Withholding Tax on Specified Services

The Ministry of Finance and Planning is advising that the Withholding Tax on Specified Services which took effect June 1, 2015 will be implemented on September 1, 2015. The Withholding Tax on Specified Services targets persons liable to income tax but are noncompliant
and/or may not be in the tax data base.

It is expected that this tax measure will result in a broadening of the tax base, increased compliance, improved revenue collection and ultimately lower income tax rates, which is a commitment under the Government's broader Tax Reform.

The Withholding Tax will be imposed on specified services at a rate of 3%. The taxpayer will be entitled to claim as a tax credit, the amount withheld in the year of assessment. However, any excess credit for that year of assessment may be claimed, as a refund or be carried forward to be utilised in a future year of assessment.

The Withholding Tax on Specified Services is being introduced on a phased basis; the first phase will be applicable to: accounting, auditing, catering, consultancy(professional service by persons who are not acting in the capacity of an employee), decorating, engineering (architectural, electrical, mechanical and structural), entertainment, information technology, janitorial, laundry, landscaping, legal, management, repairs and maintenance – to buildings and motor vehicles, the rental or leasing of motor vehicles or equipment, transportation of people and goods, haulage of goods or tours, as well as any other service specified by the Minister by order published in the Gazette.

Tax Withholding Agents (TWA) permitted to Withhold Tax on Specified Services are Financial Institutions regulated by the Bank of Jamaica (BOJ) and the Financial Services Commission (FSC), tourism operators, utility and cable companies with annual gross revenue exceeding five hundred million dollars($500,000,000), including any entity with such revenue that is exempt from the payment of Income Tax. Statutory Bodies/Authorities, Ministries, Executive Agencies or any Agency or Department of Government are also liable to withhold.