Step by Step Guide to Export KEY CONCESSIONS

Step by Step Guide to Export KEY CONCESSIONS AVAILABLE TO MANUFACTURERS 1

2016 Contribution of the Manufacturing Sector 8. 5% to Gross Domestic Product (GDP) 77, 500 jobs US$486. 7 million in foreign exchange earnings J$55 billion in taxes 2

Pieces of Legislation Governing Incentives for the Manufacturing Sector The Customs Tariff Amendment Act (effective January 1, 2014) The Fiscal Incentives (Miscellaneous Provisions) Act (effective January 1, 2014) General Consumption Tax Amendment Act (October 1, 2014) The Stamp Duty (Amendment of Schedule)Order (effective January 1, 2014) 3

Definition of Manufacturing The production of goods in Jamaica by means of a process of manufacture, but DOES NOT include the production of goods which results from a process that consists primarily of any one or more of the following – • Dividing (including cutting), purifying, drying, mixing, sorting, packaging, branding, testing or applying any other similar process to a product, produce or material that is acquired in bulk. • Improving or altering any articles or materials without making a change in their character; or • Repairing, refurbishing, reconditioning, restoring or other similar processing of any articles or materials, or any combination of such processes. 4

List of Key Concessions q Relief of Common External Tariff q Relief of Advanced General Consumption Tax (GCT ) q Relief of Additional Stamp Duty q 50% Discount on Customs Administrative Fee (CAF) q Deferment of GCT q Employment Tax Credit (ETC) q Special Economic Zones 5

Items for Concession Raw Materials Natural or primary goods which have not been worked or processed but the preservation of which is ensured during transportation or storage that their original characteristics are unaltered and remain substantially unaltered. Intermediary Goods which have been transformed from their natural state by being worked or processed, but which have to undergo further working or be incorporated along with some other goods or material in the production of primary products or the manufacture of goods. Consumables Materials (excluding lubricating oils or fuel oil for use in internal combustion engines) and articles consumed or expended by a taxpayer directly in the process of the production of primary products or the manufacture of goods. Packaging Materials Machinery and Equipment/Parts Materials used to contain, protect, identify, preserve or display primary products or manufactured goods" Goods imported for direct use in the production of primary products and manufacture of goods. Goods imported for quality control testing, packaging or climatecontrolled storage of such products/goods. 6

Items Ineligible for Concession 1 2 3 Goods listed in Part 1 of the Fourth Schedule of the Customs Act, The Customs Tariff Amendment No. 2 and 3 Resolution, 2013. Goods listed in Part IV of the Third Schedule of the Customs Tariff Resolution, 2013. Goods which the Commissioner is satisfied can be obtained in adequate supplies locally or regionally. 7

Concessions Incentive How it is Administered Deferment of General Consumption Tax (GCT) on raw materials, intermediate and packaging goods, consumables and machinery (including spare parts) at the point of importation. In addition GCT is deferred on packaging materials at the point of local purchase. Conditions: q. Manufacturers/Producers involved in making taxable goods or involved in mixed activities (producers of both exempt and taxable goods) are allowed to import without the payment of GCT on items that would normally qualify under the Productive Input Relief (PIR) of the Fiscal Incentives Act. You are, however, required to account for the GCT when you file your GCT returns by the last working day of the month following the importation of the item (s). q. Manufacturers/Producers involved exclusively in making exempt goods are required to pay GCT on their imports that are used in the manufacturing process. However, you will be allowed a refund of the GCT paid on items that would qualify under the PIR when you file your GCT returns. NOTE: q. Registered Taxpayers must gross $3, 000 and over in total supplies to benefit. q. The GCT Return Form 4 A was amended to facilitate the process. q. Certificates are valid for one (1) year. 8

Incentive How it is Administered Customs Administrative Fee 50% discount q PROCESSING FEE: Authorized Economic Operator (AEO) entry. q CUSTOMS EXAMINATION FEES: On containers of goods of raw materials, intermediate and packaging goods. NOTE q This concession does not apply to capital equipment, bulk cargo or itemized imports. Concessions Relief of Advanced General Consumption Tax q Goods imported under Part 5 of the Third Schedule to the Custom Tariff (Revision) Resolution, 1972 will not attract the advance 5% GCT. Special Economic Zones All interested parties are invited to complete the registration form which may be requested via email at info@jseza. com or you may schedule an appointment with the JSEZA and a representative will be assigned to assist you with completing the documentation. . Visit the Jamaica Special Economic Zone website at http: //www. jseza. com/ for information. Duty Relief q Company must be registered with MICAF and Jamaica Customs. q Manufacturing status is 9 renewable every three (3) years.

Incentive How it is Administered Employers Tax Credit (ETC) q. Allowed to employers who pay and file SO 1 s on time q. Restricted to 30% of income tax liability from trade q. Reduces the Income Tax rate to an effective rate of 17. 5% Concessions q. Computing the ETC Step 1: q. Total payroll statutory contributions for NIS, Ed Tax, NHT and HEART (employee and employer’s portion) filed/paid on time. Step 2: q. Compute tax chargeable (i. e. at 25%) on profits from trade (exclude non-trade income /passive investment income). Step 3: q. Claim ETC as computed at Step 1 or a maximum 30% of the amount computed at Step 2, whichever is lower. NOTE: q. ETC is not refundable and cannot be carried forward (or back)10 for use in other years of assessment.

Accessing Concessions Manufacturing Registration Obtain a Manufacturing Status form from the Ministry of Industry, Commerce, Agriculture and Fisheries (MICAF) or the JMA. q Submit completed Manufacturing Status form to MICAF along with the company’s updated Tax Compliance Certificate (TCC) and Business Registration Certificate. Include a description of your Production Process via a flowchart diagram for each product. Note your process flow chart (s) must depict items being imported such as raw material and machinery used. q MICAF sends the application to Jamaica Customs. q MICAF and Jamaica Customs conduct a joint verification visit to the manufacturer’s site. q Jamaica Customs makes a determination of approval for import relief. q Jamaica Customs issues a letter to the applicant after the determination is made. q Submit your documentation to the following representatives at MICAF: Team Leader: Marcus Edwards contact number- 968 -8599; Email: medwards@micaf. gov. jm Mrs. Avis Matthias contact number- 968 -8610; Email: amatthias@micaf. gov. jm Mr. Derick Wellington contact number- 968 -8534; Email: dwellington@micaf. gov. jm industry@micaf. gov. jm q GCT Deferment q q Obtain GCT Deferment Form from the JMA or TAJ Submit completed form to: The Commissioner General Tax Administration Jamaica 191 Constant Spring Road Kingston 8 Telephone: 969 – 0000 Contact: Stephanie Chin 11

The JMA was established in 1947 to offer services that: q q q q q Assist Guide Advocate Inform Promote Market Train Matchmake Develop 12

85 A Duke Street, Kingston Tel: 922 -8880 -3; Fax: 922 -9205 email: jma@cwjamaica. com website: www. jma. com. jm Facebook: www. facebook. com/JMAlimited Twitter: https: //twitter. com/manufacturersja THANK YOU 13