How to Calculate…
CORPORATION / INCOME TAX
Quarterly instalments of corporation/income tax should be based on the estimated chargeable income of the current year.
The Act allows the estimate instalment of the current year to be the amount declared for the preceding year, and accordingly, the instalment is based on preceding year’s tax liability; since the tax rates for 2015 and 2016 remained constant at 25%, the quarterly installment is calculated as follows:
Quarterly Installment = 2015 Tax Liability / 4
If the estimate of profits for the current year is less than the preceding year a taxpayer must apply to the Revenue to request an approval for a reduction to their quarterly instalments.
If the tax liability for the current year is expected exceed the preceding year, you are required to remit 100% of the preceding year’s liability plus 80% of the increase by December 31, 2016.
Your Business Levy payment must be calculated on your gross sales/receipts from July 1, 2016 to September 30, 2016 x 0.6%.
Where the estimated Corporation Tax quarterly installment exceeds the Business Levy liability you are only required to remit the Corporation Tax. Where the business levy liability exceeds the Corporation Tax liability you are required to remit only the Business Levy.
For newly established businesses, you are exempt from Business Levy for the first three years from the date of incorporation. Please note, this exemption does not apply to Corporation Tax and Green Fund Levy.
GREEN FUND LEVY
Green Fund Levy must also be calculated on your gross sales from July 1, 2016, to September 30, 2016 x 0.3%.
This applies to companies, including unincorporated associations (e.g. Charities) and partnerships.
There are no exemptions for newly established businesses.
Sole Traders and Partners of businesses are also reminded that Health Surcharge quarterly instalment of $107.25 is due on or before September 30, 2016
Failure to remit the appropriate quarterly instalment by the due date; will result in the Revenue assessing interest on any shortfall and late payment at an interest rate of 20% per annum.
If you require our assistance in making these payments, kindly make your cheques payable to the Board of Inland Revenue and deliver to us on or before September 29, 2016.