Income tax in Jamaica
June 26, 2017
Residents are taxed on their worldwide income. Married couples are generally assessed and taxed separately. However, married taxpayers may file for an Election of Joint Assessment, so that their income will be taxed jointly.
Income is classified into the following categories: (1) income from trade, business, and profession, (2) income from property, including rents and premiums, (3) dividends and other distributions, and (4) interest, discounts, annuities, pensions or other annual or recurring sums.
Resident individuals are taxed at a flat rate of 25%. Residents are entitled to tax-free amounts, the income tax threshold is JMD1,500,000(US$11,539) as of 01 April 2017.
Individuals who earn income exceeding JMD6 million (US$46,154) per annum are subject to income tax at a flat rate of 30%.
Rental income is taxed at 25%. Income-generating expenses such as land and property taxes, repairs and maintenance costs, interest payments on mortgage, and depreciation are deductible from the taxable income.
No capital gains tax is levied in Jamaica.
However, capital gains earned from selling property that are considered business income may be subject to income tax.
Stamp Duty on Transfer of Real Property
Stamp duty is levied at a flat rate of 4% on transfers of real property owned by individuals.
Real Property Tax
Real property taxes are computed on the basis of the unimproved value of the land, which is essentially the property’s market value as determined by valuations office.
REAL PROPERTY TAX
|TAX BASE, JMD (US$)||TAX RATE|
|Up to 300,000 (US$2,307)||JMD1,000 (US$8)|
|Over 300,000 (US$2,307)||0.75%|
When more than one person holds possession of taxable land, there is a joint liability for the payment of property tax.
Parochial Property Tax
Parochial property taxes are under the jurisdiction of parochial or local governments. The tax base is computed on the basis of the unimproved value of the property, which is essentially the property’s market value as determined by valuations office. Applicable tax rates vary, depending on the rulings of the local governments.
Income and capital gains earned by companies are taxed at a flat rate of 25% for unregulated companies and a flat rate of 33.33% for regulated companies. Income-generating expenses are deductible when calculating taxable income.