Income Tax Department, Belize

Part I apply to gains or profits from trade, business, profession or vocation, and employment. This Part allows businesses to file Income Tax Returns as an option. However the prevalent tax for businesses is the Business Tax. Businesses are required to file their financial statements under this part if they wish to get a credit for Income Tax (see Section 21).

Employed individuals are required to file returns under part 1 as well. Section 16 of the Act provides information regarding the threshold and deductions allowed for employed persons. The taxes are collected at source under the Pay As You Earn (PAYE) system, introduced through Statutory Instrument No. 52 of 1970.

This PAYE system has been in effect since 1971, and requires employers to withhold tax from employees’ emoluments, and remit it to the Tax Administration on a monthly basis by the 10th day following the end of the month. Tax tables are provided by the Department to assist with tax calculation and compliance.

Income Tax has a flat rate of 25% that is applicable to both individuals and companies. The threshold is $20,000.00 (U.S.$10,000.00) (see Section 16). The only deductions allowed before arriving at the chargeable income are those in respect of Basic Personal Relief of $19,600.00, charitable contributions of not less than $250.00 and not more than one-sixth of the chargeable income after Basic Personal relief and Education Relief (see Section 17).

Non-resident persons should note that they are not entitled to the allowance of the $20,000 p.a. threshold, basic personal relief allowance or the statutory tax exemption of $100 for Income Tax purposes. A non-resident person is one who is not in the country of Belize for one hundred eight–two days or more in the aggregate with in the basis year.

TRADE LOSSES can be converted to a tax credit for business tax purposes (discussed below). Any excess may be carried forward to subsequent years, providing that the same person carries on the business or profession. This loss carry forward is now restricted to five and seven years for businesspersons and farmers respectively.

Dead Lines
Employers are required TO FILE employees’ TD4 summary and Supplementaries by last day of February, and Personal Income Tax returns are required by 31st March.

Taxation on petroleum products is assessable on the profits of any person carrying on petroleum operations in the country of Belize. Petroleum operations is defined as

“operations related to the exploration, development, extractions, production, field separation, transportation, storage, sale or disposal of petroleum, but does not include any transportation or other operations”

The rate of tax charged on petroleum profits is forty percent (40%) and should be paid by quarterly instalment payments. The due date for filing is three (3) months following the end of the basis period (fiscal year).

Business tax is a tax on all gross receipts of persons as set out below:

Taxable persons:	Self-employed persons, firms, partnership or company, whether corporate or unincorporated
Taxable Receipts:	All revenues, whether in cash or in kind, or whether received or accrued, of a person or entity carrying on trade or business, or practising his or its profession or vocation in Belize, without any deduction except as provided below.
	(a)	Trade or business – Threshold $75,000 p.a. where such trade, business, profession or vocation forms the sole source of livelihood of person.
	(b)	Profession or vocation - -Threshold $20,000 p.a. where such profession or vocation forms the sole source of livelihood of person.
	(c)	Rental Receipts form Property – Threshold $800 monthly where such rental receipts forms the sole source of livelihood of person.
Deductions Allowed:	Charitable contributions of $500 minimum and $30,000 maximum, and credits generated through trade losses agreed with the Department.
Receipts excluded:	Revenue Replacement duty on fuel, Excise duty, Hotel accommodation tax, Sales tax, funds received as an agent.

Dead Lines:

Due dates for filing falls into three categories.

	(i)	Trade, Business, Profession, and other sources other than Financial Institutions and Rental Income only, the due date is monthly by the fifteenth (15th) day following the end of the month.
	(ii)	Financial Institutions are required to filed quarterly by the fifteen (15th) day following the end of the quarters end

Major Features

The business tax operates as the prevalent tax, and has a hybrid connection to Income Tax. The Act stipulates that if the Business Tax is less than the Income Tax payable, the excess Income Tax shall be “remitted”(waived). Conversely, the ‘excess of any Business Tax paid by any person…over the Income Tax due…shall be carried forward as an expense to the next basis year’. In practical terms, this will only affect the Business Tax payable when this carry-forward generates a loss, one of only two conditions to directly reduce the Business Tax. These two provisions mean that these ‘persons’ are still required to file Income Tax returns.

Rates

The business tax rates range from 0.75% (on the sale of fuel and lubricants) to 25% (withholding tax on non-residents). These are set out at Annex I.

Double Tax Agreements

The agreements in effect are those with the United Kingdom, Austria and CARICOM Countries.

Fiscal Incentives

Tax holiday concessions may be granted under the Fiscal Incentives Act. However, the most recent concessions have granted only import duty exemptions. There are a few companies that still have valid incentives, but these do not affect their tax liability under Business Tax.

RATES OF BUSINESS TAX

(1)	Receipts from radio, on air television and newspaper business ……remains at		0.75%
(2)	Receipts from domestic airline business ….. increases from 0.75 to		1.75%
(3)	Receipts from service stations for fuel and lubricants …… remains at		0.75%
(4)	Receipts for other trade, trade and business increases from 1.25% to		1.75%
(5)	Rents, royalties, premiums and any other receipts from real property (Excluding the receipts from Real Estate Business) …. remains at		3%
(6)	Receipts from a profession, vocation or occupation increases from 4% to		6%
(7)	Receipts from an insurance company licensed under the Insurance Act …….. increases from 1.5% to		1.75%
(8)	Commissions, royalties, discounts, dividends winnings from lotteries, slot machines, and table games and interest on loans paid to non-residents ……. remains at		15%
	Provided that in the case of commissions of less than $25,000.00 Per annum, the rate shall be		5%
(9)	Receipts of a financial institution under the Banks and Financial Institutions Act increases from 10% to		15%
	Provided that a Financial Institution within a PIC Group ………. increases from 4% to		8%
(10)	Management fees, rental of plant and equipment and charges for technical services:-
	(a) paid to a non-resident……….		25%
	(b) paid to resident ……………..	The rate applicable to the particular trade business, profession, vocation or occupation of the payee.
(11)	Receipts of entities providing telecommunications services remains at		19%
(12)	Gross earnings from Casinos or licensed gaming premises		15%
(13)	Gross earnings from real estate business		15%