Taxpayers having engaged in transactions with a connected or affiliated company during assessment year 2017 must file a declaration with their income tax returns by 15 March 2018.
The declaration to be filed is Schedule 8 – Declaration of Connected Person Transactions.
The declaration must be completed and filed with the income tax return. Any person who fails to certify that the accounts and information used to prepare the income tax return include information about connected-person transactions (that is, related-party transactions) may be liable for a penalty of a maximum amount of J$2 million (or approximately U.S. $16,000) as well as possible criminal sanctions.
The taxpayer company would also be liable for any additional tax and interest related to the assessment, determined after the tax authorities apply the transfer pricing rules to the company’s income tax return.
Taxpayers that have gross revenue of J$500 million (approximately U.S. $4 million) must provide, on request from the tax authorities, transfer pricing documentation that verifies that the connected-person transactions for the year of assessment are consistent with the arm’s length principle. Taxpayers have 30 business days to provide the transfer pricing documentation after receiving a request from the tax authorities.
Read a January 2018 report [PDF 250 KB] prepared by the KPMG member firm in Jamaica
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.