NO. 15/2016 DATE: March 31, 2016
IRD ADVISES BUSINESSES ON CURRENT ANNUAL STAMP TAX RATES
ST. GEORGE’S, GRENADA, Thursday, March 31, 2016: The following relates to the calculation of Annual Stamp Tax based on ACT NO.40 of 2015 of the amended Annual Stamp Tax Act Cap. 16A, which became effective for the tax period 2016.
Based on the amendment, the following applies for calculating the Annual Stamp Tax liability:
· 0.75% for businesses with gross receipts in the amount of $300,000 and above, per annum;
· 0.50% for businesses with gross receipts under $300,000, per annum.
The principal Act requires the AST calculations to be done on the prior’s year receipts (i.e., 2015 receipts will be used to calculate 2016 AST liability).
However, Inland Revenue Division (IRD) has taken the following position for entities whose financial year span the period 2014/2015, with a fiscal year-end prior to December 31st, 2015: IRD would apportion the gross receipts used to calculate the AST liability based on the number of months in 2014 versus 2015. The 0.50% rate would be applied to 2014 months and the 0.75% rate to 2015 months.
In order to be eligible for the above treatment, Taxpayers must meet all of the following criteria:
Fiscal year-end prior to December 31, 2015 and gross receipts exceeding $300,000;
Already filed and paid or has started making installment payments as of March 31, 2016; and,
Must make an application for the relevant adjustments on or before April 15, 2016.
Accounts that would have been adjusted due to the aforementioned treatment have until August 31, 2016 in which to make payments, if any. Please note that the compromised treatment will only apply if the conditions of application and payment are met.