New Tax Administration online services

1. New Tax Administration online services January 1, 2009

2. The IRD is moving towards online services • The Department will be offering a number of Internet services that will be… • secure, • safe, • fast, • convenient, • straightforward. The new system will become operational on January 1, 2009

3. New Tax Administration System • Taxpayers will be able to use the Internet to: • Get a unique user • identification number • and a password, • Register, • Update Identification information, • Prepare and file their tax (individual income tax, corporation tax, reverse tax credit, partnership etc.) and information returns,

4. New Tax Administration System • Authorize their accountants or tax agents to file returns and complete services on their behalf, • Request Tax Clearance Certificates, • File objections and query the status of their returns, • Obtain services and file returns from the comfort of their home, work or from any location (with access to the Internet) that is convenient to them and more…

5. Attachments and… the New Tax Administration System • No attachments will be sent to the IRD with returns, whether filed electronically or on paper • Taxpayers must retain all supporting documents for presentation to the IRD if required (audit)

6. PAPER!… Much less paper! • Although discouraged… • traditional paper filing • and services will remain • File Electronically • Save Time • Save Paper

7. Benefits and Advantages • Faster processing of taxpayers' returns, • Faster refunds, • Faster Reverse Tax Credits, • More efficient tax administration, • Save time, money and paper, • System performs many calculations, • Avoid transposition and arithmetical errors, • Check account status online, • Immediate confirmation of return filed status

8. Third Party Information

9. Third Party Information and Tax Administration • Tax related information regarding a taxpayer, provided to the tax administration by someone other than the taxpayer him/herself • The third party information is used by the tax administration to cross-reference and validate tax related information provided by the taxpayer

10. Third Parties and the new tax administration system Many institutions and organizations will be providing their client information to the IRD including • Employers, • Insurance and mortgage companies, • Credit Unions, banks and other financial institutions, • Pension plan providers, • Securities Stock Exchange, • Co-operative societies, • Registered Trade Unions, • Government departments, • National Insurance Scheme (NIS)

11. Examples of third party information • Statements of remuneration paid and deductions • Statements of payments for the supply of goods and services • Statements of amounts withheld (new) • Interest • Mutual fund early redemption • New shares in public company early redemption • Tax deductible contributions (new) • News shares in a public company • Residential (Owner occupied) mortgage interest • Insurance premiums on residential property • Miscellaneous Income (new) • Superannuation/Pension payments • Taxable NIS benefits

12. Third Party Information Cross-Reference and Validation Process Tax Return Examination Contact Reassessment Validation Valid? No IRD Data Base Yes Third Party Information

13. Statement of Remuneration Paid and Deductions A47:009 Income Tax Deducted $500 Tax Return Income Tax Deducted $1,000 Examination/Contact - Reassessment or Adjustment

14. PAYE

15. PayAsYou Earn (PAYE) • Employers provide the largest amount of third party information to the IRD • Most important element to cross reference employment income and tax deductions on individual income tax returns with corresponding information provided by employers

16. Specifications for the transmission of PAYE (A47:009) information to IRD Four options will be available to file year-end information returns with the IRD: Internet File Transfer - directly to the IRD over the Internet via XML schema(preferred option); Web Forms – file information directly to the IRD using a web form template; Electronic filing - (XML schema) by CD or diskette; Manual filing, Traditional preparation of information return on paper and filing with the IRD

18. The NRN key to e-filing

19. NRN and the IRD Taxpayer’s are encouraged to provide their correct NRN to their employers and other third party information providers to ensure that they get proper credit for taxes deducted, income earned and tax deductible contributions made.The NRN is the key to cross referencing information and identifying taxpayers The IRD uses the National Registration Number (NRN) as a Taxpayer Identification Number (TIN)

20. NRN and the IRD However, the presence of invalid NRN’s jeopardizes this efficiency. In these cases, the IRD will have to suspend return processing and undertake investigation to validate NRNs before processing the IncomeTax Return. Electronic filing enables the IRD to efficiently process income tax returns and issue refunds considerably faster than paper filing.

21. How Does the IRD Utilize the NRN?

22. IRD Contacts http://www.barbados.gov.bb/ird/ Marvin Ishmael Project Manager ishmaelmarvin@gmail.com Phone: 430 3107 Dennis Brereton Elson Browne PAYE Audit denbrer@hotmail.com enalbrowne@hotmail.com Phone: 430 3157/ 3174