Thank you for visiting our site. Listed are Frequently Asked Questions concerning Payroll Tax and Land Tax obligations. If you have any further questions, please contact us.

Frequently Asked Questions on Payroll Tax

1. Registration
2. Part Time vs. Full Time Employment
3. Caregivers
4. Notional Remuneration
5. Approved Schemes
6. Benefits
7. Musicians or Entertainers
8. Directors

Frequently Asked Questions on Land Tax

1. Why do we pay taxes?
2. Why a tax on land?
3. Who has to pay Land Tax?
4. Who may receive relief from Land Tax?
5. When is Land Tax payable?
6. Who determines the rate of tax?
7. What is the basis of valuation for Land Tax?
8. Where do I find the ARV of my property?

Frequently Asked Questions On Payroll Tax

Registration

1. When do I have to register my business with the Tax Commissioner?

Every person liable for tax must register with the Office of the Tax Commissioner within seven days of the end of the first tax period in which he/she commences business.

2. Is there a fee for registration?

There is no fee for registration.

3. Can my secretary sign my registration form?

Yes, if acting as your representative. Partnerships require the signatures of all the partners.

Part Time vs. Full Time Employment

1. I work part time for myself and full time for someone else.  Shouldn't my full time employer have to pay tax?

Your employer is liable for tax on remuneration he pays to you. However, if you also employ yourself, you are liable for tax from your part time employment because you are considered self-employed.

2. If a person works for me part time, do I have to report him or her?

It depends on the number of hours and the type of employment. The remuneration of full time students is not subject to taxation if they work on Saturdays, public holidays or vacation periods. The remuneration of part time employees employed for 16 hours or less in any one calendar month is not subject to taxation. However, this does not apply to musicians, entertainers or salesmen.

Caregivers

Why isn't my caregiver considered self-employed?

A person who renders services to you is considered to be your employee. However, if such a person is carrying on business as a self-employed person providing services for several other persons and not subject to the direction or control of any one such other person, he/she is deemed to be self-employed.

Notional Remuneration

1. What is notional remuneration?

Notional remuneration is the fair and equitable valuation of services rendered by an individual to a business. It applies to self-employed persons or deemed employees. It is assessed on the basis of services rendered to a business.

2. If I do not pay myself a salary, why do I have to report notional remuneration?

Services which a self-employed person or deemed employee provides to the business have a value which is subject to tax.  Additionally, a self-employed person or deemed employee has access to resources of the business other than salaries.

3. Who is required to pay tax on notional remuneration?

Every person who owns a business and works in that business is deemed to earn a salary. Examples of such self-employed persons include farmers, taxi operators, consultants, doctors, partners, members of the Governing Body of an Association and shareholders of a company.

4. How is notional remuneration calculated?

A value for notional remuneration is determined in the first instance by the taxpayer. The taxpayer establishes a value by looking at such factors as (1) the nature and extent of the services he provides to the business including any such services which directly or indirectly affect or influence the financial viability of the business, (2) his own experience and special skills, (3) the nature of the business, (4) the emoluments of  (a) persons engaged in other businesses who render services to those businesses similar to those rendered by himself, (b) persons engaged in the business who render services similar to those of himself and (c) persons engaged in the business other than those previously mentioned and (5) the financial records of the business, which show his services which generate revenue for the business and the allocation to him of benefits from the business.  The Tax Commissioner has the authority to adjust the taxpayer's determination of notional remuneration if it is foundto be unreasonable.  Notional remuneration should be evaluated annually and adjusted at least by the increase in the Consumer Price Index.

Approved Schemes

1. If I got my retirement/health scheme from any of the major insurers, isn't it approved?

A scheme is only approved for the purpose of Payroll Tax when approved by the Minister of Finance.

Benefits

1. What is a reasonable amount to report if we provide rent free accommodation for our employees?

You are required to report at least the rental value as determined under the Land Valuation and Tax Act 1967 and in the absence of such valuation, a fair monthly market rent.

Musicians or Entertainers

1. If someone is engaging a musician or entertainer and strongly believes that this will not be done on a continuous basis, does the person engaging the musician have to register?

Yes.  Any person who engages a musician or entertainer is considered to be their employer and is liable for Payroll Tax irrespective of the musician or entertainer's age or number of hours engaged.

2. Are motivational speakers considered entertainers?

Motivational speakers are not generally considered entertainers.

Directors

Are directors of company boards liable for Payroll Tax?

The remuneration of directors is subject to Payroll Tax.

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