Its tax season! And for many SMEs, it’s a time of great trepidation. Your Tax returns are due on March 15, so let’s break it down for you.
According to Tax Compliance and Regulatory consultant Nicole Grant, most of the fear people experience during tax season, is associated with business owners not knowing or fully understanding the requirements, are unprepared, or unaware that tax is interest and penalty-heavy if not done properly.
Once you are a registered company, partnership, non for profit or business, you are required to file accurate and timely annual returns with the Tax Administration of Jamaica (TAJ). Having your business registered is essential to its operations. Registration allows you to open a business bank account, access loans, and be eligible for government benefits – just to name a few of the perks.
WHAT YOU WILL NEED
Your tax returns are due every year at the same time, so streamlining your operations will make March easier for you.
Whether you are going to do it yourself or hire a consultant, here is what you need to have in order.
- Your company’s income for the year- that is, how much money has come into the business? Grant advises business owners to run everything through a business account. That keeps accurate information in one place.
- Details of your expenses.
- A list of all the assets associated with your business. This includes a motor vehicle and even a cell phone that you use to conduct your business. These will qualify you for a capital allowance (which is simply a reduction in the amount of tax you are required to pay).
- Annual Tax Returns are now done electronically, so first you need to sign up and register for an eServices account on the TAJ website: https://www.jamaicatax.gov.jm/web/guest/do-business. If you already have a TAJ log-in in, you won’t need to do this again. However, you will have to apply for the tax ledgers to be opened.
- Once you have logged in, it is important that you ensure you are clicking on the correct year.
- Individuals who have a business name, are required to file the SO4 and SO4A form. The form will ask you to input your gross income, business expenditure stating If you are a retail business (buy and sell).
- If you are employed but also operate a business on the side, you need to request a P24 from your employer, declaring your employed income and taxes already deducted. This is important as it means your NHT benefits increases as does your NIS contribution (remember your NIS contribution is basically compulsory savings for retirement).
- If you are a Limited Liability Company (with Ltd. on your company name), you will also need to complete a ITO2 and ITO7 form.
- If you have a business that has an income over $10 million, you should also file your GCT returns monthly (this requires a registration process with the TAJ).
- If you have employees, you need to file your SO1 which you should have been doing monthly and then your SO2 annually, due on March 31.
In all the steps it is very important that you read the information on the website very carefully. This will help avoid mistakes that can be costly.
If you are involved in trading goods, you need to file for your Trading License which is due on March 31. The information required for this is your total sales for the year which must match the income that was submitted in filing your annual return forms.
Still feeling overwhelmed? Consider getting help from a qualified Tax Compliance Consultant.
Nicole Grant is a Compliance Consultant who owns and operates the compliancy firm Executive Compliance and Regulatory Services.The business provides compliancy service to several Jamaican and International business owners, providing: Tax Compliance Certificates, TaxAdministration Jamaica form preparation, Payroll Service, Company Incorporation and Business Registration.
Educated in Jamaica, USA and London, she has over 21 years’ experience with companies such as Petroleum Corporation of Jamaica, Jamaica Public Service, Boleck Jamaica (Auditors) and PriceWaterHouseCoopers. She has also worked in New York and London Brokerage firm CreditEx as Executive Manager before returning to Jamaica in 2007 to start her own businesses.Executive Compliance & Regulatory Services 876-470-7333/876-925-1765 ecrserv@