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Minister of Finance and the Public Service, Audley Shaw, today (July 8), signed a convention with Spanish Ambassador, Jesus Silva, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
At the signing, held at the Finance Ministry’s headquarters in Kingston, Mr. Shaw noted that the agreement was a very important and mutually beneficial arrangement, as it seeks to further advance the tremendous strides that have been achieved in terms of new economic relationships with the people of Spain.
“The signing of this agreement with the Government of Spain comes at a very critical juncture in our relationship. The fact is that Jamaica represents the ground for the most significant Spanish investments, in terms of the leading English speaking location in the Caribbean. And we have seen an aggressive investment over the past five years rapidly approaching 10,000 hotel rooms, which is not in any way insignificant,” he said.
Mr. Shaw said it was within this context that, “we put in place those initiatives (agreements) that would seek to further enhance the relationship that is blossoming and that clearly still has considerable potential for further growth.”
The Minister informed that Jamaica has signed about 18 double taxation agreements with countries such as the United Kingdom, the United States, Canada, Israel, Norway, Sweden, Switzerland, France, Germany, Denmark and China. He also noted that there was a multilateral agreement which has been entered into with CARICOM member countries.
In his address, the Spanish Ambassador pointed out that the signing of the convention has “heightened the relationship between the two countries,” and has shown the commitment of the Jamaican Government to facilitate investment.
Grace Rookwood, Commissioner, Tax Administration Services Department, in her remarks, said that the agreement “serves to encourage cross border investments, it removes the threat of taxation in foreign countries where you are doing business, followed by further taxation at home.”
A brief from the Ministry states that the agreement between Jamaica and Spain reflects the strong bilateral ties between both countries. Careful scrutiny has been given in the agreement to the areas of business profits, management fees, dividends, royalties and interest payments. Of significance is the protocol to facilitate exchange of information and tax examination between the two countries. The protocol outlines in detail how the tax authorities will accommodate, in a spirit of co-operation, requests for information on taxpayers. This is aimed at protecting against tax evasion by residents of both countries, while ensuring that the laws of both countries are upheld.
The objectives of the agreement are: to provide full protection of taxpayers against double taxation; to allow for the free flow of international trade and investment as well as the transfer of technology; and to prevent discrimination between taxpayers in the international field.
It also seeks to provide a reasonable element of legal and fiscal certainty as a framework within which international operations can be pursued; and to foster co-operation between the tax authorities, thus enabling them to carry out their duties more effectively.