Jamaicans Who Work Overseas Are Required to File Tax Returns


Director General for Tax Administration, Clive Nicholas is reminding persons who live in Jamaica but work abroad that they are required to pay taxes on their world income and need to file returns by March 15.
Explaining, the Director General said that persons who reside in Jamaica on a part-time basis but on occasion work abroad, were required by law to include all their income, even the foreign income, when computing their tax obligation.
“In other words”, Mr. Nicholas said, “if you work six months in Jamaica and you are a resident here and you go abroad for three months and you work an income, when you have to file your returns on the 15th of March, you are required to include all incomes, including the foreign income”.
According to the Director General, many persons are not aware of this requirement but noted that this is obtained in the tax laws of most countries.
He pointed out that the Tax Department received information from time-to-time from their treaty partner in the United States on the investment income that resident Jamaicans may earn in that country. As such, he is urging such persons to file their returns in order to escape penalty.
Speaking recently at a JIS Think Tank session, the Director General said that the double taxation treaty is a bilateral agreement that Jamaica has with about ten other countries. The agreement ensures that persons who live in Jamaica but work elsewhere do not pay income tax twice.
Clarifying, Mr. Nicholas said that if a resident Jamaican pays his taxes in another country where he his employed then he would not be required to pay income tax in Jamaica. However, if he pays no income tax in the country in which he is employed, then that person should pay his taxes in Jamaica.
Additionally, Mr. Nicholas said that if that person pays income tax in the country of employment at a rate that is lower than the 25 per cent rate required in Jamaica, then he or she is required to pay the difference in Jamaica. If however, the rate in the country of employment is higher than the 25 per cent tax rate that obtains in Jamaica and the taxpayer makes his income tax payment abroad, then he or she would not be liable to make any payment in Jamaica. He added that in territories like the Cayman Islands where no income tax is paid, a Jamaican resident working there is required to pay his income tax in Jamaica at a rate of 25 per cent.
In the meantime, the Director General observed that many expatriates with contracts for service in Jamaica do not live up to their tax obligation. He explained that these persons are usually paid their gross income and it is incumbent on them to pay their own income tax and other statutory deductions. However, he pointed out, many were not doing so.
Mr. Nicholas is therefore urging expatriates to treat the Jamaican tax system with the same regard as they would in their own countries. He also urged Jamaicans employed to embassies here to live up to their tax obligation and avoid interest penalties. According to Mr. Nicholas, these persons are also paid their gross emoluments from which they are required to meet their own tax obligation. However, many of them have not been responsible in doing so, he said.

JIS Social