QUESTION: Dear Legal Wiz,
I do not know if you can assist. I want to send some computers to a friend who is working with a Foundation in Jamaica that is doing good work. The Foundation was/is registered with the help of an attorney, as a nonprofit entity. The last time we sent some books an all we needed was a letter in order for the persons collecting in Jamaica, to be freed from heavy duty taxes. That doesn’t seem to be the requirement this time around. Do you know what needs to be done?
RESPONSE: Dear Pete Jarrett,
It is not sufficient to comply with the Companies act alone, and it is unfortunate that this was not explained to you at the time of registration. A letter applying for waivers on specific shipments no longer suffices.
The non profit entity now needs to ensure they have charitable status, to avoid being charged as a commercial entity. Please ask the representative to apply to be recognised as a charity entity at the Tax Administration Department on 12 Ocean Boulevard. They will need a cover letter requesting exemption from Income Tax, in accordance with section 12(h) of the Income Tax Act of Jamaica. This section of the Act details that “the income, in part or whole, of any corporation or association organised and operated exclusively for religious, charitable, scientific or educational purposes should not be to the benefit of any private stockholder or individual.
The representatives as applicants for exemption from income tax, will also need to present certified copies proving how they were registered or established. The supporting documents in the application package will vary depending on how such nonprofit entity was formed, and the three ways of formation in Jamaica are:
1. On being registered as a company without shares and limited by guarantee, under the Companies act,
2. On being established by an Act of Parliament
3. On being established by Constitution
The processing can take up to Thirty (30) days.
SPECIAL NOTE: Do you need help registering your nonprofit organisation in Jamaica? Contact the Legal Wiz at the International Doc Centre in Jamaica.