First Look

TAJ outlines procedures relating to charities



Tax Administration Jamaica (TAJ) | 2013-10-23 00:00:00

Tax Administration Jamaica (TAJ) is advising that as of July 15, 2013, amendments were effected to the procedure of certifying Charitable Organizations approved prior to July 15, 2013 and processing new applications, from July 15, 2013 onwards, for exemption under Section 12(h) of the Income Tax Act.

 

This new process has become necessary with the enactment of The Charitable Organizations (Tax Harmonization) (Miscellaneous Provisions) Act 2013, commonly referred to as the Harmonization Act.  It is a the single piece of legislation which has amended sections of various Revenue Acts to clearly define an Approved Charitable Organization as that approved under Section 12(h) of the Income Tax Act. As a result all Approved Charitable Organizations will now automatically benefit from the following:

•             Exemption of its income under Section 12h of the Income Tax Ac.

•             Zero-rating of goods and services acquired for the charitable purposes under Group 9, Part 11 of the First Schedule of the GCT Act.

•             Refund of GCT paid under Section 43 of the GCT Act (to be claimed within two years of purchase).

•             Exemption under Section 10(1)(b) of the Property Tax Act

•             Exemption under the Stamp Duty Act - Conveyances

•             Exemption under Section 17(1) of the Transfer Tax Act.-

•             Exemption under Section 5(2) of the Customs Act

•             The amounts or value of donation made to the Approved Charity is to be an allowable expense in the books of the donor under Section 13(1)(q) of the Income Tax Act (subject to statutory limit).

 

There is no longer the need to apply to the Minister of Finance for any approval or waivers relating to these charities.

 

With the introduction of the Harmonization Act, organizations previously approved as charities by TAJ, as well as those approved by the Minister of Finance as having a charitable purpose are asked to apply to TAJ for an Approved Charitable Organization Certificate.  This is the “passport” to access the exemptions.

 

All organizations applying for charitable status subsequent to July 15, 2013 shall either:

•             Be a registered company under the Companies Act, established as a company without share capital and limited by guarantee or

•             Be established by an Act of Parliament

•             Be established by Trust Deed

•             Be established by Constitution

 

In applying for the approved charitable status, organisations are required to submit the following documents:

1.            Duplicate of Executed Constitutive document (Articles of Incorporation, Memorandum and Articles of Association, Trust Deed, Constitution, Act of Parliament. 

2.            Organisations registered as Companies are also required to submit duplicates of the Certificate of Incorporation and Schedule of the Objects and Powers of the Organisation.

3.            Letter addressed to the Commissioner General requesting Approval under Section 12(h) of the Income Tax Act.

4.            TRN of the organization.

 

Successful Applicants will receive a Letter of Approval and a Certificate of Approved Charitable Organization status.

 

It should be noted that all Government Institutions carrying out Charitable Purposes as under Section 2(4) of the Harmonization Act will be eligible for Approval under Section 12(h) of the Income Tax Act. Government Schools and Hospitals in particular will only need to establish their identity as a Government Institution, submit a copy of their TRN and write a letter of application for Approved Charitable Organization status.  On receipt of such an application the Certificate will be issued to them.

 

Persons may contact the TAJ Superannuation and Exempt Organization Unit at 948-1227 for further information.




Posted By :Meris Haughton

Company Name : Tax Administration Jamaica (TAJ)

Website :

Company Address : PCJ Building (4th Floor) 36 Trafalgar Road Kingston 10


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