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Jamaica: Tax Exemption for Officers of Foreign Company Headquarters

(Oct. 25, 2012) On September 26, 2012, <?Jamaica's Parliament approved the Income Tax (Amendment) Act 2012. The goal of the amended law, once it is formally adopted, is to encourage foreign companies to set up their headquarters in Jamaica. Regulations for the Act are expected to follow. (A Bill Entitled an Act to Amend the Income Tax Act (Bill), Houses of Parliament (Jamaica) website (last visited Oct. 23, 2012); Angelique Bart, Parliament Approves Bill to Promote Relocation of Head Office Activities to Jamaica, TAX NEWS SERVICE (Oct. 23, 2012), International Bureau of Fiscal Documentation online subscription database.)

Under the new provisions, non-resident officers of foreign companies can become exempt from Jamaican income tax. In order to qualify, the officers must apply to the Jamaican government for approval. (Bart, supra.) That approval will be given for foreign companies that:

· are incorporated in Jamaica;

· employ a staff that is at least 30% Jamaican; and

· perform group headquarter activities in the country. (Bill, art. 36F(2).)

Group headquarter activities are defined as including:

· supervision, management, or monitoring of company operations;

· accounting, data processing, engineering, and other technical support;

· centralized management of funds;

· business planning and coordination;

· the making of loans and provision of corporate finance advisory services;

· the holding of shares and receiving of dividends and management fees;

· the holding of trademark, patent, and other intellectual property rights;

· provision of staff; and

· other activities that may be specified by the relevant Ministry and announced through publication in the Gazette. (Bill, art. 2; THE JAMAICA GAZETTE.)