In Trinidad and Tobago, interest may be avoided by a company on the payment of quarterly taxes should the required amounts be paid to the Board of Inland Revenue on or before the due dates. The due dates for the payments of quarterly taxes are 31st March, 30th June, 30th September and 31st December. The 4th quarter for 2016 ends on 31st December and it is important that the quarterly taxes due are correctly determined and paid on time. Should a downward adjustment be required to be made for the payment, an application should be made and approved by the Board of Inland Revenue. Interest of 20% per annum is imposed on the late payment of quarterly taxes.
Corporation tax is charged for the calendar year in which the accounting period ends, on taxable profits earned during the accounting period. Taxable profits is determined after deduction of capital allowances and the revenue expenses wholly and exclusively incurred in producing income. Corporation tax is based on 25% of taxable profits of a company.
In an income year quarterly corporation tax is based on the taxable profits of the previous year. The corporation tax payable for each quarter in 2016 is based on taxable profits for the income year 2015. The corporation tax installment payable for each quarter in 2016 is determined based on the following formula.
Taxable profits for 2015 X 25%
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Should the taxable profits for 2016 be expected to exceed the taxable profits for 2015, by 31st December the company is required to pay to the Board of Inland Revenue, quarterly taxes equal to the liability for income year 2015 in addition to 80% of the increase for 2016 over 2015.
Should the taxable profits for 2016 be expected to be less than the taxable profits for 2015, an application should be made to the Board to Inland Revenue for approval to reduce the quarterly tax installment. A company is required to pay the higher of corporation tax or business levy.
Business levy is charged at the rate of 0.6% of gross sales or receipts of a company. A credit is given against business levy liability for any corporation tax paid for the income year, the result being that only the higher of the corporation tax or the business levy liability is payable.
Green fund levy is charged at the rate of 0.3% of gross sales or receipts of a company. Green fund levy must be paid in addition to corporation tax or business levy.
DISCUSSION FORUM
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