Tax holiday

(1) Subject to sub-section 9 and to paragraph (c), every order made by the Minister under section 4 shall specify– (a) the duration of the tax holiday period, which shall normally be of not more than five years duration commencing from the date of production; and (b) the annual percentage rates at which the profits and gains of the approved enterprise shall be exempt from the payment of income tax under the Income and Business Tax Act during the tax holiday period, Provided that the Minister may, in a fit and proper case, on application made by the company, review its operations and renew its tax holiday period for a further term not exceeding ten years; (c) in the case of a company which is engaged in agriculture, agro-industry, food-processing, 11 mariculture or manufacturing and whose operation is highly labour intensive and whose production is strictly for export, the tax holiday period may be for a maximum of twenty-five years. (2) During the tax holiday period, all profits and gains accruing to the approved enterprise and arising from the production of the approved product or service shall be partially exempt from income tax under the Income and Business Tax Act, at the annual percentage rates specified by the Minister as provided in sub-section (1)(b) above. CAP. 55. (3) If the end of the tax holiday period does not coincide with the end of the financial year of the approved enterprise, the income attributable to the tax holiday period only shall be exempt from income tax at the annual percentage rates specified by the Minister as provided in sub-section (1)(b). (4) Subject to the limitations contained in sub-sections (5) and (6), where an approved enterprise is conducted by a company, any dividends or other profits arising out of such (a) during the tax holiday period of such enterprise; and (b) paid to shareholders during the said period, on shares issued during such period, shall not be taken into account in ascertaining the chargeable income of such shareholders. (5) The provisions of sub-section (4) shall only apply where the total amount of dividends or profits paid to a shareholder, as therein mentioned, does not exceed an amount which is equivalent to the total amount invested by the shareholder in the approved enterprise during its tax holiday period. 12 (6) The provisions of sub-section (4) shall not apply to any shareholder who would become liable by the laws of his country of residence to pay additional income tax owing to the fact that the dividend he received hereunder was not subject to income tax in Belize. CAP. 55. (7) An approved enterprise enjoying partial relief from income tax shall, notwithstanding the relief granted, be subject in all other respects to the provisions of the Income and Business Tax Act, including the filing of annual returns. CAP. 55. (8) To the extent that an approved enterprise is partially exempt from income tax during a tax holiday period at the rates specified by the Minister as provided in sub-section (1)(b) of this section, the approved enterprise shall be deemed to be a specified development industry or project for the purpose of the Income and Business Tax Act. (9) Notwithstanding the provisions of this section it shall be open to the Minister to order that no tax holiday shall be granted to an enterprise under this Act.