Tuesday, 8 September 2015

Taxation 101

Having some experience in the preparation, review or printing of tax returns in various positions which I have held and having worked on the audit of a company which  had subsidiaries which operated in CARICOM countries, I pay attention to various tax matters such as Tax Amnesties, the National Budget, access to information on Tax matters such as the availability of tax returns online and so forth. So it was with glee that I discovered the website for the St Lucia's Inland Revenue was wonderfully updated and there were many similarities with respect to (wrt) the information which was available on the Trinidad site. Here are some of the areas of access:

http://www.irdstlucia.gov.lc/index.php/employers  This area deals with the concepts and applications with respect to employers and compliance. More importantly, the application of the concepts allows for a steady inflow of funds to the BIR/ Ministry of Finance on a monthly basis or as often as persons other than employees are paid ( which is my understanding of the way one of  these  concepts was applied) as outlined in the following extract from the site:

Employers may have tax obligations for employees and contractors working in their business.
These obligations may include:
  • Pay As You Earn (PAYE) deductions
  • Contract tax deductions
These responsibilities begin from the day the employee or contractor starts employment to the day they stop. There are also some responsibilities if the business stops being an employer altogether."

Also, my exposure and understanding of the application of withholding tax has developed over the years. It is an area where great care is to be exercised as there may be a need to consider the application of the concept dealing with withholding tax  on a transaction by transaction basis.
There is at least one case, (which was decided in the court(s)) between a joint venture  which operated in  Trinidad and Tobago and the Board of Inland Revenue which provides insight  as to the thinking of the judge(s), and the arguments put forward by the attorneys on both side. Access to that opinion  should be made available on a pay per view, as it offers so many options on the way we think and alternatives which are available.
However, in practical terms, with respect to the application of withholding tax, some of my ease of understanding of the concept came about through  dealing with a section on the Trinidad and Tobago corporation tax return which was one of the most time consuming sections to prepare on the return depending on the operating activity of the company:

SCHEDULE I GROSS PAYMENTS AND DISTRIBUTIONS (TT$ ONLY) (See Instruction No. 20)  The following categories are to be completed:
  • Total Payments 
  • Payments to Residents 
  • Payment to Non-Residents 
  • Amount of Withholding Tax deducted and paid to the Board of Inland Revenue 
  • Receipt No. and Date 
The above was extracted from the 2014 corporation tax return, and is available via the link below.  http://www.ird.gov.tt/Media/Default/IRDForms/2014/F-500CTR--2014.pdf

In addition to the above, the following  link  provides information on some  of the areas which support the concepts and deliveries of such:



Funnily enough, if you understand the concepts with respect to payments made to individuals and corporations, then it is easy to apply  the concepts to the income side of the transaction :)

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