Tax exemption for foreign businesses
BY BALFORD HENRY Observer senior reporter firstname.lastname@example.org
THE Government is seeking to lure foreign-owned companies to establish their group base here, with incentives such as income tax exemptions.
The initiative will exempt persons who are not Jamaican residents but perform group head office activities here from paying income tax. However, it will obligate the company to notify the finance minister, in writing, at least 90 days prior to the separation of any exempted employee.
Government is hoping that by facilitating the group head offices in Jamaica, other companies would realise the economic benefits, including increased foreign investments, access of alternative capital providers, new markets and the creation of jobs.
A Bill seeking to amend the Income Tax Act to give effect to this initiative was tabled in the House of Representatives yesterday by Minister of Finance and Planning Dr Peter Phillips.
The Bill defines an approved group head office company as a company or other body corporate that operates in Jamaica and other parts of the world and establishes its head office and performs, among other things, activities such as: supervision, management or monitoring of its operations; accounting, data processing, engineering and other technical support; centralised treasury management and similar funding activities; and other activities as are gazetted by the minister in Jamaica.
A company or other body corporate may apply to the minister, in the prescribed form and manner, for a certificate designating it as an approved group head office company. However, the Act seeks to restrict the grant of the certificate, unless the minister is satisfied that the applicant is incorporated or registered in Jamaica; is engaged in or proposes to engage in group head office activities here; and proposes to employ or has already employed 30 per cent or more of its employees to perform group head office activities from among citizens of Jamaica who are residing here.