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INCOME TAX DEDUCTION TABLE - Inland Revenue Division

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					             REPUBLIC OF
        TRINIDAD AND TOBAGO




        INCOME TAX
      DEDUCTION TABLE




EFFECTIVE 2003 UNTIL FURTHER NOTICE
                                         FOREWORD

The Pay As You Earn (P.A.Y.E.) System is provided for by sections 98-101 of the Income Tax Act,
Chap. 75:01 and the Income Tax (Employment) Regulations made in accordance with section 125 of
the Act. Sections 98-100 deal with the obligations of employee and employer and define
“emoluments” which are to be subject to P.A.Y.E. Section 101 requires the Board to provide Tax
Deduction Tables.

The Board of Inland Revenue has prepared easy to use P.A.Y.E. Tax Deduction Tables which show
the amount of tax to be withheld from wages, salaries and other emoluments. In addition,
instructions (including examples) covering all aspects of the P.A.Y.E. system and its application
have been prepared.



                                                                       HASEENA ALI
                                                                           Chairman,
                                                                    Board of Inland Revenue
                                                iii
                                           CONTENTS
                                                                                        Page
I. DEFINITIONS
        1. Employer …        …      …       …         …   …      …       …      …   …   1
        2. Employee          …      …       …         …   …      …       …      …   …   1
        3. Office      …     …      …       …         …   …      …       …      …   …   1
        4. Emoluments        …      …       …         …   …      …       …      …   …   1
        5. Chargeable Income        …       …         …   …      …       …      …   …   1
II. DECLARATION BY EMPLOYEES: CALCULATION OF TOTAL DEDUCTIONS
        1. Form T.D.1        …      …       …         …   …      …       …      …   …   2
III. TAX DEDUCTION TABLES           …       …         …   …      …       …      …   …   2

IV. USE OF TAX TABLES AND EXAMPLES
        1. Emoluments to be taken into account in determining chargeable income …   …   2
        2. Direction on use of tables …     …       …      …      …       …     …   …   3
        3. Examples for deduction of PAYE Taxes …          …      …       …     …   …   3

V. DEDUCTION OF TAX BY EMPLOYER

        1. Deduction of Tax on Payment of Emoluments      …      …      …     …     …   8
        2. Payments from which Income Tax should not be deducted        …     …     …   9
        3. Deduction of Tax from Payments relating to Termination of Employment     …   11
        4. T.D. 4 Supplementary     …      …       …      …      …      …     …     …   11
        5. Health Surcharge …        …      …      …      …      …      …     …     …   12
        6. Disputes    …      …      …      …      …      …      …      …     …     …   12
        7. Agreements not to Deduct are Void       …      …      …      …     …     …   12
        8. Change of Employment …          …       …      …      …      …     …     …   12
        9. Retirement of Employee …         …      …      …      …      …     …     …   12
       10. Death of Employee …       …      …      …      …      …      …     …     …   12
       11. Death of Employer …       …     …       …      …      …      …     …     …   12
       12. Change of Ownership-Business …          …      …      …      …     …     …   12

VI. PAYMENT AND ACCOUNTING FOR TAX AND HEALTH SURCHARGE

        1. Payment of Tax to the Board of Inland Revenue …         …     …      …   …   13
        2. Penalty for Failure to Deduct and Remit Taxes …         …     …      …   …   13
        3. Accounting for Tax Deducted and Keeping Records         …     …      …   …   13
        4. Distribution of Certificates of Emoluments Paid and Taxes Deducted   …   …   13
        5. When T.D. 4 Certificate is to be Delivered       …      …     …      …   …   13
        6. Reconciliation of Records …        …      …      …      …     …      …   …   14
        7. Accounting for Arrears of Tax      …      …      …      …     …      …   …   14
        8. Persons Paying emoluments in the Public Service …       …     …      …   …   14

VII.    TAX RATES 1997-2002        … … …… …               …      …       …      …   …   14
VIII.    B.I.R. TAX TABLES …          …      …       …      …       …       …       …       …     15


                                          INSTRUCTIONS
I. DEFINITIONS

   1. “Employer” is defined in the legislation as any person paying emoluments to an employee.
      The term includes any person paying emoluments on behalf of another person such as a
      manager of a company.

   2. “Employee” means any person, not being the holder of an office, in receipt of emoluments.

   3. “Office” means a position, not being an employment or place entitling the holder thereof to a
      fixed or ascertainable stipend or remuneration, and includes the Office of a Minister of
      Government, the Office of a member of the Senate or the House of Representatives of
      Trinidad and Tobago, a member of the Municipal or County Council and any other office,
      the holder of which is elected by popular vote or is elected or appointed in a representative
      capacity and also includes the position of a company director.

   4. “Emoluments” means all salary, wages, overtime, bonus, remuneration, the value of board
      and lodging, stipend, meal allowances, commission or other amounts for services, director’s
      fees, retiring allowances or pensions, and any other perquisites arising or accruing in or
      derived from or received in Trinidad and Tobago and which are assessable to income tax, but
      shall not include any salary or share of profits arising from a trade or business, profession or
      vocation carried on by any person either by himself or in partnership with another person.

   5. For the purpose of the Tax Deduction Tables, “Chargeable Income” means total emoluments
      minus total deductions. Any or all of the following may be claimed by a resident individual
      as deductions:

         (a)   (i)     An individual under 60 years of age – A personal allowance of $25,000.00
               (ii)    An individual over 60 years of age – A personal allowance of $30,000.00

         (b)   (i)     Interest on loans/bridging finance in respect of property to be used by the
                       owner as his residence.
               (ii)    Interest on loans in respect of property used on behalf of the owner or rent-
                       free by the occupier for the purpose of residence. In each case the claim is
                       limited to $18,000 per taxpayer.
               (iii)   Expenses incurred in respect of Tertiary Education. (certain conditions apply)
               NB:     The aggregate amount of the deductions made under b (i-iii) above shall not
                       exceed the sum of $18,000 in any year of income.

                       For the purpose of paragraph (ii) Owner of residence means the legally titled
                       owner of the property i.e whose name appears on the Land and Building
                       Receipt / Deed of Conveyance.
        (c)    (i)     An allowance for first time acquisitions of homes.

                NB: This allowance should not exceed $10,000.00 and may be claimed for the first
                    Five years commencing from the year in which the house was acquired.
        (d)    (i)     N.I.S. contributions limited to 70 per cent of such contributions.
               (ii)    Contributions to Government Widows’ and Orphans’ Pension Fund, approved
                       Provident and Superannuation Fund, approved Fund or Scheme, approved
                       Pension Fund Plan and premiums paid under an approved Deferred Annuity
                       Plan.

               NB:     The aggregate amount of the deductions made under c (i) and (ii) above shall
                       not exceed the sum of $12,000 in any year of income.
                Alimony/Maintenance payments made to a spouse or a former in accordance
               (iii)
                with a court order.
II. DECLARATION BY EMPLOYEES: CALCULATION OF TOTAL DEDUCTIONS

   1. “Form T.D. 1” is the prescribed form on which to complete declarations and is solely for the
      purpose of making deductions of tax from pay.

        An employee is required to file a T.D. 1 on the commencement of employment and need not
        file a new declaration unless there is a change in allowable deductions or as instructed
        by the Board on Inland Revenue.

   2. Approval by the Board is required in the following cases:

        (a) where a person receives emoluments from more than one source; and
        (b) where claims are made in respect of loan interest, tertiary expenses (5(b) above), and/or
            an approved Deferred Annuity Plan, and /or Alimony/Maintenance.

The Board, on the basis of the information in the T.D. 1 will advise the employer(s) of total
deductions to be taken into account in determining the tax to be deducted from emoluments.

TD 1A

It should be noted that where an employee has income from more than one source, the Board shall
issue a directive (Form TD 1A) directing the employer to deduct tax from in accordance with the
directive. The Form TD 1A replaces the Form TD 1 and must be complied with in the same manner
as authorized by the Form TD 1.

III. TAX DEDUCTION TABLES

The tables are designed to show annual tax to be deducted, as applied to chargeable income (annual
pay less deductions). Amounts to be deducted from employees’ emoluments are to be determined as
follows:

        (a) Weekly paid employees-Divide annual tax by 52;
        (b) Fortnightly paid employees-Divide annual tax by 26;
        (c) Monthly paid employees-Divide annual tax by 12.

IV. USE OF TAX TABLES AND EXAMPLES

   1. Emoluments to be taken into account in determining chargeable income

        In arriving at chargeable income, emoluments to be taken into account include:
       (a) taxable benefits, the value of board and lodging or any other benefits derived by the
           employee from his employment;
       (b) overtime which is paid with regular emoluments;
       (c) leave pay-when an employee ceases employment and goes on terminal leave, tax must be
           deducted from leave pay as if employment were continuing.
       (d) Emoluments credited to an employee’s account with the employer (not uncommon in
           cases of directors) are to be treated as paid and tax deducted at the time the credit is
           made; and
       (e) Advances of pay-Tax must be deducted from payments representing emoluments paid in
           advance to employees.


       (f) MOTOR VEHICLE AND EQUIPMENT BENEFIT:
           Where the employer provides a director or employee with a motor vehicle or any
           equipment belonging to a company and the same is available for the private use of the
           director or employee, the value per month of the benefit which must be included in the
           emoluments of the director or employee is –

              (i)    one per cent (1%) of the cost of acquisition of the motor vehicle or equipment;
                     or
              (ii)   thirty-three and a third per cent (33 1/3%) of the monthly rental of the motor
                     vehicle or equipment incurred by the company.
                     A taxable benefit arises whether or not the director or employee has the
                     exclusive use of the motor vehicle/equipment. For example, where he is taken
                     to and from his home in a car, provided by the employer, which is not
                     otherwise at his disposal, this facility is considered a perquisite and the value
                     of such is taxable.

2. Direction on use of tables
    (a) The tables are to be used as shown in the examples. Permission must be obtained from the
        Board of Inland Revenue to deduct an amount less than the amount shown in the tables;

   (b) Do not deduct tax from a resident employee whose annual emoluments do not exceed the
       amounts shown hereunder:
              Weekly …       …       …     …      $480. ($24,960 p.a)
              Fortnightly …          …     …      $961. ($24,986 p.a)
              Monthly        …       …     …      $2,083. ($24,996 p.a)
              Annually       …       …     …      $25,000.

3. Examples for Deduction of P.A.Y.E. Taxes

   (For the purposes of these Tables, Chargeable Income and Emoluments are defined at (5) on
   page 1).

Example “A” – Weekly paid wages and benefits - $600. Deductions $27,800. ($25,000. Personal
              allowance + $2,800. other deductions as shown on T.D. 1).

   1. Multiply $600 by 52. Result - $31,200 – employee’s annual emoluments.
   2. Determine Chargeable Income by deducting “total deductions” from annual emoluments:
      $31,200 - $27,800 = $3,400.
   3. Look down column of tables headed “Chargeable Income” for line indicating $3,201 -
      $3,400, which shows annual tax to be deducted $850.
   4. Divide $850 by 52. Result - $16.35 is the amount of tax to be deducted per pay period.

Example “B” – Fortnightly paid wages and benefits - $1,400. Deductions $28,235 ($25,000
             personal allowance + $3,235 other deductions as shown on T.D.1).

    1. Multiply $1,400 by 26. Result-$36,400-employee’s annual emoluments.
    2. Determine Chargeable Income by deducting “total deductions” from annual emoluments:
       $36,400 - $28,235 = $8,165.
    3. Look down column of tables headed “Chargeable Income” for $8,001 - $8,200 which shows
       annual tax to be deducted $2,050.
    4. Divide $2,050 by 26. Result-$78.85 is the amount of tax to be deducted per pay period.
Example “C”- Monthly paid salaries and benefits $4,000 Deductions $26,735 ($25,000 Personal
allowance + $1,735 other allowances as shown on T.D. 1).

   1. Multiply $4,000 by 12. Result-$48,000-employee’s annual emoluments.
   2. Determine Chargeable Income by deducting “total deductions” from annual emoluments:
      $48,000-$26,735=$21,265.
   3. Look down column of tables headed “Chargeable Income” for $21,201 - $21,400 which
      shows annual tax to be deducted $5,350.
   4. Divide $5,350 by 12. Result-$445.83 is the amount of tax to be deducted per pay period.

Example “D”-Chargeable income exceeds maximum amount ($238,000) shown on tables

   1. Chargeable Income $284,000.
   2. Determine actual tax payable on $284,000 by reference to rates shown on Page 14

              Chargeable Income            Tax Payable
              $50,000       25%            $12,500.00

              $234,000 @    30%            $70,200.00
   Total      $284,000                     $82,700.00

   3. Divide $82,700 by 12 or 26 or 52 as the case may be to determine
      monthly/fortnightly/weekly deductions.
   4. Result: Monthly deductions- $6,891.67; Fortnightly deductions-$3,180.77; Weekly
      deductions-$1,590.38

Example “E”- Deductions from Annual Bonus.

   1. Chargeable Income as previously determined, say $108,000. Annual Bonus-$12,000.
   2. Add Chargeable Income previously determined ($108,000) to Annual Bonus ($12,000)
      Result-$120,000.
   3. Look down column of tables headed “Chargeable Income” for $119,801 - $120,000 which
      shows annual Tax to be deducted $33,500.
   4. Annual Tax to be deducted as previously determined by reference to chargeable income
      $108,000 was $29,900.00
   5. Compare results at 3 and 4.
      Chargeable Income $120,000. Annual Tax-$33,500.00
      Chargeable Income $108,000. Annual Tax-$29,900.00
      Difference between $33,500 and $29,900 is $3,600.
   6. Tax to be deducted from Bonus of $12,000 is $3,600.00




Example “F”-Deductions where there are pay increases which are not retroactive.

   1. Pay increased from $2,500 to $2,600 per month with effect from July 1.

       Total Deductions $28,200. ($25,000 Personal allowance + $3,200 other deductions as
       shown on T.D. 1)

   2. Gross amount paid and tax deducted to June 30, would be as shown hereunder:

          Amount paid-$15,000 ($2,500 x 6 months)

          Taxes deducted $225.00 (6 months @ $37.50 per month) as determined by reference to
          Chargeable Income-$1,800 (i.e., Annual Pay-$30,000. less deductions-$28,200.).

   3. Determine pay due for period July to December at $2,600 per month. ($2,600 x 6 months)
      Result-$15,600.

   4. Determine revised annual pay. Add amount paid at (2) to result at (3)- $15,000 + $15,600.
      Total $30,600.
   5. Determine tax to be deducted at Chargeable Income $2,400 (i.e., Annual Pay $30,600. less
      deductions $28,200). Result-$600.00
   6. Determine Tax to be deducted for July to December:

          Tax to be deducted from pay      …      …       …      $2,072.00        $600.00
          Less: Tax already deducted       …      …       …      $ 952.00         $225.00
          Balance of tax to be deducted    …      …       …      $1,120.00        $375.00

   7. For months July-December monthly tax deductions should be $375 divided by 6. Result-
      $62.50.

Example “G”-Deductions where there are salary increases which are retroactive.

   1. On June 1, 2003 salary increased from $5,885 per month to $6,125 per month with effect
      May 1, 2001. Total deductions $50,235 ($25,000 Personal allowance + $14,000 Alimony
      and $11,235 other deductions as shown on T.D.1).
   2. Gross amount paid and tax deducted for period January 1 to May 31, 2003 would be as
      shown hereunder:
          Amount paid - $29,425-($5,885x5 months).

         Tax deducted-$2,125. (5 months @ $425 per month) as determined by reference to
         chargeable income $20,385. (i.e. Annual Pay - $70,620. Less deductions $50,235).
   3. Determine pay due for June 1 to December 31, 2003 and tax deductible.

       Pay due June 1 to December 31, 2003 $42,875 ($6,125 x 7 months).

       Taxes deductible $3,412.50 (7 months @ $487.50 per month) as determined by reference to
       chargeable income $23,265. (i.e., Annual Pay-$73,500. Less deductions $50,235).



   4. Determine revised annual pay and annual tax deductible. Add results at (2) and (3).
       Annual pay $29,425 + $42,875 = $72,300.
       Annual tax deductible- $2,125 + $3,412.50 = $5,537.50.

   5. Determine Arrears due for the period May 1, 2002 to May 31, 2003 (13 months).

       ($6,125-$5,885 = $240 per month)
       Arrears $240 x 13 Results-$3,120.

   6. Determine revised Annual Income (Arrears included) and Tax deductible. Add results at (4)
      and (5).
       Annual Income including arrears = $75,420 ($72,300 + $3,120).
       Tax deductible - $6,300 as determined by reference to Chargeable Income $25,185 (i.e.,
       Annual Income $75,420 less deductions-$50,235).

   7. Tax to be deducted on arrears of $3,120 is as follows:
       Tax deductible at (6) minus tax deductible at (4).
       Result-$762.50 ($6,300. - $5,537.50).

Example “H”-Deductions where a resident individual commences employment in Trinidad and
           Tobago for the first time.
       Employment commences August 1, at salary of $6,000 per month.
       Deductions $27,800 ($25,000 personal allowance + $2,800 other deductions as shown on
       T.D.1).
   1. Multiply monthly salary by remaining number of pay periods in the year:
      $6,000 x 5 = $30,000. (Employee’s Gross Income for the year).
   2. Determine chargeable income. Gross income minus deductions: $30,000 - $27,800 = $2,200.
   3. Look down column of tables headed “Chargeable Income” for line $2,001 - $2,200 which
      shows tax to be deducted as $550.
   4. Divide $550 by 5. Result-$110.00 is the amount to be deducted from employee’s earnings for
      each of the months August to December.

Example “I”-Deductions where the tax is paid by the employer on behalf of the employee or
           emoluments are paid free of tax or net of tax.
1. Determination of Chargeable Income
Step 1: (a) Determine annual emoluments inclusive of:

           (i)     Salary/Wages/Fees
           (ii)    Value of free Boarding and Lodging
           (iii)   Motor Vehicle benefits
           (iv)    Entertainment Allowance
           (v)     Overseas travel entitlement
           (vi)    Any other benefits/payments made by the employer

       (b) Deduct $25,000. Personal allowance/Deductions as per T.D. 1

Step 2: Determine into which of the following ranges the result at Step 1 falls:
       Range (a) …      …       …        …     …       …       $0-$37,500.
       Range (b) …      …       …        …     …       …       Over $37,500.

Step 3: Computation of Chargeable Income

       (i) Where the Result per Step 1 falls into Range (a) –
           Multiply the result per Step 1 by 100 and divide by 72:
           Example: Annual Emoluments net of tax-$54,000
           Result per Step 1 ($54,000-$25,000) = $29,000
           Chargeable Income: $29,000 x 100 – 72 = $40,278 (to nearest $).

       (ii) Where Result per Step 1 falls into Range (b).

           $36,000 of the result at Step 1 will relate to chargeable income of $50,000;

           Chargeable income in respect of the excess is determinable by multiplying the excess
           by 100 and dividing by 65.

           Example: Annual Emoluments net of tax-$96,000:

           Result per Step 1($121,000-$25,000)      = $96,000

           Chargeable Income re first                 $36,000 is $50,000.00

           Chargeable Income re excess, i.e.          $60,000
           = $60,000 x 100 – 65                                 = $92,307.69

           Total Chargeable Income                                $142,307.69

2. Determination and Remittance of PAYE

   Having determined chargeable income, PAYE per pay period can be determined as shown in
   the appropriate earlier example.

   PAYE must be remitted to the Board by the Employer on or before the fifteenth day of the
   month following that in which emoluments were payable.

3. Taxpayer’s Total Income
       A taxpayer whose emoluments (inclusive of taxable allowances, the value of free board and
       lodging or any other benefits) are paid free of tax or net of tax is deemed to be paid the
       amount computed as chargeable income + $25,000 Personal allowance. This amount should
       appear in the “Gross Income” column or Deductions as per T.D. 1 of his T.D. 4 (certificate of
       emoluments paid and tax deducted) for the relevant income year.




Example “J”-Deductions where the employee has not filed a T.D. 1 with his employer.
      Gross Income $6,100 per month.

   1. Determine annual income: $6,100 x 12 = $73,200.
   2. Look down column of tables headed “Chargeable Income” for line indicting
      $73,001-$73,200 which shows annual Tax to be deducted $19,460.00
   3. Divide $19,460.00 by 12. Result $1,621.67 is the amount of tax to be deducted per pay
      period.

Example “K”-Deductions in respect of Non-Resident Employees

       Non-Residents are not eligible for deductions or tax credits. As such, non-residents’
       annual income and chargeable income are the same.

       Monthly emoluments-$15,000-Peruid of Employment-4 months.

                    (i)     multiply $15,000 by 4 = $60,000. Employee’s Annual
                            Emoluments/Chargeable Income.
                    (ii)    Look down column of tables headed “Chargeable Income” for line
                            indicating $59,801-$60,000 which shows annual tax to be deducted
                            $15,500.
                    (iii)   Divide $15,500 by 4-Result-$3,875. is the amount of tax to be deducted
                            per pay period.

V. DEDUCTION OF TAX BY EMPLOYER

1. Deduction of Tax on Payment of Emoluments

   Every employer shall deduct tax on the payment of emoluments to any employee or holder of an
   office. Taxable emoluments are those arising or accruing in or derived from or received in
   Trinidad and Tobago. Deduction from pay is required to be made in accordance with the Tax
   Tables. Only the Board of Inland Revenue has the authority to reduce tax deductions of an
   employee as shown on the Tax Tables. The Board will determine the amount to be deducted in
   the following cases:

          (a) where payment is made at other than regular, weekly, fortnightly, monthly or annual
              intervals, e.g. persons paid on a commission basis only;
          (b) in the case of casual or seasonal workers, if tax were deducted according to the Table
              from the six (6) months (say) during which they are employed and the total tax would
              far exceed their liability calculated on an annual basis;
          (c) where the Board decides that the class of employee or nature of the emoluments is
              such as to make the application of the table impracticable;
          (d) in the case of employees with more than one employment;
          (e) where claims are made in respect of deductions for Alimony/Maintenance, premiums
              for deferred annuity plans and interest on loans in respect of owner-occupied property
              and tertiary education expenses.




2. Payments from which Income Tax should not be deducted

   Tax is not to be deducted from emoluments in the following cases:

          (a) where the official emoluments of the employee or holder of office is exempt from tax,
              e.g., the President of the Republic of Trinidad and Tobago
          (b) where the “emoluments” are pensions earned outside Trinidad and Tobago. There
              may be exceptions to this however, where a Double Taxation Agreement exists
              between Trinidad and Tobago and that Country;
          (c) where the total annual emoluments of a resident individual from all sources does not
              exceed $25,000. ($30,000 where the individual is over 60 years of age).

3. Deduction of Tax from Payments related to Termination of Employment

   Before making a payment which can be considered as Severance Pay (whether by reason of
   redundancy or ill-health) or a payment connected with the termination of holding of office
   or employment not otherwise chargeable to tax, the PAYE Section, Board of Inland
   Revenue, Corner Queen and Edward Streets must be supplied with the following
   information:

          (i)     the name and income tax file number of the employee to whom the payment is
                  due;
          (ii)    the reason for the termination of the employment;
          (iii)   the amount payable to each employee;
          (iv)    in the case of retirement on grounds of ill-health, an original medical report from
                  a Medical Practitioner registered with the Medical Board of Trinidad and Tobago
                  or such other body outside of Trinidad and Tobago as the Board may accept;
          (v)     with respect to payments connected with termination of employment or office
                  which would not otherwise be chargeable to tax:

                   (a) where payments are to be made to a spouse, relative or dependant, the
                       names of the spouse/relative/dependant and the circumstances under which
                       the payment is to be made to him/her; and
                    (b) where payment is in the form of a valuable consideration other than money,
                        details of the consideration, the date it is to be given and evidence of its
                        value at that date.

(1) Severance Pay
    For Income Tax purposes, “Severance Pay” is any payment (including any payment in lieu of
    notice) made under a contract of employment to any employee in relation to past services either-

           (a) upon termination of employment by reason of redundancy of the position held by the
               employee; or
           (b) upon retirement or other termination of the employment by reason of ill-health where
               the Board is satisfied, on such evidence as it may require, that ill-health is the reason
               for termination of the employment.

   It is to be noted that a payment made to an employee by reason of voluntary resignation or any
   reason other than redundancy of the position or ill-health would not qualify as Severance Pay.


(2) Payments connected with termination of holding of office or employment not otherwise
    chargeable to tax.

   Caught under this heading are payments not otherwise chargeable to tax which (whether in
   pursuance of any legal obligation or not) are made either directly or indirectly, in connection
   with the termination of the holding of an office or employment or any change in its functions or
   emoluments including any payment in computation of annual or periodical payments whether
   chargeable to tax or not.

   Specifically included as payments under this heading are:

           (a) payments made to the spouse or any relative or dependant of a person who holds or
               has held an office or employment, or made on behalf of or on the order of that person;
               and
           (b) the value of any valuable consideration, other than money, at the date that
               consideration was given.

   Not included as payments under this heading are lump-sum payments made:

           (a) under an approved pension scheme;
           (b) under an approved pension fund plan or approved deferred annuity plan;
           (c) under a fund or contract approved by the Board under section 134(6) of the Income
               Tax Act, Chap. 75:01;
           (d) in connection with the termination of the holding of an office or employment by death
               of the holder or made on account of the injury to or disability of the holder of the
               office or employment.

(3) CALCULATION OF TAX RE: SEVERANCE PAY AND PAYMENT CONNECTED WITH
    TERMINATION OF HOLDING OF OFFICE OR EMPLOYMENT NOT OTHERWISE
    CHARGEABLE TO TAX

           (a) An amount of $100,00.00 is exempt from tax.
          (b) Any amount remaining after deducting (a) above shall be treated as income for the
              year in which the employment is terminated and irrespective of when payment is
              received, shall not be treated as income of any other year and shall be charged
              separately at the average rate of tax of the employee for the immediately preceding
              year of income.

(4) Retirement Severance Benefit

   Before payment of Retirement Severance Benefit is made, the employer must contact the
   Board of Inland Revenue (PAYE Section) for additional guidance.

   (1) When a person receives a retirement benefit, an amount not exceeding $100,000 of such
       benefit is exempt from Income Tax if at the date of his retirement:

          (a) he is not entitled to a pension other than under the National Insurance Act or the Old
              Age Pension Act;
          (b) he is not a member of an approved pension Fund Plan, or of a Fund or Scheme that is
              a Provident Fund; and
          (c) he produces evidence to the satisfaction of the Board of Inland Revenue-

                      (i)    that he has retired from insurable employment within the meaning of
                             the National Insurance Act;
                      (ii)   that he has attained the age of 60 years.

   (2) Calculation of Tax

          (a) an amount of $100,000 of the Retirement Severance is exempt from income tax;
          (b) any amount remaining after the deduction of (a) above is to be included in the
              individual’s chargeable income and charged to tax according to scale rates.

4. T.D. 4 Supplementary

   T.D. 4 certificates are normally supplied to employers by the Board of Inland Revenue each year
   accompanied by instructions for completion and distribution. The Board, however, has no
   objection to employers using Computer Printed T.D 4 certificates provided that:

          (a) the provisions of the income Tax (Employment) Regulations, and any subsequent
              amendments are complied with; and
          (b) a specimen of the form is submitted to the Board initially for approval. Employers
              using the computerized form will be notified by the Board when changes are to be
              made to the form due to amended legislation or any other reasons. Amended forms
              must also be submitted to the Board for approval.

5. Health Surcharge

   With effect from 1st June, 1987, the Board of Inland Revenue became responsible for the
   due computation, collection and recovery of Health Surcharge.

          (1) Rates and method of effecting payments:
                     (a) employees whose monthly income exceeds $469.99 or whose weekly
                         income is more than $109.00, the Health Surcharge to be deducted should
                         be $8.25 per week;
                     (b) employees whose monthly income is less than $469.99 or whose weekly
                         income is less than $109.00, the Health Surcharge to be deducted should
                         be $4.80 per week;
                     (c) Health Surcharge should be deposited with the Board in cash or by
                         certified cheque on Form C-3L on or before the 15th day of the month
                         following the month in which the deduction was made.

          (2) Health Surcharge is not to be deducted from the following:

                     (a) individuals under the age of sixteen (16) years;
                     (b) individuals who have attained the age of sixty (60) years. (Deductions
                         must cease on the day before the individual’s sixtieth birthday).
                     (c) Individuals whose sole source of income is from pensions.




6. Disputes

   If any dispute arises between employer and employee the Board will determine the issue. The
   disputes may include the following:

          (a) the liability to tax of the emoluments;
          (b) whether a claim to a tax deduction is admissible;
          (c) whether emoluments fall within any of the classes for which the Board is to determine
              the tax deductible.

7. Agreements not to Deduct are Void

  Every employer is under an obligation to deduct the tax and any agreement made by such
employer not to withhold or deduct tax is null and void and will attract penalties.

8. Change of Employment

   If an employee changes his job, the deduction of tax by the former employer will, of course,
   cease. The new employer will deduct on the basis of a new T.D. 1 submitted to him by the
   employee.

9. Retirement of Employee

   If a pension is paid after retirement of an employee by the former employer, tax deductions are to
   continue as if no change has occurred. If, however, the pension is paid by a person other than the
   former employer, e.g., the trustees of a pension fund, the pensioner must provide the trustee with
   a T.D. 1 for the purpose of tax deductions.

10. Death of Employee
   If emoluments are due to an employee after his death, deductions are to continue as if he were
   alive.

11. Death of Employer

   If an employer dies (but the business continues) his personal representative must continue to
   make tax deductions.

12. Change of Ownership-Business

   If a business changes hands, the new employer is responsible for the tax deductions.




        VI. PAYMENT AND ACCOUNTING FOR TAX AND HEALTH SURCHARGE

1. Payment of tax to the Board of Inland Revenue

   All taxes deducted must be paid by the employer to the Board on or before the fifteenth (15th)
   day of the month following the month in which the deductions were made. However where a
   person ceases to carry on business, the tax must be paid within seven (7) days after the person
   ceases to carry on business. The prescribed forms which must accompany each payment are:

      C-3F PAYE Tax Deduction Remittance Form, and
      C-3L Health Surcharge Deduction Remittance Form.

2. Penalty for Failure to Deduct and Remit Taxes

   Any person who fails to deduct or to remit the taxes deducted to the Board on or before the date
   prescribed is guilty of an offence and shall pay, unless the Board directs otherwise, in addition to
   the tax payable, an additional amount of 100 per cent (100%) of the tax or forty dollars ($40.00)
   whichever is the greater. Interest is also chargeable on both the tax and the additional amount at
   the rate of twenty per cent (20%) per annum, commencing from the date the payment became
   due to the date of payment.

3. Accounting for Tax Deducted and Keeping Records

   Every person paying emoluments must keep, to the satisfaction of the Board, a record of
   emoluments paid to each employee and taxes deducted from each payment. All records relating
   to the payment of emoluments and taxes deducted must be made available for inspection by the
   Board at the premises of the employer. It is part of a duly authorized Field Officer’s duties to
   inspect these records.

4. Distribution of Certificates of Emoluments Paid and Taxes Deducted
      (i)       On or before the last day of February of each year following the year in which taxes
                including Health Surcharge were deducted, the employer must give the employee two
                T.D. 4 certificates (original and duplicate).
      (ii)      One copy of T.D. 4 certificate (T.D. 4 Supplementary) in respect of each employee,
                must be sent to the Board not later than the last day of February of each year. The
                Board also requires one copy of the T.D. 4 Summary Form which is a statement of
                total emoluments paid to all employees and total tax deducted.

5. When T.D. 4 Certificate to be Delivered

   T.D. 4 Certificates are to be delivered by the employer:

      (1) To the employee and the Board:

                (a) on or before the last day of February of each year following the year in which tax
                    was deducted;
                (b) on cessation of employment; and
                (c) on cessation of a business, not later than one (1) month after.

             (2) Upon the death of an employee-to the legal personal representative or next of kin and
                 the Board, by the fifteenth day of the month following the month in which the death
                 occurred.

6. Reconciliation of Records

                    (a) The total of PAYE and Health Surcharge deductions as per T.D. 4
                        Certificates;
                    (b) The cumulative total on the last Remittance Form for the year in respect of
                        Income Tax and Health Surcharge;
                    (c) The total tax deductions as per T.D. 4 Summary Form.

   PAYE QUARTERLY
7. Accounting for Arrears of Tax

   It is frequently necessary to collect arrears of tax from employees in cases such as-

      (a) where PAYE. Deductions have been insufficient or where there is other income;
      (b) where a “Garnishee Order’’ is served on the employer.

   The Act (Section 112) enables the Board to instruct the employer to deduct such arrears from pay
   in addition to any PAYE Tax due in accordance with these tables. Such arrears of tax deducted
   must be kept quite separate from PAYE. Deductions and must be separately accounted for and
   remitted to the Board of Inland Revenue.

   The Tax deducted through a Garnishee Order must not be shown on the T.D. 4 Certificate

8. Persons Paying Emoluments in the Public Service

   Persons attached to the accounting or sub-accounting units in the Public Service who act as
   “employers” of public servants should refer to Ministry of Finance Circular No. 1 dated 31st
   January, 1979. This Circular sets out the procedure to be adopted and forms to be used when
   paying or accounting for tax deductions.



                                VII. 2002 TAX RATES 1997 – 2002

               Chargeable Income                     Rates of Tax           Income         Tax

   For every dollar of the first $50,000     …           28%                $50,000        $14,000

   For every dollar in excess of $50,000     …           35%




    PAYE QUARTERLY REMMITTANCE RECONCILLATION REPORT
The Board of Inland Revenue wishes to advise that ALL EMPLOYERS are required to complete the
QUARTERLY REMITTANCE RECONCILIATION REPORT.

These reports which are mailed to employers should be reproduced, completed and submitted
quarterly to the PAYE section, Victoria Courts, Cor. Queen and Edward Streets, Port of Spain by the
end of the month following the quarter being reported on, i.e. Quarterly reports are due on April 30th,
July 31st, October 31st and January 31st.

Information contained on this Form represents cumulative totals of PAYE and Health Surcharge
deducted; salaries, wages, bonus, pensions and benefits paid; and allowable Deductions granted to
each employee of the organization. All information must be recorded accurately.

Persons who have not received copies in the mail can obtain blank forms at the Miscellaneous Taxes
Unit, Victoria Courts Corner Queen and Edward Streets, Port of Spain.

The Board will accept the information on diskette, as long as the designated format is maintained.

The Reconciliation Reports lend to the effective functioning of the PAYE System.

Further information can be had by contacting the PAYE Section at 625 2127 or the Taxpayer
Relations Section at 623 7106 ext 321.

Taxpayer Relations Section
Inland Revenue Division

				
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