|Jamaican Senate Passes Transfer Pricing Bill|
Jamaica passed amendments to the Income Tax Act to introduce a new transfer pricing regime in the territory. The new rules are aimed at empowering the Government to prevent tax leakage through transfer pricing. A draft Bill on this was tabled in the Parliament in May 2015.
According to the Minister of Justice, developing countries such as Jamaica are increasingly opening their borders to multinationals, and it is estimated that as much as two-thirds of cross-border business takes place among companies that are members of the same group. He noted that several local enterprises, which may not be part of a multinational, engage in intra-group transactions.
"Transfer pricing is a legitimate and necessary feature of the commercial activities of multinational enterprises. However, it is essential that countries are able to collect tax on the profits earned in their countries without discouraging of distorting international trade and investment," he said.
Regulations will stipulate that only taxpayers with an annual gross revenue turnover of USD500m will be asked to provide documentation upon request by the Commissioner General.
The Government intends to apply the new transfer pricing provisions to income tax returns for the 2015 assessment year. Taxpayers will be asked to provide a list of their related-party transactions at the time of filing their tax returns in March 2016.
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Published on our website on Dec.09, 2015