It’s tax season again.
Not exactly an exciting time, but it’s a busy one.
Accountants across the T&T are sorting through seemingly endless piles of TD4s and more.
In this country, individuals and businesses are required by law to pay various forms of tax.
Tax director at KPMG Nicole Joseph explained the process.
She said companies have to pay their corporation taxes/business levy and green fund levy for income year 2018 in quarterly instalments.
The first instalment for income year 2018 was due on March 31, 2018—late payment attracts interest at 20 percent per annum.
“So they had that first deadline date in March. The next instalment for income year 2018 is due on or before June 30, 2018.
“For the April tax filing season, companies need to prepare and file their 2017 tax returns (and any prior year if not already done) and pay any final balance of corporation tax or business levy and green fund levy by April 30, 2018. Any payments for income year 2017 made after April 30, 2018 will incur interest at 20 percent per annum for late payment,” Joseph said.
She said companies have until October 31, 2018 to file the 2017 tax return and after this date a late filing penalty of $1,000 will be levied for every six months the tax return remains outstanding.
The Board of Inland Revenue (BIR) issues the tax return forms and those individuals who are earning just emolument income would not need to file tax returns.
Other individuals, however, would be required to file such returns online as implemented by the BIR a few years ago.
This is known as e-Tax.
This computerised method, Joseph said, has made the process easy to be monitored by the individual.
“Individuals would be able to monitor and track the processing of the tax return at the Board of Inland Revenue. And it also makes the process of any tax refunds that may be due to these individuals quicker.”
On whether the online method can be somewhat onerous for some people Joseph disagreed.
“That is the way going forward. It would be onerous for people who don’t have the facilities and technology but for other people it’s the way forward and it is something I believe we all should embrace,” Joseph urged.
Individuals and employees are no longer required to file taxes once their sole source of income is employment income.
“The onus is on the employer to deduct the correct taxes,” Joseph said.
Regarding her thoughts on tax evasion and tax leakage she believed there were several processes in the pipeline, in particular with the expected the Revenue Authority.
“Once the proposed Revenue Authority is implemented it would be able to address all these issues.
“They would have the proper compliment of staff, the facilities and technology be able to address all the areas where they think the leakages are occurring,” Joseph said.
Despite repeated urges, year after year, there are those who, even though obliged, fail to file tax return.
This, Joseph advised was bad practice.
“Everybody has to be compliant. It’s a legal obligation.
“There are penalties and interests that are in place in the law so that when they do catch up with you, you would be now subject to the tax on the income that you didn’t declare plus interests and penalties for not being compliant,” Joseph said.
She added that the BIR actually has records which can easily reflect whether taxes have been filed or not.
In this vein, the BIR has been issuing reminders to companies with an expected deadline date to submit tax returns.
“The board is being very proactive with respect to going after companies that have not been compliant.
“There are cases where sufficient reminders were sent and there was no effort to respond and provide the tax return or requested information and the board actually has powers to use a best estimate and assess the company to be taxed, Joseph added.
On the issue of tax claims for individuals this entailed first-time home owner’s allowance, deductions for pension, annuity and NIS and deductions for tertiary education.
Companies enjoy all deductions which are wholly and exclusively incurred in generating that source of income.
Supporting documents for expenses and income are key in the event of an audit by the BIR.
Whether the current system of collecting taxes was efficient Joseph praised the BIR for carrying out proper functions as in the case of an amnesty.
“They would actually tell people that, ‘Look, our records show you owe us a certain amount’ and for you to come in and either pay it.
“You also have the opportunity to the explain to them or provide evidence whether you have paid the amount,” Joseph said.
But she concurred that there is always a lot more to be done, especially when compared to developed territories and their aggression on tax collection.
“Hopefully now with the proposed changes, all things would come into fruition. It’s not just about the Board of Inland Revenue going out there and collecting.
“For the taxpayer, you also have rights in terms of objecting to assessments. You can go in and obtain up-to-date information. Hopefully a lot of these things will be easier and the information will be more accessible so people can rectify their tax status as well,” Joseph added.
Procedures for individuals
In order to pay taxes, all individuals must have a BIR file number.
Individuals are no longer legally required to file income tax returns unless they are professionals or self-employed. Employers will deduct taxes from your salary and pay them to the government on your behalf.
However, a person can choose to file a return if he or she is unhappy with the amount of tax that has been deducted from your earnings by your employer.
If you are self-employed you must file a tax return at the end of the financial year. The filing deadline is set by the Inland Revenue Division, is usually in March or April, and can vary from year to year.
All taxpayers are entitled to a personal allowance of $72,000 per year. This means that you do not pay income tax on your first $72,000 of income, so you pay no income tax at all if you earn less than this amount.
You can reduce the amount of tax by declaring tax-deductible expenses.
What tax assistance is available for individuals?
The Inland Revenue Division of the Ministry of Finance provides the following tax services free of charge:
• Answering queries on tax liabilities
• Assisting with completion of tax returns
• Approval of TD1 forms (please follow the link at the end of this section for more information on TD1 approvals)
• Explanation of any tax measure
Procedure for businesses
Businesses must have a BIR file number in order to pay taxes. They must also have a PAYE file number in order to deduct and remit taxes from employees.
What is e-Tax?
e-Tax is the online portal provided by the Inland Revenue Division (IRD) for taxpayers to manage their tax accounts online.
By accessing e-Tax at https://etax.ird.gov.tt in any standard web browser, taxpayers can register to view their accounts, file returns, and correspond with IRD.
It gives the customers of the Inland Revenue Division online access to their tax accounts and related information.
It has features which would allow you to view tax balance, check refunds status and perform a wide variety of tasks.
It allows you to authorise other persons to access your account. These persons include tax practitioners or accountants.
In addition to viewing your personal accounts you can also manage your company’s or client’s accounts by requesting another type of access to e-Tax.
There are three access types used to access other taxpayer’s accounts:
1. Delegated access: officials of a company grants access to the company’s tax account(s)
2. Third-Party Access: grants access to your account; request access to another person’s accounts
3. Accounting firm access: used by accounting firms to give their employees access to their clients’ accounts.
How to enroll for e-Tax
To use e-Tax, you need to get your ttconnect ID
Register for your ttconnect ID in three steps:
1. Complete and submit the ttconnect ID registration form (www.ttconnect.gov.tt) online. Ensure your BIR number is included in the registration form.
Once completed and submitted, you should receive an email notification with additional registration details. If you do not receive any such notification please send an email to info.ttconnect@gov.tt
2. Activate your ttconnect ID (instructions for activation are contained in the email notification).
3. Visit a ttconnect service centre with the following forms of valid identification / documentation, as well as your ttconnect ID, in order to complete the registration process. Make sure to indicate to the customer service representative you are registering for e-Tax.
FAQ about taxes
Do I have to pay income tax?
By law all individuals—whether self-employed or employed by someone else—must pay income tax. However, individuals are only legally required to file income tax returns if they are professionals or self-employed. Employers deduct taxes from workers’ salary and pay them to the government. However, you can choose to file a return if you are unhappy with the amount of tax been deducted from your earnings by your employer.
All self-employed people must file a tax return at the end of the financial year. The filing deadline set by the Inland Revenue Division is usually in March or April and but varies from year to year.
How much tax do I pay?
All taxpayers are entitled to a personal allowance of $72,000 a year. You do not pay income tax on your first $72,000 of income, so you pay no income tax at all if you earn less than this amount annually.
You can reduce the amount of tax you pay by declaring tax-deductible expenses.
Where can I get assistance?
The Inland Revenue Division of the Ministry of Finance provides the following tax services free of charge:
• Answering queries on tax liabilities.
• Assisting with completion of tax returns.
• Approval of TD1 forms (please follow the link at the end of this section for more information on TD1 approvals).
• Explanation of any tax measure.
Where are the offices located?
You may contact the following locations for tax assistance between 8 am and 4 pm, Monday to Friday, except public holidays:
Taxpayer Services Section
Victoria Courts
Queen Street, Port of Spain
Trinidad
Tel. (868) 623-2981/7106
ext 201 and 204
Taxpayer Relations Section
Inland Revenue Division
Trinidad House
St Vincent Street, Port-of-Spain
Tel (868) 623-2981/7106
ext 321, 323-6
South Regional Office
Inland Revenue Division
52 Cipero Street, San Fernando
Tel (868) 657-6057/5775
Tobago Regional Office
Inland Revenue Division
Sangster’s Hill
Scarborough, Tobago
Tel. (868) 639-2410/2538
Tax assistance is also available at the Arima or Couva District Revenue Office on the first Wednesday of every month, or the Point Fortin District Revenue Office on the third Wednesday of every month between 8 am and 12 noon.
During tax filing periods—April and October—technical officers are stationed at District Revenue Offices on specified days.
You can also visit the Inland Revenue Division website and select the “Tax Assistance” drop-down menu for on-line tax assistance.
How do I pay my taxes?
If you are employed by a company, your taxes are deducted as you earn and are paid to the Inland Revenue Division by your employer.
Businesses and professionals must make payments directly to the Inland Revenue Division:
1. Fully complete a payment description slip. This form is available online by following the link below, or you can pick up a copy from any cashiers’ unit (see addresses below) or District Revenue Office.
2. Present your completed payment description slip together with your payment at any Cashiers’ Unit. Payment can be made by cash, cheque or Linx (debit card).
Where can I make a payment?
Payment can be made at the cashiers’ unit at the offices listed between the hours of 8:00 am and 3:00 pm, Monday to Friday, except public holidays.
Payment can also be made at any district revenue office.
What are the deadlines to submit taxes?
Employers must pay Income Tax and Health Surcharge Payments deductions (PAYE) by the 15th of the month following the month the deduction was made from employee’s earnings. Self-employed individuals must make quarterly payments by the last day of each quarter, in March, June, September and December.
