14th day of the following month.

Property Tax: In Jamaica, Property tax is assessed based on different value bands, with rates varying from 0.50% to 0.90%.

Cost of Living in Kingston, Jamaica part 2, infographic by BIz Latin Hub for an article about Tax and Accounting Requirements in Jamaica
The Cost of Living in Kingston might affect the way you see Tax and Accounting Requirements in Jamaica

Jamaica’s international tax treaties

Jamaica maintains a Bilateral Investment Treaty with the United States and has signed various double taxation agreements with countries such as Canada, China, France, Germany, and the United Kingdom. While not having a Free Trade Agreement (FTA) with the United States, CARICOM inked a Trade and Investment Framework (TIFA) in 2013. 

In 2014, Jamaica and the United States signed an inter-government agreement for reciprocal information sharing under the U.S. Foreign Account Tax Compliance Act (FATCA).

FAQ regarding tax and accounting requirements in Jamaica

Using our experience, we’ve identified common questions and worries our clients often have when dealing with accounting and taxes in Jamaica.

1. What is the corporate tax rate in Jamaica?

Depending on the type of business, the corporate tax rate ranges from 33 to 25%. 

2. How are businesses taxed in Jamaica?

A resident corporation is taxable on its worldwide income. Non-resident companies are subject to tax on Jamaican-sourced income.

3. What is the IRS called in Jamaica?

Tax Administration Jamaica (TAJ) is the name of the revenue authority in Jamaica. 

4. What is the accounting standard in Jamaica?

The Institute of Chartered Accountants of Jamaica (ICAJ) holds the authority granted by the Public Accountancy Act as the standard-setter in the jurisdiction. ICAJ has officially embraced and implemented IFRS and IFRS for SMEs as the prevailing accounting standards.

5. What is the CPA equivalent in Jamaica?

In Jamaica, the ACCA (Association of Chartered Certified Accountants) is widely considered the primary professional qualification for local accountants. Nevertheless, individuals with the CPA (Certified Public Accountant qualification) from the United States of America continue to enjoy high esteem among employers.

6. Are there restrictions on foreign investment or ownership?

Jamaica does not place restrictions on foreign ownership or control, and local laws treat investors, whether local or foreign, without distinction.

Biz Latin Hub can organize your tax and accounting requirements in Jamaica

At Biz Latin Hub, we provide an extensive range of market entry and back-office solutions in Latin America and the Caribbean. 

Our team has expertise in tax and accounting requirements in Jamaica, with legal services, accounting and taxation, hiring, and visa processing available. 

We have strong connections in the LATAM region through solid partnerships. This wide network gives us many resources to help with global projects and explore new markets in different countries.

Contact us today to learn more about our services and how we can help you achieve your business goals in Latin America and the Caribbean.

If this article about tax and accounting requirements in Jamaica interests you, check out the rest of our coverage of the region. Or read about our team and expert authors.

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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
David Wright
David Wright

David spent 22 years working for the British Diplomatic Service serving in various Latin American countries. He served twice in Colombia including acting as an advisor on regional security matters to the President of Colombia. Currently, he acts as a consultant for companies and governments on risk management, security and technology.

David is also involved in mining related companies, both in Executive and Non-Executive roles. Together with Craig Dempsey he set up Biz Latin Hub and now acts as its Non-Executive Chairman. David holds a Bachelors Degree in Astrophysics from Birmingham University and also studied at Brown University.

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