Inland Revenue Division Trinidad House St.

Vincent Street PORT OF SPAIN

TEXT PREPARED BY INLAND REVENUE 2012

Your Tax Dollar$ Build

Trinidad & Tobago

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MISSION STATEMENT
To Promote and Foster Voluntary Compliance with the Tax Laws and Regulations by: Providing quality customer service and education Improving our employees welfare, knowledge, skills and attitudes Applying the Tax Laws effectively and efficiently with fairness and integrity within an atmosphere of mutual respect.

Ministry of Finance Inland Revenue Division

This booklet serves as a guide to the Small Business Person and in no way is it intended to be a substitute for the tax laws of Trinidad & Tobago. It briefly outlines the rights and responsibilities of the small business person. This term includes the sole trader, proprietor, self-employed individual and partners within a partnership.

Inland Revenue Division Changing the way we interact with people visit us at our website www.ird.gov.tt Telephone: 623-2981 ext. 321, 431, 432 Fax: 624-3903

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YES, YOU are a Small Businessperson!!!!!!

Vendor Attorney

Accountant Partnership

Medical Practitioner

Mechanic

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Initial Contact with the Inland Revenue Division Registration Definitions Total Income Allowable Deductions Chargeable Income Employer Employee Emolument Income Designer Business Records Purchases Book Sales Book Record of Expenses Stock Sheets Wages and Salaries Book Debtors and Creditors Ledgers Asset Register Income Types of Income Rent Dividends Capital Gains

Hair Consultant

Business Expenses Wear and Tear Rates (Seventh Schedule) Balancing Charge/Allowance Calculations Acquisitions Disposal Private use of an asset Caterer

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(vii) CONTENTS Other Deductions/Allowances Human Resource Development Promotional Expenses Deductions as a Resident Individual Computation of Chargeable Profit

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CONTENTS Penalties Under the Income Tax Act Administrative Specific Offences General penalty Other Measurers

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Taxes Income Tax Tax payment on both Non-Emolument and Emolument Income Business Levy Green Fund Levy Health Surcharge Other Taxes Withholding Tax Rates of Withholding Tax w.e.f. 01.01.08 Relief in Cases of Double Taxation Hotel Accommodation Tax Definitions Tax Authority Final Statements Loss Relief

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34 34 35 36 36 37

Who Should File PAYE System

The Income Tax Audit Objection of Assessment

-1 INITIAL CONTACT WITH THE INLAND REVENUE DIVISION Registration- The small businessperson including the partners in a partnership and the partnership should register for the following at the Registration Unit of Inland Revenue Division: BIR Number-(Individual)
Submit a copy of the Certificate of Registration the Registrar General(if a Trade Name is registered) and a completed application form. A file number will be assigned after the taxpayer is interviewed and provides all pertinent data. This number, unique to the taxpayer, will be issued to him once and should be quoted in all communications with the Inland Revenue Division. This number is also used when making payments in respect of quarterly instalment of Tax, Business Levy and Health Surcharge for the small businessperson. BIR Number-(Partnership) (a)

-2DEFINITIONS Total Income means the aggregate amount of income under Section 5 of the Income Tax Act before allowing any deductions other than those under Section 10, 11, 16 and Income Tax (In Aid of Industry) Act. Allowable Deductions means any deduction allowed in accordance with the Income Tax Act in determining a persons chargeable income. Chargeable Income for the purposes of a person, whose sole source of income is from an office or employment, means the total emoluments of the person for the year of income less the appropriate deductions and exemptions granted under the Income Tax Act. Employer means any person paying emoluments whether on his own account or on behalf of another person to an employee, and shall be deemed to include any person paying emoluments whether on his own account or on behalf of another person, to the holder of an office. In relation to an employee or officer, employer means the person from whom the employee or officer receives his remuneration. Employee means any person, not being the holder of an office, in receipt of emoluments. Emoluments means all salary, wages, bonus, overtime, remuneration, perquisites, including value of board or lodging, stipend, commission or other amounts for services, directors fees, retiring allowances or pensions, arising or accruing in or derived from or received in Trinidad and Tobago and which are assessable to income tax, but shall not include any salary or share of profits arising from a trade, profession or vocation carried on by any person either by himself or in partnership with any other person.

(b)

Where the business is to be conducted as a partnership, the partnership is also required to have a BIR file number, which can be obtained by submitting the completed application form, a copy of the Certificate of Registration and a list of the names, addresses and file numbers of all partners. (Each partner is required to have a BIR file number. If there is none the procedure at (a) above applies.)

PAYE Number(c) If you are going to employ staff, you are also required to have a PAYE Account No. Where possible this number should be applied for at the same time as the BIR number. This number is to be used when remitting deductions made in respect of PAYE and Health Surcharge from the salary/wages of your employees. This number is different from the sole proprietors Board of Inland Revenue file number (it will be preceded by the letters PYE). VAT Number(d) Where the gross annual income/sales of the business exceeds $360,000, the person must register for Value Added Tax (VAT). See our booklet Guide to Value Added Tax for details.

-3BUSINESS RECORDS The Income Tax Act [Section 116(i)] requires every person engaged in any trade, business, profession or vocation to keep proper records and books of accounts, including records of annual inventory (stock). These records must be kept*in the English Language *at the place of business or at the residence of the proprietor *in T&T currency *in such a form that provides necessary information that enables the Board to determine the correct tax liability. If a proprietor finds it necessary to keep his records at a place other than his business place or residence, he must apply to the Board of Inland Revenue for prior approval. The Board will not give approval for the records and books of accounts of a business to be kept in any country other than Trinidad and Tobago. Where a person fails to keep adequate records, the Board may require him to keep such books and accounts and records which it may specify and that person is required to comply. Required Records for each financial Period (1) Purchases Book Used to record all purchases (stock) for the business.

-4Example: If rent/mortgage is paid by a proprietor for a property, which he uses both for operating a business and as his private residence, only that portion of the rent applicable to the business venture is deductible as an allowable expense for income tax purposes. No deduction shall be allowed from the income, in respect of rental payments incurred for the purposes of the production of income unless information relating to such payments and to the payee is furnished to the Board in a form approved by the Board. The relevant schedule on the Tax return must also be completed. Other such expenses include Telephone, Electricity and Motor Vehicle. (4) Stock Sheets An inventory of items of stock on hand may be prepared periodically during the year, but must be prepared at the end of the financial period. The stock on hand that has been counted should be valued on the basis of lower of cost or net realisable value. The method of stock valuation should be consistent, as the value of closing stock will become the figure for opening stock in the succeeding year. If the method of valuation is changed at any time during the accounting period, the Board will require both opening and closing stocks to be valued on the new basis. (5) Wages and Salaries Book

(2) Sales Book Used to record all business sales on a daily basis. (3) Record of Expenses Used to record details of all business expenses (other than purchases) incurred. Expenses, which relate to the proprietors private affairs, must not be charged against the profits of the business.[See page 11]

A record of salaries and wages paid to employees, including casual workers, must be kept. Where salary is paid in cash, the employees should certify in a salary record book or pay sheet that they received the emoluments stated. A record of Income Tax, Health Surcharge and NIS deductions must be kept. Employers are also required to keep on file TD1 Forms/Certificates of Approval submitted by all their employees. These should show all allowable (approved) deductions.

-5Proprietors salary: Salary paid to the proprietor of a small business is not allowed as a deduction for income tax purposes. Where the proprietor of a business makes such a deduction, the amount will be added to the net profit. Spouses salary: Salary paid to ones spouse who is employed in the business is an allowable expense, provided that the amount paid is reasonable for the type of duty performed. (6) Debtors and Creditors Ledgers Ledgers which show transactions with debtors and creditors. (7) Assets Register Record of all assets owned by the business. This will show (i) in the case of acquisitions- a description of the asset, serial number etc. and the date and cost of acquisition; (ii) in the case of disposalsthe date of disposal and proceeds of disposal. The information in this register will be useful in computing Wear and Tear at the end of each income year. Where plant and machinery or a building used exclusively to house such plant and machinery is acquired on or after 1/1/95, the asset is required to be placed into one of the four classes, A, B, C, or, D in accordance with the 7th schedule and Wear and Tear is to be computed on the value of the assets in the pool at the rate applicable to that class. With effect from January 01, 2006 assets acquired prior to 1995 must be placed into a class specified in Schedule Seven and the relevant percentage rate must be applied to the written down value to date to determine the Wear and Tear Allowance on such assets. Also effective 2006, Wear & Tear Allowance is allowed at the rate of 10 % on the reducing balance of the capital expenditure incurred in the construction of or improvement to a building/structure completed on or after 1/1/95 and used in a trade, business, profession or vocation for the production of the income INCOME Types of Income There are two types of income-

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Emolument See Definitions on page 2. Non Emolument Income This is derived from trade or business. It includes profits from trade/business, professional practice; royalties, rents dividends, short-term capital gains etc. (Section 5 of the Income Tax Act refers) Rents Unless an exemption from income tax has been granted for rental income by the Minister responsible for Housing, the income from rents, premiums and other profits from the letting of property is taxable income. Where approval of the Minister responsible for housing has been granted, the exemption as to rents shall apply only where the monthly rental income in respect of(a) an unfurnished letting is $750 or less; (b) an unfurnished letting, in connection with which services are provided, is $825 or less; (c) a furnished letting is $900 or less; (d) a furnished letting, in connection with which services are provided, is $975 or less.

The exemption with respect to the above-mentioned rents is void where the monthly rental exceeds the above-mentioned levels in any month of the year whether payable to the owner or to any other person. Furnished Letting, means a house rented with furniture consisting of a stove, a refrigerator, and bed and living and dining room furniture. Service includes any utility for which the landlord pays the supplier of that utility.

-7Where the income from the property is exempt under the Housing Act, a Certificate of Exemption must be submitted with each Income Tax Return filed. The Ministry of Housing determines the validity of applications for exemption and issues the Certificate of Exemption. Where such a certificate has been issued, the taxpayer is still entitled to deduct the related expenses even though the rent received for the property will not be brought into charge for income tax purposes. Dividends From 1995 dividends other than preference dividends paid by a resident company (listed and unlisted) to a resident individual are exempt from tax. Preference dividends, however, continue to be subject to the 15% tax at source. The remainder is deemed not to be income to the individual for tax purposes. With effect from January 1, 2004 interest payable on dividend to a resident individual is exempt from tax. Capital Gains Any gain, which accrues on the disposal of certain assets within 12 months of acquisition, is taxable and should be declared in the Income Tax Return using the relevant schedule. Adequate records on the date of acquisition and purchase price, together with the date of disposal and selling price, should be kept. Assets that are exempt include:

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1. Currency other than Trinidad and Tobago currency where acquired for personal expenditure abroad by the taxpayer or his family or dependants (including expenditure on the provisions or maintenance of any residence outside Trinidad and Tobago). 2. Sums obtained by way of compensation or damages for any wrong or injury suffered by an individual in his profession or vocation. 3. Winnings from betting lawfully carried on under or by virtue of the provisions of the Gambling and Betting Act, 1973 including pool betting and lotteries or games with prizes. 4. Gains accruing on the disposal of an asset by an individual or a company, which, under the provisions of the Income Tax Act or of the Corporation Tax Act, is exempt from tax. 5. Gains accruing on the disposal of any security in Trinidad and Tobago. 6. Gains accruing on the disposal of (a) Private motor cars; (b) Household goods; (c) Owner-occupied houses disposed of for $5,000 or under. In computing the Capital Gains, which can arise on the disposal of an asset, allowable deductions include: (i) Cost price (money or moneys worth) of the asset, together with other expenses incidental to the acquisition, including legal fees, stamp duty, advertising or the amount incurred in providing the assets; Any expenditure wholly and exclusively incurred in enhancing the value of the assets, provided that such improvements are evident and effective at the time of disposal (maintenance expenses are not allowable deductions);

Assets, which are chargeable to Short Term Capital Gains Tax, are all forms of property whether situated in Trinidad and Tobago or not. These include: (a) (b) (c) Options, debts and incorporeal generally; Any form of property created by the person who is disposing of it, such as goodwill, patents and copyrights; Any currency other than the currency of Trinidad and Tobago. (ii)

-10-9(iii) (iv) Any expense incurred in establishing, preserving or defending his title to, or to a right over, the asset; Costs wholly and exclusively incurred on the disposal of an asset, e.g. legal fees and agents fees. Losses under this head should also be declared by completion of the relevant schedule of the Income Tax Return. Such losses may be set off against capital gains in the same year of income. Any excess of losses over gains is not deductible from other sources, but may be carried forward to be set off against capital gains in subsequent years. Business Expenses may include, but are not limited to, the under mentioned: Accounting Charges Advertising Travelling Expenses Rents Paid Electricity Entertainment WASA Rates Insurance Premiums Telephone Licencses Management Charges Bad Debts Interest, Bank Charges Stationery/Postage Wages & Salaries Wear & Tear *Motor Vehicle operating Expenses * (75% of these expenses are allowed)

TYPES OF INCOME The Small Businessperson is generally charged tax each year on his nonemolument income subject to the provisions of the Income Tax Act. The person who receives both Non- Emolument and Emolument Income may be required to pay tax on both types of income. Where the Non Emolument income exceeds 25% of the total income, the person is required to pay quarterly instalments on such income. The Small Business Person must include the income received from all sources on his annual income tax return. BUSINESS EXPENSES A Small Business Person is allowed business expenses as a deduction in order to calculate his chargeable profit/income. Business expenses are the expenses incurred in the production of the income of the business, therefore the personal and private expenses of the Small Business Person are not allowed in determining the chargeable profit/income of the business.

Rental/Interest on Mortgage Loan Where a person carries on a business at his place of residence and incurs an expense for rent or interest on a mortgage loan for acquiring the property, he is entitled to claim a business expense for rent or interest on Mortgage in the ratio of the use of the property comparing business to residential use. * Expenditure on repairs is only allowed where the repairs undertaken pertains to the area used for business purposes. Lands and Buildings Taxes Claims for Mortgage Interest paid will not be allowed without proof of payment of Lands and Buildings Taxes for that year. Wear & Tear Wear & Tear is allowed as a Business Expense. It allows the individual to write off the cost of the asset over it life cycle. The rates accepted are outlined. NB. The wear and tear allowance will not be granted unless the Board is satisfied that Land and Building taxes have been paid for that year.

-11The Seventh Schedule is reproduced for your guidance.

(Sec. 11A of the I.T.A.)

-12Ice Company Plant Refrigerator Irrigation Water Supply Lighters Medical Practitioners Instruments Medical Practitioners Radium Plaques and Needles Motor Boats Newspaper Equipment Linotype metal Newspaper Equipment Stereos and Blocks Newspaper Equipment Type Office Machines and Equipment Addressograph Office Machines and Equipment Cash Registers Office Machines and Equipment Dictaphones Office Machines and Equipment Proof Machines Banks Office Machines and Equipment Telephones PBX Systems Photography Equipment Poultry Farmers Eggboxes and Fillers Poultry Farmers Egg Grader Radio Transceiver Sets Road-making Plant Utensils for drawing Safes Scales Weighbridge 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

SEVENTH SCHEDULE
CLASS A (WEAR AND TEAR RATE) 10% Adding Machines and Calculators Manual Billiard Tables Boats Barges Boats Lighters Boats Motor Boats Pontoons Boats Punts Boats Rowing and Sailing Brick-making Plant Walls and Windbreak Buildings (Housing machinery) Industrial Buildings (Housing machinery) Other Building, structures and improvements thereon completed on or after 1st January, 1995 Industrial building structures under the Income Tax (In Aid of Industry) Act acquired prior to 1st January, 2006. Calculating Machines Hand-operated Cameras Cash registers Manual Cigarette Manufacturing Machinery Cigarette Tools and Equipment Cigarette Papers Cutting and Folding Plant Coffee Manufacturing Cylinders Gas Dentists Fittings Dentists Instruments Dictaphones Doctors Instruments Filing Cabinets Fire Extinguishers Fixtures and Fittings Furniture Household Hydraulic Jacks 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

CLASS B (WEAR AND TEAR RATE) 25% Accounting Machines Adding Machines and Calculators Electrical Adding Machines and Calculators Manual Aerated Water Plant Bottling Plant Air-conditioning Equipment Large General Unit Air-conditioning Equipment Single Units Aircraft Commercial New Arc and Gas Welding Plant Automotive Equipment Bakers Plant Beverage Coolers Bicycles Motor Bicycles Ordinary Commercial 25 25 25 25 25 25 25 25 25 25 25 25 25

-13Billiard Tables Biscuit-making Plant Boats Barges Boats Launches Boats Lighters Boats Motor Boats Pontoons Boats Punts Boats Rowing and Sailing Boats Sloops and Streamers Ocean-going Boats Tugs Boilers Engines, Shafting Boilers General Binding Machinery and Plant Boilers Bookbinding Plant and Machinery Boilers Boot and Shoe-making Boilers Boot and Shoe-making Box (Cardboard) Manufacturers Machinery Boot and Shoe-making General Plant and Machinery Boot and Shoe-making Motor Vans and Lorries Brewery Plant Brick-making Plant Grog Crusher Brick-making Plant Railway Siding Brick-making Plant Traxcavator Brick-making Plant Tunnel Kilns and Dryers Brick-making Plant Walls and Windbreak Bucket Elevator Quarrying Buildings (Housing machinery) Industrial Buildings (Housing machinery) Other Calculating Machines Electrical Calculating Machines Hand-operated Cameras Caravans Mobile Site Office Carpets (Cost over $500.) Cash registers Manual Cement and Concrete Tile Manufacturing Plant Cigarette Manufacturing Machinery Cigarette Tools and Equipment Cigarette Papers Cutting and Folding Plant Clothing and Millinery Manufacturing Plant 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

-14Clothing and Millinery Other Plant Clothing and Millinery Sewing Machines Coconut Oil Manufacturing Plant Coffee Manufacturing Cold Stores and Ice Manufacturing Ice Cans Cold Stores and Ice Manufacturing Machinery and Plant Compressors Air and Oxygen Types Compressors Ammonia Horizontal Compressors Ammonia Vertical Concrete Mixers Confectioners Machinery Containers-makers Plant Copra Cotton Knitting and Spinning Plant Cylinders Gas Dentists Carpets Dentists Electric Motors Dentists Fittings Dentists Furniture Dentists Instruments Dentists Plant Dictaphones Dies Diesel Engines and Motors Distillery Plant Doctors Instruments Dredges Drying Kilns Dumpers Quarrying Electrical Fittings Elevators and Lifts Engineering Works Filing Cabinets Fire Extinguishers Fixtures and Fittings Furniture Household Furniture Office Ice Company Plant Coils Generators 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

-15Hollman Compressors Hydraulic Jacks Ice Company Plant Cold Storage Plant Ice Company Plant Fabric Inserted Matting Ice Company Plant Factory Plant and Machinery Ice Company Plant Ice Breaker Ice Company Plant Ice Crusher Ice Company Plant Refrigerator Ice Company Plant Water Filter Irrigation Water Supply Laundry Plant General Plant Laundry Plant Washing Machines Lifts and Elevators Lighters Live Network Lorries (Motor) Loudspeakers and Phones Match Factory Plant Medical Practitioners Diathermy Plant Medical Practitioners Electro-Cardiograph Medical Practitioners High-Frequency Current Machines Medical Practitioners Instruments Medical Practitioners Ophthalmic Surgeons Plant Medical Practitioners Other Plant Medical Practitioners Radium Plaques and Needles Medical Practitioners X-Ray Plant Milk Treatment Plant Millinery Manufacturing Plant Other Plant Millinery Manufacturing Plant Sewing Machines Mobile Site Office Caravan Molasses Industry Concrete Sump and Gear Molasses Industry Mill Storage Molasses Industry Pipe Lines Molasses Industry Pumps Molasses Industry Punts Molasses Industry Storage Tanks Motor Boats Motor Cars and Vehicles Neon Signs 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

-16Newspaper Equipment Boilers Newspaper Equipment Engines and Shafting Newspaper Equipment Linotype metal Newspaper Equipment Printing Machines Newspaper Equipment Stereos and Blocks Newspaper Equipment Type Office Machines and Equipment Accounting Machines Office Machines and Equipment Adding Machines Office Machines and Equipment Addressograph Office Machines and Equipment Calculating Machines Office Machines and Equipment Cash Registers Office Machines and Equipment Dictaphones Office Machines and Equipment Duplicating Machines Office Machines and Equipment Proof Machines Banks Office Machines and Equipment Telephones Office Machines and Equipment Typewriters Oxygen Acetylene Plant Oxygen Manufacturing Plant PBX Systems Photography Equipment Plastic Extrusion Machine Poultry Farmers Egg Grader Poultry Farmers Eggboxes and Fillers Poultry Farmers Incubators Printing Press Pumps Quarrying Plant and Machinery Radio Equipment Radio Transceiver Sets Radios, Radiograms and Phonographs Railway Sidings Refrigerating Plant and Machinery RHF Welding Machine Road-making Plant Asphalt Plant Road-making Plant Barbergreen Finisher Road-making Plant Crawler Loader Road-making Plant Loader Road-making Plant Motor Dumper Road-making Plant Office Machinery 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

-17Road-making Plant Rollers and Steam Road-making Plant Service Cars Road-making Plant Special Tools Road-making Plant Utensils for drawing Rum Refinery Plant Safes Scales Weighbridge Sea-craft Sewing Machines Ship-building Plant Shop Fittings Steel Barrels Stone Crushing Plant Sugar Industry Boilers, Auxiliaries, Steam Piping Sugar Industry Distilling Plant Sugar Industry Drainage and Irrigation Plant Sugar Industry Factory Television Sets Transformers Typewriters Vacuum Cleaners Vulcanizing Machine Water Coolers Water Tanks and Pumps Weighbridges Welding Units Wireless Sets 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 Cranes Gantries Cutlassing Machine Farming Equipment Forklift Trucks Rigs (Oil) Road-making Plant Jitney Road-making Plant Spray Trucks Computers

-1833.3 33.3 33.3 33.3 33.3 33.3 33.3 33.3

CLASS D (WEAR AND TEAR RATE) 40% Aircraft Engine Props Rotable Spares Aircraft Second-hand 40 40

BALANCING CHARGE/ALLOWANCE Calculations Whenever an asset on which Wear and Tear has been allowed during the course of its usage, is sold or disposed of at a price above or below the written-down value, a balancing charge or allowance, as the case may be, arises. Effective 1/1/98 Balancing Allowances shall not be made until there are no assets left in the pool. Balancing Charges shall not be made until the value in the pool results in a credit balance. Acquisitions

CLASS C (WEAR AND TEAR RATE) 33.3% Rate % Aerated Water Plant Bottles and Cases Agricultural Machinery Tractors, Ploughs, Harvesters, etc. Audition Unit Station and Testing Equipment Bulldozers Cranes Electrical or otherwise 33.3 33.3 33.3 33.3 33.3

In computing Wear and Tear Allowances, the value of acquisition of plant or machinery in a year of income shall be added to the written down value of the plant and machinery in the pool.

-19Disposal Where disposals are made during a year of income, the value of the plant and machinery disposed of shall be deducted from the written down value of the plant and machinery however: (i) in the event of a sale, the amount deducted shall be the proceeds of the sale of the plant and machinery or in event of loss or destruction of plant or machinery, the amount deducted shall be the money received by way of insurance or compensation.

-20OTHER DEDUCTIONS/ALLOWANCES
A person may, where applicable, also qualify for the following deductions and allowances as outlined in the Income Tax Legislation.

(ii)

Human Resource Development (up to 2006) A deduction for Human Resource Development became effective from January 1, 1999. A deduction shall be allowed in ascertaining the chargeable income of a person who has income from trade or business where expenses are reasonably incurred in the training and retraining of his employees up to 150% of the expenditure. Promotional Expenses Effective 1/1/94 individuals involved in Trade/Business who have incurred promotional expenses which were wholly and exclusively expended in order to promote the expansion of existing foreign markets for the export of goods produced in Trinidad and Tobago and shipped in commercial quantities, are entitled to a deduction equivalent to 150% of the promotional expenses actually expended. This also applies to Agricultural Produce manufactured/produce in T&T. A person entitled to this deduction is not allowed another deduction under Section 10 (Profit and Loss Account) in respect of the same promotional expenses. Promotional Expenses allowable are those incurred in respect of goods produced in Trinidad and Tobago. They are in respect of: advertising in foreign markets; providing promotional literature for overseas distribution; the participation in trade fairs, trade missions and similar promotional activities; overseas travel for the purposes of conducting promotional activities; providing free samples and technical information on products; inviting buyers to Trinidad and Tobago; the recruitment of specialist sales personnel, operating in foreign market for a maximum of two years. conducting foreign market surveys.

Private Use of Asset Where the asset is used for both business and private purposes, the pool must be debited with the cost of the asset equivalent to its business use. Where an asset is disposed of, the pool shall be credited with the same percentage being applied to the proceeds of disposal up to the original cost of the asset. Where assets are brought to the business from private use, the value to be applied will be the market value. If an asset from the business is appropriated for private use, the amount (credited) deducted from the pool will be the market value. In the case of any other event resulting in the cessation of interest in any plant/machinery, the amount to be deducted from the pool shall be the market value of the said item. In no circumstances shall the amount credited to the pool exceed the original cost of the said Plant and Machinery. Assets acquired prior to 1995 and not incorporated into a pool will be subject to balancing allowances/charges on an individual basis (up to 2006).

-21This deduction does not apply to expenses incurred in petroleum operations; expenses incurred in the export or the expanding of the export of goods/services or agricultural produce manufactured or produce to the following countries Antigua, Grenada, St. Kitts-Nevis, Barbados, Guyana, St. Lucia Belize, Jamaica, St. Vincent. Dominica, Montserrat,

-22COMPUTATION OF CHARGEABLE PROFITS In calculating the chargeable profits, a small businessperson is entitled to deduct all expenses wholly and exclusively incurred in the production of that income, from his total income/sales. All expenses claimed must be supported by proof of the expenditure eg. bills/receipt. Expenses that relate to the proprietors private use must not be charged against the profits of the business. Example Calculation of Chargeable Profit Total Income/ Sales Less: Business Expenses Net Profit Less: Personal Allowance Tertiary Education Approved Annuity Chargeable Income/Profits $375,000 $195,000 $180,000 $ 60,000 $ 50 000 $ 12,000 $ 58,000

DEDUCTION AS A RESIDENT INDIVIDUAL In addition to the business expenses, the Small Business Person is entitled to all other allowable deductions of the resident individual. These include deductions for: Personal Allowance Pension Contribution/Annuity Premium Alimony/Maintenance Payment First Time Home Owner Deduction (acquisition with effect from January 1, 2011) Tertiary Education Expenses (for external students only wef 2006) Deeds of Covenant There are also some Tax Credits ~ Venture capital ~ Installation of CNG Kit ~ Purchase of Solar Water Heating Equipment for household use

TAXES The Small Businessperson is required to pay his taxes to the Board of Inland Revenue in quarterly instalments each year. The types of taxes paid by the small businesspersons are Income Tax Business Levy Health Surcharge Green Fund Levy (Partnerships) Late payment of all taxes will attract interest at the rate of 20% per annum from the due date to the date of payment.

-23INCOME TAX This tax is charged on the chargeable profits of the business. It is calculated after allowing for Tax Deductions and Credit (if applicable) for the relevant income year. The basis of calculating the estimated amount payable in the current year is applying the tax rate to the chargeable income/profits of the previous year then divides it into four quarters. These payments are to be made on or before March 31 June 30 in each year of income. September December 30 31

-24Where a taxpayer is of the opinion that his business will produce an estimated chargeable income less than the chargeable income of the previous year, he may apply to the Board of Inland Revenue for a revision of his estimated chargeable income and the amount of tax he is required to pay by quarterly instalments. NOTE: Where he is of the opinion that the estimated chargeable income is likely to exceed or exceeds the chargeable income of the preceding year, the quarterly instalments must be paid on the estimated chargeable income of the current year of income. TAX PAYMENT ON BOTH NON-EMOLUMENT AND EMOLUMENT INCOME An individual, who is in receipt of both non-emolument income, (such as gains or profits from the operation of a trade or business, including income from partnerships or from the practice of a profession,) and emolument income (i.e. salary, wages, etc.), is required to pay tax by quarterly instalments, where the non-emolument income is more than 25 per cent of the total income. Example 2012 Emolument Income 7000 x 12 $ 84,000 Estimated non-emolument income (Profits) $ 50,000 Estimated Total Income $134,000 Less - Personal Allowance $60,000 - Pension&NIS Contr. $ 7,500 (67,500) Chargeable Income $ 66,500 Tax on Chargeable Income $66,500 x 25% Total Tax Liability $ 16,625 NB: Non-emolument income is more than 25% of total income. If we assume that the taxpayer is currently charged to tax on his emolument income, the quarterly installment to be paid = Profit from non-emolument income x 25% = $50,000 @ 25% - $12,500 Amount payable by quarterly instalments $12,500 = $3,125 4 NOTE: The difference in the tax liability and the quarterly instalment would have been deducted by the employer via the PAYE System.

Where, by the end of the fourth quarter, instalments paid are less than the tax liability disclosed in the tax return, (of the previous years) interest shall be charged on the difference between: (a) The tax liability on the chargeable income of the previous year of income plus 80% of the increase in the tax liability of the current year on the previous year of income; and The total amount paid by the end of the fourth quarter.

(b)

Where the estimated chargeable income for a year of income exceeds or is likely to exceed the chargeable income of the preceding year of income, a person shall make quarterly payments on the basis of the income in the current year. Example: Calculation of quarterly instalment (2012) Chargeable Profit (2011) Personal Allowance Estimated Chargeable Income Tax on Chargeable Income of $90,000 $90,000 x 25% Estimated Tax Payable Quarterly tax payable $22,500 4 $150,000 60,000 $ 90,000 $ 22,500 $ 5,625

Less:

The amount of $5625 is payable on or before March 31, June 30, September 30 and December 31, 2012.

-25BUSINESS LEVY Business Levy is a tax on the gross sales/receipt of a person, other than emolument income, in excess of $200,000. Gross Sales/Receipt incorporates all income received in the ordinary course of business activities before allowing any deductions for business expenses. The rate of Business Levy is 0.2% of the gross sales/receipts for each quarter of the current year of income. The Business Levy is due and payable on a quarterly basis on or before: March 31 June 30 in each year of income. Interest on short payment of Business Levy Where there is a short fall in payments of Business Levy, interest shall be charged on the difference between 90% of the Business Levy liability and the amount actually paid for each quarter. For late payment of Business Levy, interest will be calculated at 20% per annum from the date following the end of the quarter when the Levy liability became due, to the date of payment. Exemptions from Business Levy - Individuals. The Gross Sales or Receipts of a person which are exempt from income tax under any Act. The income of a person whose emolument income exceeds 75% of his total income. The Gross Sales or Receipts of a person, whose Gross Sales or Receipts in the proceeding year of income do not exceed $200,000, unless there are reasonable grounds to believe that the gross sales or receipts in that particular year will exceed that sum. September 30 December 31

-26 The gross sales or receipts of the business of a person who had not been in that business for three (3) years from the date his business commenced. COMPUTATION OF BUSINESS LEVY All persons liable to make Business Levy payments are required to compute both their Income Tax and Business Levy Liabilities. A person is entitled to a Tax Credit against his Business Levy Liability for a year of income, of any payment made in respect of Income Tax Liability for that year of income up to a maximum of his Business Levy Liability. To calculate the Business Levy, the Gross Sales or Receipts figures to be used are the current ones; estimation is to be used only for the last few days, (1 3 days) of the quarter. When an estimation is made for any period in a quarter and it is subsequently determined that the actual sales or receipts are more than the previously estimated figures, the difference of the Business Levy liability must be paid no later than the last day of the quarter following the quarter in which the estimation was made. Partnerships With respect to a partnership, the Individual Partners Share of the Gross Sales/Receipts must exceed $200,000 per annum to be liable for Business Levy payments. NB: The partners are liable to this tax, not the partnership. GREEN FUND LEVY
Green Fund Levy is also a tax to be paid on the gross sales/receipts of any company/partnership carrying on business in Trinidad and Tobago whether or not such business is exempt from Business Levy.

This rate of the Green Fund Levy tax is 0.1% of gross receipt/sales. The Sole Trader does not pay Green Fund Levy, however the organization of the Partnership is liable to this Levy. Green Fund Levy is paid using the Partnership BIR File number.

-27It is due and payable to the Board of Inland Revenue on a quarterly basis on or before: March 31 June 30, September 30 December 31 in each year of income. In ascertaining the gross sales or receipts of a quarter an estimate of the sales for the last 1-3 days of the quarter may be required. Where estimation is made and the actual sales of that quarter exceed the estimated figure, the short payment must be paid by the end of the quarter immediately following that quarter in which the sales or receipts were estimated. Interest on short payments or late payments. Where a company, which is liable to the quarterly payment of the Green Fund Levy, pays less than 90% of its liability at the end of the quarter; interest is charged at the rate of 20% per annum on the difference between the 90% of the liability and the amount paid. This interest shall accrue from the end of the quarter in which the liability occurred to the date of payment. N.B: In ascertaining the Chargeable Profits of a company, no deduction is allowed for any payments made to this Fund. Overpayment of the Green Fund Levy Where the Board of Inland Revenue is satisfied that a company has overpaid the levy in any quarter, the company is entitled to a refund of the excess tax paid. However, instead of making a refund, the Board may otherwise choose to apply the excess tax against any future liability and notify the company accordingly. NOTE: (i) (ii)

-28-

The Green Fund Levy shall be under the care and management of the Board of Inland Revenue. Company means an incorporated body, unincorporated association and includes a partnership. The partnership must therefore pay this levy using the partnership BIR Number.

HEALTH SURCHARGE Health Surcharge shall be charged and is payable a. by every employed person who pays or is liable to pay contributions under the National Insurance Act; and, b. by individuals other than employed persons who are liable to furnish a return of income. The following are exempt from the Health Surcharge provision (i) individuals under the age of 16 years; (ii) persons who have attained the age of 60 years; (iii) persons whose only source of income is from pension.

The rates at which the Surcharge payable are (i) Employed persons whose monthly emoluments are more than $469.99 per month or weekly emoluments more than $109.00 - $8.25 per week. All other employed persons - $4.80 per week. Individuals, other than employed persons, whose total income for the year averages more than $469.99 per month - $8.25 per week. All other individuals - $4.80 per week.

(ii)

-29An individual, other than an employed person, shall pay Health Surcharge to the Inland Revenue Division, on or before March June 31 30 September December 30 31

-30Rates of Withholding Tax w.e.f. 01.01.08 The rates of Withholding Tax shall be (i) on any distribution made 10 per cent; but where such distribution is made to a parent Company, the rate shall be 5 per cent; (ii) on any payment made to a person other than a company 15 per cent; (iii) on any payment made to a company 20 per cent; but where there is a Double Taxation Agreement in force or where an Order is made under section 96 of the Income Tax Act, (under which the President may vary the rate of Withholding Tax), the Withholding Tax shall be such lesser rate as may be therein provided. Relief in Cases of Double Taxation When Trinidad and Tobago concludes a double taxation treaty with the Government of any country, the President makes an Order and the arrangements specified in the Order shall, notwithstanding anything in any written law, have effect in relation to income tax. Trinidad and Tobago has negotiated the following Double Taxation Treaties: Country Order [Government Notice (G.N.) Legal Notice (L.N.)] Canada G.N. No. 164 of 1966 Denmark G.N. No. 148 of 1969 Norway G.N. No. 175 of 1969 United States of America G.N. No. 1 of 1971 Italy G.N. No. 278 of 1971 Switzerland G.N. No. 94 of 1973 *Associated States (Caricom) G.N. No. 16 of 1974 Federal Republic of Germany G.N. No. 194 of 1976 United Kingdom L.N. No. 162 of 1984 Sweden L.N. No. 172 of 1984 France L.N. No. 239 of 1987 India L.N. No. - of 1999 Venezuela L.N. No. 348 of 1997 Luxembourg L.N. No. 206 of 2001 China L.N. No. 134 of 2004 Spain L.N. No. 169 of 2009

Unpaid amounts at the due dates shall attract interest at the rate of 20% per annum. OTHER TAXES WITHHOLDING TAX This tax is deductible at source and is imposed on non-resident individuals and companies in respect of: a b distributions, e.g. dividends from a Company; any payment arising in Trinidad and Tobago where the recipient is not engaged in Trade or Business in Trinidad and Tobago, e.g. Interest, Royalties.

The law requires any person or company making any payment or distribution to a non-resident person or company to deduct and pay Withholding Tax to the Board of Inland Revenue within 30 days, in respect of the sum paid. Payment means a payment without any deductions whatsoever, other than a distribution with respect to (a) interest, discounts, annuities or other annual or periodic sums (b) rentals (c) royalties (d) management charges or charges for the provision of personal services and technical and managerial skills (e) premiums (other than premiums paid to insurance companies and contributions to pension funds and schemes), commissions, fees and licences.

-31NOTE: A distribution is: (a) any dividend paid by a Company including a Capital Dividend. It extends to a dividend paid by a Company out of a realised capital surplus; any other distribution of the assets of a company (whether in cash or otherwise) in respect of shares of the Company, except so much as represents the repayment of share capital, or is equal in amount or value to any new consideration given on the distribution.

-32Tax Authority The Tax Authority shall be the Board of Inland Revenue which, in respect of the collection and recovery of the tax, shall have all the powers as it has in relation to Income Tax under the Income Tax Act, Act No.5 of 1995. A tax called an Hotel Accommodation Tax shall be charged on the proceeds of the letting of hotel accommodation by an hotel operator at the rate of ten per cent (10%) of the proceeds of such letting, and collected by an hotel operator. Hotel Accommodation Tax is payable notwithstanding that the hotel is an approved hotel for the purposes of the Hotel Development Act, or is otherwise exempt from any other taxes, charges, impositions or levies by virtue of any other written law. The room tax shall be charged on the full amount of the proceeds of the letting without any other deduction or allowance than is authorized or allowed. The hotel operator is accountable to the Tax Authority for the tax and shall pay the tax on or before the last day of the month following that in which the tax is collected. Where the hotel operator fails to remit the tax, the hotel operator is liable for the payment of the amount of the tax due, in addition to interest on such amount at the rate of fifteen per cent per annum from the due date. Monthly Hotel Accommodation Tax Returns are mailed to the Hotel Operators. This is to be completed and submitted by the 15th day of the next month. The top portion is retained by the BIR and the bottom portion is stamped and returned to the taxpayer.

(b)

Withholding Tax must be deducted (without deductions for expenses) from the gross income received in respect of Rentals, Royalties, Management Charges for the provision of personal services and technical and managerial skills, premiums (other than premiums paid to Insurance Companies and Contributions to pension funds and schemes), other annual or periodic payments, interest on any debt, mortgage or other security and such other payments as may from time to time be prescribed. * Details re: Belize, Jamaica and St. Lucia may be obtained from the Withholding Tax Section of the Board of Inland Revenue. HOTEL ACCOMMODATION TAX Definitions Hotel means a building or group of buildings occupied together, comprising not less than six bedrooms for the purpose of providing hotel accommodation for reward. Hotel Accommodation means sleeping accommodation ad services and facilities ancillary thereto provided in a hotel for its guests, not being persons resident in the hotel under a contract of service. Hotel Operator means a person who, either by himself or through an agent or servant carries on the trade or business of operating a hotel.

-33SPECIMEN OF MONTHLY RETURN

-34FINAL STATEMENTS USED ON FILING INCOME TAX RETURN At the end of the trading year, final statements of accounts must be prepared in order to determine the profits or losses from the business. The information from these final statements must be submitted to the Board of Inland Revenue when the Income Tax Return is filed. Taxpayers who derive income from trade, business or profession must complete the schedules on the Tax Return Form. Trading, Profit & Loss Statement: This is the result of the trading, business or professional activity during the year. Balance Sheet: This is the financial position of the business at the end of the financial year or accounting terminal date approved by the Board of Inland Revenue. LOSS RELIEF

MINISTRY OF FINANCE Inland Revenue Division Hotel Accommodation Tax Return Hotel Accommodation Tax Returns are due on or before the 15th of the month following the month of deduction. Please allow 4 days for postal delivery.
Amended BIR No. Hotel Tax Id: Period Ending: Personal Information Change

Taxable Proceeds: 10% Tax: 15% Annual Interest: Amount Payable:

$ $ $ $

Name of Hotel Address Telephone # Hotel Operator Name: Hotel Operator Address: Hotel Operator BIR#: Hotel Operator Telephone #:

General Declaration I hereby certify that the information given in this return is true and correct. __________________ SIGNATURE _________________ JOB TITLE _________________ DATE

MINISTRY OF FINANCE Inland Revenue Division Hotel Accommodation Tax Return Acknowledgement

Where the amount of a loss incurred in a year of income from any trade, business, profession or vocation carried on by any person either solely or in partnership is such that it cannot be wholly set-off against his income from other sources for the same year, it shall, to the extent to which it is not allowed against his income from other sources for the same year, be carried forward and set-off against what would otherwise have been his chargeable income for succeeding years. However, no loss incurred by a person in any year of income from any of the following: (i) (ii) Farming, agriculture, forestry, fishing or other primary activity. The operation of mines or the exploitation of natural or mineral resources. Any other trade or business.

Name of Hotel Address BIR No. Pay As You Earn Period Ending:

Taxable Proceeds: 10% Tax: 15% Annual Interest: Amount Payable: -36-

$ $ $ $

(iii)

shall be set off in that year or any succeeding year against:

-35(a) Gains or profits from the practice of any profession or vocation or management charges for the provision of personal services and technical and managerial skills; (b) Gains or profits from any employment or office including pension, emoluments and any contribution of the employee paid by the employer on behalf of the employee, to an approved fund or scheme. WHO SHOULD FILE In accordance with the Income Tax Act, Chapter 75:01 the following persons are required to furnish an Income Tax Return: (a) (b) (c) every person liable to pay tax under this Act; every partnership; every person who in that or any previous year of income has made a loss which he may be entitled to claims as a deduction in the current year of income or any subsequent year of income; every person who derives any income from any source irrespective of the amount of such income; and every person who derives any income which would be charged to tax under this Act but for the provisions of any other written law exempts such income from the charge to tax.

-36The precedent partner is the one who, of the partners resident in Trinidad and Tobago (i) is the first named in the partnership agreement; or (ii) where there is no agreement, is named singly or first in the usual name of the firm; (iii) is the first named active partner where the partner whose name appears first is not an active partner. Each partner must report in his personal Income Tax Return, his share of the income received from the partnership, and attach a copy of the statement of accounts of the partnership.

PAYE SYSTEM The PAYE System is the method used to deduct taxes from employees salaries/wages. The Income Tax Act and the PAYE Regulations govern the PAYE System. REQUIREMENTS Where the Small Businessperson employs workers in the business, he has the responsibility of administering the PAYE System of tax deductions in respect of these employees. Each employer must register his business with the Registration Unit of the Inland Revenue Division for the purposes of being assigned a PAYE File Number as is required by the PAYE Regulations (see page1). This number is to be used when remitting Income Tax and Health Surcharge withheld from employees salaries to the Board. SEE PAYE BOOKLET FOR FURTHER INSTRUCTIONS

(d)

(e)

NOTE: The Small Business Person MUST file an Income Tax Return. Partnerships Where a business is jointly owned, the precedent partner will be held responsible for filing the income tax returns of the partnership. THE INCOME TAX AUDIT The Income Tax Audit is conducted by the Board to verify the information submitted in an Income Tax Return. Selection of an Income Tax Return for an Audit does not necessarily mean that the information is viewed as false or that claims will be disallowed. The

-37Board, however, is charged with the responsibility for collecting the correct tax payable by each taxpayer and must maintain a system to monitor taxpayer information relating to income and expenses. If, during the course of audit, the auditor realizes that a taxpayer has neglected to include valid claims, this will be drawn to the taxpayers attention and the necessary adjustment will be made to the taxpayers benefit. When his return is selected for audit, the taxpayer is informed of the date and time of the audit. Where the date and time appointed by the Board is inconvenient, the taxpayer may request a change. An Audit may be conducted at the offices of the Inland Revenue Division or at the Taxpayers place of business. The Board will determine the type of audit to be conducted and inform the taxpayer of the information which must be made available to the auditor. 1. OBJECTION OF ASSESSMENT The Income Tax Act requires the Board of Inland Revenue to make an assessment on every person who is liable to tax after such a person delivers a tax return to the Board. If a person disputes the assessment made, he may apply to the Board by a notice of objection, in writing, to review/revise the assessment, stating the grounds for such request. The request for the objection must be done within 15 days from the date of service of the assessment. The Board may accept a notice of objection outside of the time limit if it is satisfied that there is a reasonable excuse for making the application late. In reconsidering the assessment, the Board has the right to request additional information from the person disputing the assessment and to inform the person in writing of the results of its reconsideration. 2. Specific Offences

-38If a person refuses to supply the Board with the additional information it request, the Board may deem the original assessment to be final and conclusive. Where the Board fails to determine an objection made within 24 months after the service of the notice of objection, the objection shall be deemed to have been determined in the favour of the person who disputed the assessment.

PENALTIES UNDER THE INCOME TAX ACT Ch. 75:01 There are three categories under the Income Tax Act, Ch. 75:01: (i) (ii) (iii) Administrative Penalties Specific Offences General Penalty non compliance with requirements of the Act or Regulations on summary conviction in respect of particulars offences committed under the Act. Imposed on summary conviction failure to fulfil requirements of the Act.

Administrative

3.

General Penalty.

Administrative Sec. 76 S.S. (6) Failure to furnish a return of income for the year of income 1987 and subsequent years. Any person who fails, neglects or refuses to furnish a return of income for the year of income 1987 and subsequent years after six (6) months from the time required to file the return, shall thereafter in addition to any other penalty provided under this Act, be liable to a penalty of $100. for every six (6) months or part thereof during which such failure, neglect, or refusal continues.

-39Sec. 76 S.S.(7) Failure to furnish a return for any year of income preceding the year of income 1987. Any person who has not furnished a return of income for any year of income preceding the year of income 1987 and fails, neglects or refuses to furnish any such return on or before October 31, 1988 shall in addition to any other penalty provided in this Act, be liable to a penalty of $100. in respect of any such return for every six (6) months or part thereof during which such failure, neglect or refusal continues. Filing an incorrect Income Tax Return. Additional tax not exceeding the amount assessed by the Board provided that the taxpayer proves that the omission or incorrectness of the return was not due to fraud, covin, act or contrivance, or gross or wilful neglect. Sec 119 Sec 83(5) Neglect or refusal to file a return. Additional tax equal to three (3) times the normal tax (unless the taxpayer can prove that neglect or refusal was not without a reasonable cause). Failure to remit the P.A.Y.E. deducted will result in a penalty of 25% or $40.00 whichever is greater. General Penalty Sec. 121 Failure to file a tax declaration. Any person who fails to file a declaration is liable on summary conviction to a fine of $3000. Failure to deliver account of certificate of tax deducted or withheld. Any person, who fails to deliver an account or certificate to any person from whose emoluments the tax was deducted or withheld or to the Board for the purpose of accountability, is guilty of an offence and is liable on summary conviction to a fine of $75. for every day during which such failure continues. Sec. 76(5) Sec. 118(6)

-40Any person (officer who divulges confidential information with regard to any manufacturing process or trade secret obtained during the compliance of the provisions of Section 118 re Powers of Entry for certain purposes is liable to a fine of $15,000 or to imprisonment for twelve (12) months. Interference with anyone doing anything he is authorised to do under the Income Tax Act. Any person who hinders, molests or interferes with anyone doing anything he is authorised to do under the Income Tax Act, is guilty of an offence and liable on summary conviction to a fine of $15,000 and to imprisonment for two (2) years. Offence in respect of fraud. Any person who knowingly or recklessly makes false or deceptive statements or representations in a return, is guilty of an offence, and in addition to any penalty otherwise provided is liable on summary conviction to a fine of fifty thousand dollars $50,000 and to imprisonment for three (3) years.

Sec. 118 (7)

Sec. 83(4)

Sec. 99(4)

Specific Offences Sec. 98(2)

Any person guilty of an offence under this Act is liable on summary conviction to a fine of thirty thousand dollars $30,000. or to imprisonment for two years or both A person is guilty of an offence in each of the undermentioned sections: (i) Any person who fails, refuses or neglects to file a return.

Sec. 99(7)

-41Sec. 77(2) (ii) Any person who, after being required by the Board to make a return, fails or neglects to do so within the specific time, whether or not he is liable to tax; Any person who fails to furnish the Board with a schedule of income within a specified time; Any person who, without lawful excuse, refuses or neglects to attend or give evidence or to produce books or other documents or who wilfully gives false evidence; and Any person who (a) Fails to give to the Board any information as required by this section; or (b) Fails to produce for the inspection of the Board any records which he may be required by the Board to produce. Other Measures In addition to the general penalty and administrative penalty on the failure to remit P.A.Y.E. deducted, interest is charged at the rate of twenty per cent (20%) per annum on the amount outstanding plus the penalty from the day on or before which he was required to make the payment to the day payment. Sec.103(1) Late payment of Income Tax outstanding at April 30. Interest is charged on Income Tax outstanding at April 30, from May 1 to the day of payment at the rate of twenty per cent (20%) per annum. Sec.103(2)

-42Late payment of Tax by Quarterly Instalment. In addition to the interest payable under subsection (1) where any person being required by this Act to pay a part of instalment of tax has failed to pay all or any part thereof as required, he shall on payment of the amount he failed to pay, pay interest of twenty per cent (20%) a year from the day on or before which he was required to make the payment or the beginning of the period in respect of which he becomes liable to pay interest thereon under subsection (1) whichever is earlier.

Sec. 97(2)

(iii)

Sec. 97(4)

(iv)

Section 79

Section 79 of the Act is amended by deleting subsection (3B) and substituting the following subsection: 3B. Where a person to whom subsection 3A applies had paid quarterly instalments which amount to less than the tax liability disclosed in the return of the year of income, such person shall, with effect from 1st January, 1992, pay interest under section 103 on the difference between (a) the tax liability on the chargeable income of the previous year of income plus 80% of the increase in the tax liability of the current year on the previous year of income; and (b) the total amount paid by the end of the fourth quarter.

Sec.117(5)

(v)

-43NOTES

-44NOTES