Thu | Aug 17, 2017

Minimum business tax net widens

Published:Friday | June 26, 2015 | 6:00 AM

Companies exempted from income tax or otherwise operate under a income tax incentive regime are required to pay the Minimum Business Tax (MBT), a $60,000 levy that was first introduced last year.

The tax is payable in two equal instalments of $30,000 on June 15 and September 15 of each year.

The law governing the tax was amended on June 11, alleviating some professional firms of the liability. It also widened the net to cooperative societies, including credit unions.

All companies or other corporate bodies incorporated or registered in Jamaica, including overseas companies conducting business in Jamaica, must pay the MBT, including those exempted from income taxes.

Companies making a loss, as well as companies that are dormant are also liable to pay the tax.

Prior to the law's amendment, the tax applied only to persons earning gross revenue of $3 million or more. That threshold has now been raised to gross revenue of $5 million or more for individuals, including partners, carrying out a trade, vocation or profession, or business.

For individuals, the law distinguishes between revenue and salary, the latter being exempt from the MBT. Companies are required to pay the tax regardless of income.

Tax Administration Jamaica says, however, that new companies - that is, any company incorporated under the Companies Act for not more than 24 months - will be exempt from the MBT. Registered charities, international organisations subject to the Diplomatic Immunities and Privileges Act are also exempt.

avia.collinder@gleanerjm.com