Regulations

(1) The Minister may make regulations for the better carrying out of the provisions of this Part and for prescribing anything that needs to be prescribed. (2) All regulations made by the Minister under this Part shall be laid before the National Assembly as soon as may be after the making thereof and shall be subject to negative resolution. -------------------------------------- 104 SCHEDULE I3 Repealed 3 This Schedule was repealed by Act No. 8 of 2019. Income and Business Tax 105 SCHEDULE II Praecipe to Levy by Sale of Lands or Houses [section 71(3)] BELIZE By -------------------------Chief Income Tax Collector of Belize. TO --------------------------------------------the Sub-Treasurer (or) Revenue Officer in charge of the District. WHEREAS the lands or houses of the several persons named in the List to this Warrant attached are respectively liable under for the several amounts set opposite their respective names: AND WHEREAS the lands or houses named in the said list are likewise respectively liable for the amount aforesaid whether or not the persons named are in possession thereof: AND WHEREAS default has been made in payment of the said amounts: YOU are therefore hereby enjoined and required to levy upon and sell the lands of which the several persons named in the said List are possessed, or a sufficient part thereof, to satisfy the amounts set opposite their respective names as aforesaid together with the costs attending any such levy and sale and all other proceedings consequent thereon. AND in default of satisfaction thereby, then, if the persons named are not now in possession of the lands or houses named in the said List, you are hereby enjoined and required to levy upon the lands or houses last mentioned. And of your proceedings herein you are to make Returns to me at the end of every calendar month commencing from the date hereof until your final Return which you are to make to me on or before the thirtieth day of April next. GIVEN under my hand at Belize City, Belize, the.....…...day of…...… ……………………………………………. Chief Income Tax Collector 106 Income and Business Tax SCHEDULE III Notice to Defaulter [section 72] BELIZE By ----------------------------------Chief Income Tax Collector of TO ----------------------------------Defaulter TAKE NOTICE that you are hereby required to fill in the following form with the statements and information thereby required, to sign the same and to deliver it within seven days from the date of the service thereof to the Officer in charge of the Revenue Office of the District in which you live. AND FURTHER TAKE NOTICE that in default of your delivering such form duly filled in and signed as aforesaid, you will be liable to a fine not exceeding twenty-five dollars. Income and Business Tax 107 FORM Do you admit that you owe $ ................................... for Income Tax and $ .................................for fines in respect of .............? If the whole of the above-mentioned amount is not owing by you, state how much is owing by you. If the above-mentioned amount or any part thereof is not owing by you, but is owing by some other person, state the name of that person. Have you any right, title or interest in the following properties? If you have, state the nature of your interest therein. ..................................................................................................... ..................................................................................................... ..................................................................................................... State any reason you may have for claiming that your property should not be sold to satisfy the amount due by you. DATED this ……………...….day of…………….…. 20….… TO CHIEF INCOME TAX COLLECTOR Served by me on the………………..day of….……… 20…...... --------------------------------------------- Bailiff or Server 108 Income and Business Tax SCHEDULE IV4 Repealed. 4 This Schedule was repealed by Act No. 8 of 2019. Income and Business Tax 109 SCHEDULE V Allowances for Tear and Wear [section 12] ARRANGEMENT OF ALLOWANCES 1. Years of assessment affected. 2. Interpretation. 3. Owner and relevant interest. 4. Sale of buildings. 5. Annual allowances. 6. Asset to be in use at end of basis period. 7. Balancing allowances. 8. Balancing charges. 9. Residue. 10. Meaning of “disposed of”. 11. Value of an asset. 12. Apportionment. 13. Part of an asset. 14. Extension of meaning of “in use”. 15. Exclusion of certain expenditure. 16. Application to lessors. 17. Asset used or expenditure incurred partly for the purposes of a trade or business. 18. Disposal without change of ownership. 19. Application to professions, vocations and employments. 20. Partnerships. 21. Allowances made. 22. Claims for allowances. 23. Election in double taxation cases. 24. Manner of making allowances and charges. 1. The provisions of this Schedule with respect to the making of allowances and charges shall have effect for the year of assessment commencing on the 1st January 1964, and for each succeeding year of assessment and any references in this Years of assessment affected. 110 Income and Business Tax Schedule to a year of assessment do not include any year of assessment commencing prior to the 1st January 1964, except where specific reference is made in allowance 16 to the year of assessment commencing on the 1st January 1963. Interpretation. 2. For the purposes of this Schedule“lease” includes an agreement for a lease where the term to be covered by the lease has begun, any tenancy and any agreement for the letting or hiring out of an asset, but does not include a mortgage, and the expression “leasehold interest” shall be construed accordingly and– (a) where, with the consent of the lessor, a lessee of any asset remains in possession thereof after the termination of the lease without a new lease being granted to him or her, that lease shall be deemed for the purposes of this Schedule to continue so long as he remains in possession as aforesaid; and (b) where, on the termination of a lease of any asset, a new lease of that asset is granted to the lessee this Schedule shall have effect as if the second lease were a continuation of the first lease; “qualifying expenditure” means, subject to the express provisions of this Schedule, expenditure incurred in a basis year which is– (a) capital expenditure (in this Schedule called “qualifying plant expenditure”) incurred on plant, machinery or fixtures; (b) capital expenditure (in this Schedule called “qualifying industrial building expenditure”) incurred on the construction of industrial buildings, structures or works of a permanent Income and Business Tax 111 nature, other than expenditure which is included in sub-allowance (a) of this definition. For the purposes of this definition where– (i) expenditure is incurred for the purposes of a trade or business by a person about to carry on such trade or business, and (ii) that expenditure is incurred in respect of an asset owned by that person, if that expenditure would have fallen to be treated as qualifying expenditure if it had been incurred by that person on the first day on which he carries on that trade or business, that expenditure shall be deemed to be qualifying expenditure incurred by him on that day; “trade or business” means a trade or business or that part of a trade or business the profits of which are assessable under this Act; “industrial building or structure” means any building or structure in regular use– (i) as a mill, factory, mechanical workshop, or other similar building, or as a structure used in connection with any such buildings; (ii) as a dock, port, wharf, pier, jetty or other similar building or structure; (iii) as a storehouse or for housing any plant and in either case used wholly and exclusively for or in connection with either any building or structure mentioned in provisions (i) or (ii); 112 Income and Business Tax (iv) for the operation of a railway for public use or of a water, or electricity undertaking for the supply of water or electricity for public consumption; (v) for husbandry or the working of a plantation or forestry enterprise; (vi) as a dwelling, or building or structure constructed for occupation by, or for the welfare of, employed persons whose duties are performed or mainly performed in the industrial buildings or structures falling with (i), (ii), (iii), or (iv) or who are engaged in husbandry or who are working on the land or in a factory on a plantation or forestry enterprise; (vii) as a warehouse, whether refrigerated or not, wholly, exclusively and regularly in use for the hire of storage space to the public, and any dwelling wholly, exclusively and regularly in use by employees of the owner of such dwelling whose duties are solely concerned with the running of any such warehouse; CAP. 285. “qualifying hotel” means a hotel registered under the Hotels and Tourist Accommodation Act which complies with the following requirements– (a) it is open for at least four months (one hundred and twenty days) in the season, which means the seven months from first September to thirty-first March; Income and Business Tax 113 (b) that during the time when it is open in the season– (i) it has at least ten letting bedrooms; (ii) the sleeping accommodation offered at the hotel consists wholly or mainly of letting bedrooms; and (iii) the services provided for guests normally include the provision of breakfast and an evening meal, the making of beds and the cleaning of rooms. Owner and relevant interest. 3.–(1) For the purposes of this Schedule, where an asset consists of an industrial building, structure or works the owner thereof shall be taken to be the owner of the relevant interest in such building, structure or works. (2) Subject to this paragraph, in this Schedule, the expression “the relevant interest” means, in relation to any expenditure incurred on the construction of an industrial building, structure or works, the interest in such industrial building, structure or works to which the person who incurred such expenditure was entitled when he incurred it. (3) Where, when he incurs qualifying industrial building expenditure on the construction of an industrial building, structure or works, a person is entitled to two or more interests therein, and one of those interests is an interest which is reversionary on all the others, that interest shall be the relevant interest for the purposes of this Schedule. 4. Where capital expenditure has been incurred on the construction of an industrial building, structure or works and thereafter the relevant interest therein is sold, the person who buys that interest shall be deemed, for all the purposes of this Schedule, to have incurred, on the date when the purchase price Sale of buildings. 114 Income and Business Tax became payable, capital expenditure on the construction thereof equal to the price paid by him for such interest or to the original cost of construction whichever is the less, Provided that, where such relevant interest is sold before the industrial building, structure or works has been used, the foregoing allowance shall have effect with respect to such sale and the original cost of construction shall be taken to be the amount of the purchase price on such sale, Provided also that where any such relevant interest is sold more than once before the industrial building, structure or works is used, the foregoing proviso shall have effect only in relation to the last of those sales. Annual allowances. 5.–(1) Subject to this Schedule, where in his basis year for a year of assessment the owner of any asset has incurred in respect thereof qualifying expenditure wholly and exclusively for the purposes of a trade or business carried on by him, there shall be made to that person for each year of assessment, in his basis year for which that asset was used for the purposes of that trade or business, an allowance (in this Schedule called “an annual allowance”) at the appropriate rate per centum, mentioned in sub allowance(2), of the residue of such expenditure at the end of the basis year for that year of assessment, Provided that where the basis period for any year of assessment is a period of less than one year any such allowance for that year of assessment shall be proportionately reduced. (2) The said rate shall in the case of– (a) qualifying industrial building expenditure be at the following rates, Buildings housing machinery 5% Reinforced concrete buildings 2½% Wooden and other buildings 3% 32 of 1987. (b) qualifying hotel building be four per centum; Income and Business Tax 115 (c) qualifying plant expenditure, be such rate per centum as shall be determined by the Commissioner to be just and reasonable having regard to the working life of the asset and to the estimated value thereof at the end of such working life. Asset to be in use at end of basis period. 6. An annual allowance in respect of qualifying expenditure incurred in respect of any asset shall only be made to a person for a year of assessment if at the end of his basis period for that year he was the owner of that asset and it was in use for the purposes of a trade or business carried on by him. Balancing allowances. 7. Subject to this Schedule, where in his basis period for a year of assessment the owner of an asset, who has incurred in respect thereof qualifying expenditure wholly and exclusively for the purposes of a trade or business carried on by him, disposes of that asset an allowance (in this Schedule called “a balancing allowance”) shall be made to that person for that year of the excess of the residue of that expenditure, at the date such asset is disposed of, over the value of that asset at that date, Provided that a balancing allowance shall only be made in respect of such asset if immediately prior to its disposal it was in use by such owner in the trade or business for the purposes of which such qualifying expenditure was incurred. 8. Subject to this Schedule, where in his basis period for a year of assessment the owner of an asset, who has incurred in respect thereof qualifying expenditure wholly and exclusively for the purposes of a trade or business carried on by him, dispose of that asset, a charge (in this Schedule called “a balancing charge”) shall be made on that person for that year of the excess of the value of that asset, at the date of its disposal, over the residue of that expenditure at that date, Balancing charges. Provided that a balancing charge shall only be made in respect of such asset if immediately prior to its disposal it was in use by such owner in the trade or business for the purposes of 116 Income and Business Tax which such qualifying expenditure was incurred and shall not exceed the total of any allowances made under this Schedule in respect of such asset. 9.–(1) The residue of qualifying expenditure, in respect of any asset, at any date, shall be taken to be the total qualifying expenditure incurred on or before that date, by the owner thereof at that date, in respect of that asset, less the total of any annual allowances made to such owner, in respect of that asset, before that date. (2) For the purposes of this paragraph, an annual allowance shall be deemed to be made at the end of the basis year for the year of assessment for which any such allowance is made. Meaning of “disposed of. 10. Subject to any express provision to the contrary, for the purposes of this Schedule– (a) an industrial building, structure or works of a permanent nature is disposed of if any of the following events occur– (i) the relevant interest therein is sold; or (ii) that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon; or (iii) the industrial building, structure or works of a permanent nature are demolished or destroyed or, without being demolished or destroyed, cease altogether to be used for the purposes of a trade or business carried on by the owner thereof; Income and Business Tax 117 (b) plant, machinery or fixtures are disposed of if they are sold, discarded or cease altogether to be used for the purposes of a trade or business carried on by the owner thereof. Value of an asset. 11.–(1) The value of an asset at the date of its disposal shall be the net proceeds of the sale thereof or of the relevant interest therein, or, if it was disposed of without being sold, the amount which, in the opinion of the Commissioner, such asset or the relevant interest therein, as the case may be, would have fetched if sold in the open market at that date, less the amount of any expenses which the owner might reasonably be expected to incur if the asset were sold. (2) For the purpose of this paragraph, if an asset is disposed of in such circumstances that insurance or compensation monies are received by the owner thereof, the asset or the relevant interest therein, as the case may be, shall be treated as having been sold and as though the net proceeds of the insurance or compensation monies were the net proceeds of the sale thereof. 12.–(1) Any reference in this Schedule to the disposal, sale or purchase of any asset includes a reference to the disposal, sale or purchase of that asset, as the case may be, together with any other asset, whether or not qualifying expenditure has been incurred on such last-mentioned asset, and, where an asset is disposed of, sold or purchased together with another asset, so much of the value of the assets as, on a just apportionment, is properly attributable to the first-mentioned asset shall, for the purposes of this Schedule, be deemed to be the value of or the price paid for that asset, as the case may be. Apportionment. (2) For the purposes of this sub-paragraph, all the assets which are purchased or disposed of in pursuance of one bargain shall be deemed to be purchased or disposed of together, notwithstanding that separate prices are or purport to be agreed for each of those assets or that there are or purport to be separate purchases or disposals of those assets. 118 Income and Business Tax (3) Sub-paragraph (1) shall apply, with any necessary modifications, to the sale or purchase of the relevant interest in any asset together with any other asset or relevant interest in any other asset. Part of an asset. 13. Any reference in this Schedule to any asset shall be construed whenever necessary as including a reference to a part of any asset (including an undivided part of that asset in the case of joint interests therein) and when so construed any necessary apportionment shall be made as may, in the opinion of the Commissioner, be just and reasonable. Extension of meaning of “in use”. 14.–(1) For the purposes of this Schedule, an asset shall be deemed to be in use during a period of temporary disuse. (2) For the purposes of allowances 5 and 6– (a) an asset in respect of which qualifying expenditure has been incurred by the owner thereof for the purposes of a trade or business carried on by him or her shall be deemed to be in use, for the purposes of that trade or business, between the dates hereinafter mentioned, where the Commissioner is of the opinion that the first use to which the asset will be put by the person incurring such expenditure will be for the purposes of that trade or business; (b) the said dates shall be taken to be the date on which such expenditure was incurred and the date on which the asset is in fact first put to use, Provided that where any allowances have been given in consequence of this sub-paragraph and the first use to which such asset is put is not for the purposes of such trade or business, all such additional assessments shall be made as may be Income and Business Tax 119 necessary to counteract the benefit obtained from the giving of any such allowances. Exclusion of certain expenditure. 15. Where any person has incurred expenditure which is allowed to be deducted, in computing the gains or profits of his trade or business under section 12 of this Act, such expenditure shall not be treated as qualifying expenditure. Application to lessors. 16.–(1) Where the owner of an asset– (a) has incurred capital expenditure in respect thereof for the purposes of leasing that asset for use wholly and exclusively for the purposes of a trade or business carried on or about to be carried on by a person; (b) leases the asset to such person; and (c) during the whole or part of the term of the lease, the asset is used wholly and exclusively by such person in such trade or business, this Schedule shall apply, with such necessary modifications as the Commissioner may direct, as though such expenditure were incurred wholly and exclusively for the purposes of a trade or business carried on by the owner from the date when such expenditure was incurred and as though the owner were using the asset for the purposes of such last-mentioned trade or business in the way in which and for the period or periods during which the asset is in fact used in the first-mentioned trade or business. (2) For the purposes of this paragraph in relation to the trade or business which an owner is to be treated as carrying on, his basis year for any year of assessment shall be taken to be the year immediately preceding that year of assessment. 120 Income and Business Tax 17.–(1) This paragraph shall apply where either or both of the following conditions apply with respect to any assetAssets used or expenditure incurred partly for the purposes of a trade or business. (a) the owner of the asset has incurred in respect thereof qualifying expenditure partly for the purposes of a trade or business carried on by him and partly for other purposes; (b) the assets in respect of which qualifying expenditure has been incurred by the owner thereof is used partly for the purposes of a trade or business carried on by such owner and partly for other purposes. (2) Any allowances and any charges which would be made if both such expenditure were incurred wholly and exclusively for the purposes of such trade or business and such asset were used wholly and exclusively for the purposes of such trade or business shall be computed in accordance with this Schedule. (3) So much of the allowances and charges computed in accordance with sub-paragraph (a) shall be made as in the opinion of the Commissioner are just and reasonable having regard to all the circumstances and to the provisions of this Schedule. Disposal without change or ownership. 18. Where an asset in respect of which qualifying expenditure has been incurred by the owner thereof has been disposed of in such circumstances that such owner remains the owner thereof, then, for the purposes of determining whether and, if so in what amount, any annual or balancing allowance or balancing charge shall be made to or on such owner in respect of his use of that asset after the date of such disposal– (a) qualifying expenditure incurred by such owner in respect of such asset prior to the date of such disposal shall be left out of account; but Income and Business Tax 121 (b) such owner shall be deemed to have bought such asset immediately after such disposal for a price equal to the residue of such qualifying expenditure at the date of such disposal, increased by the amount of any balancing charge or decreased by the amount of any balancing allowance made as a result of such disposal. Application to professions, vocations and employments. 19. In relation to qualifying plant expenditure, this Schedule shall apply as if references to a trade or business included references to a profession or vocation the profits of which are assessable under this Act. Partnerships. 20.–(1) This paragraph shall have effect for the purposes of this Schedule, in relation to a trade or business and the person or persons hereinafter mentioned carrying on such trade or business, throughout the period (hereinafter called “the relevant period”) being– (a) any period during which the trade or business is carried on by persons in partnership and at least one of such persons, engaged in carrying on the trade or business as a partner in a partnership at any time, is so engaged immediately after that time, whether as a partner in the same partnership or as a partner in a different partnership carrying on the trade or business; or (b) the aggregate of any of the following periods which are successive– (i) any period, ending immediately prior to a person becoming a partner in a partnership carrying on the trade or business, during which such person was carrying on the trade or business on his own account; 122 Income and Business Tax (ii) any period ascertained under sub- paragraph (a); (iii) any period during which a person is carrying on the trade or business on his own account, where such person was a partner in a partnership carrying on the trade or business immediately before such period. (2) Such trade or business shall throughout the relevant period be deemed to be carried on by one and the same person (hereinafter called “the deemed person”) and any allowance or charge which would then fall to be made to or on the deemed person, under this Schedule, if the deemed person were an actual person, shall be computed as though the deemed person had done all things which were done for the purposes of such trade or business by the person or persons actually carrying on such trade or business during the relevant period. (3) The amount of any such computed allowance or charge in respect of any asset shall be allocated to the person, or apportioned amongst the persons, actually carrying on the trade or business, in the same manner as any capital loss, in the case of an allowance, or any capital gain, in the case of a charge, in respect of such asset, would fall on or accrue to such person or persons, if such loss or gain arose in the course of carrying on the trade or business and as a result of an event occurring– (a) in the case of an annual allowance, at the end of the basis period by reference to which such allowance has been computed; and (b) in the case of a balancing allowance or charge, at the date of the disposal of the asset. (4) Any amount so allocated to or apportioned to any person in respect of any such computed allowance or charge shall be treated as an allowance or charge for the purposes of this Income and Business Tax 123 Schedule relating to deduction from and additions to the chargeable income and shall be made to or on him for the year of assessment for which the amount of such allowance or charge has been so computed. (5) For the purposes of this paragraph, an asset is not disposed of within the meaning of allowance 10 so long as the asset is used for the purposes of the trade or business during the relevant period and at least one of the persons actually engaged in carrying on the trade or business has an interest in the asset, or in the relevant interest therein, during the relevant period. (6) In the application of this paragraph with any of the other paragraphs those provisions shall be applied with any modifications which the Commissioner may consider necessary in order to give effect to the principles and provisions of this paragraph, and, if he sees fit, the Commissioner may from time to time prescribe rules embodying any such modifications as he may consider necessary. 21. Any reference in this Schedule to an allowance made includes a reference to an allowance which would be made but for an insufficiency of chargeable income against which to make it. Allowances made. 22.–(1) No allowance shall be made to any person for any year of assessment under this Schedule unless claimed in the statement required to be delivered by him under section 31 of this Act, for that year or, where the Commissioner is of the opinion that it would be reasonable and just to do so, in such form and within such time as the Commissioner may allow. Claims for allowances. (2) In the case of a partnership there shall be included in the form of return required to be delivered by any partner under section 35 of this Act, such particulars and information as may be necessary for the purpose of any claim by any partners for any allowance which falls to be computed by reference to the provisions of allowance 22. 124 Income and Business Tax 23.–(1) Where a person makes a claim to an annual allowance under this Schedule in connection with any trade or business, if the taxes in respect of the profits of that trade or business are the subject of an arrangement, having effect by virtue of section 50 of this Act, between the Government of Belize and the Government of any other territory, for relief from double taxation, he may elect, at the time of making such claim or within such reasonable time thereafter as the Commissioner may allow, that that allowance shall be calculated at a lesser rate than that provided for in paragraph 5 and in making such election he shall specify the amount of such lesser rate. Election in double taxation cases. (2) Where an election has been made under this paragraph the amount of such lesser rate shall be taken to be the appropriate rate in relation to that allowance for all the purposes of this Schedule. Manner of making allowances and charges. 24.–(1) The amount of any charge to be made on a person under this Schedule shall be made on him by making an addition to his chargeable income for the year of assessment for which such charge falls to be made under this Schedule, Provided that where any such charge falls to be made on any person for any year of assessment, whenever necessary by reason of the assessment on that person having become final and conclusive for that year or for other sufficient reason, the Commissioner may make an additional assessment upon such person in respect of the amount of such charge. (2) The amount of any allowance to be made to a person under this Schedule shall be made to him by making a deduction in arriving at the amount of his chargeable income for the year of assessment for which such allowance falls to be made under the provisions of this Schedule. Where such deduction creates or adds to a loss in the basis year, the loss or increased loss shall be the loss falling within section 15 of this Act. --------------------------------------------- Income and Business Tax 125 SCHEDULE VI Petroleum Operations Expenditures [sections 98 (10) and 102 (5)] ARRANGEMENT OF EXPENDITURES 1. General petroleum operations expenditure costs. 2. Capital petroleum operations expenditure costs 3. Depreciation amortization. 4. General exclusions General petroleum operations expenditure. 1.–(1) Petroleum Operations Expenditures shall be calculated and accounted for in a manner consistent with the following principles and definitions and shall include all reasonable and necessary expenses for the conduct of Petroleum Operations, including but not limited to, (2) Cost of hiring sub-contractors and of salaries and wages of the contractor’s employees directly engaged in petroleum operations, including costs of holidays, vacations, sickness, living and housing allowances, travel time, bonuses and other established plans for employee benefits customarily granted to the Contractor’s employees and their families in similar ventures. (3) Costs of material, equipment, machines, tools and any other goods of a similar nature used or consumed in petroleum operations subject to the following– (a) acquisition - the Contractor shall only supply or purchase materials for use in Petroleum Operations that may be used in the foreseeable future. The accumulation of surplus stocks and inventory shall be avoided. Inventory levels shall, however, take into account the time lag 126 Income and Business Tax for replacement, emergency needs and similar considerations; (b) components of costs - costs of materials purchased by the Contractor for use in Petroleum Operations may include, in addition to the invoice price (subtracting the discounts given, if any), freight costs and costs of transportation between the supply point and delivery point (provided that such costs are not included in the invoice price, inspection costs, insurance, custom duties, taxes and other items that may be charged to imported materials or to materials purchased in Belize); (c) accounting - such materials costs shall be charged to the accounting records and books based on the “First-in First-out” (FIFO) method; (d) supply of materials by Affiliated Companies - materials supplied by the Contractor’s Affiliated Companies shall be charged to the accounting records and books at prices no higher than the prices for comparable material purchased on a competitive basis from third party suppliers. This criterion shall apply to both new and used materials; (e) inventories - the Contractor shall maintain both a physical and accounting inventory of all materials in stock in accordance with generally accepted practices in the international petroleum industry. The Contractor shall make a physical inventory of all such materials at least twice yearly. The costs of non-capital items purchased for inventory shall be charged to operating Income and Business Tax 127 expenditure when issued from stock for consumption. (4) The value of technical services costs relating to petroleum operations shall be– (a) in the case of technical services performed by third parties directly sub-contracted, including outside consultants, contractors and utilities, the price paid by the Contractor, provided that such prices are no higher than the prices charged by other suppliers for comparable work and services; and (b) in the case of technical services performed by the Contractor or its Affiliated Companies, prices which are no higher than the most favourable prices charged to third parties for comparable services. (5) The value of insurance relating to Petroleum Operations shall be– (a) in the case of insurance purchased from third parties, the price paid by the Contractor, provided that such price is no higher than the price charged by other insurers for comparable insurance; (b) in the case of insurance purchased from an Affiliated Company, the price shall be no higher than the most favourable price charged to third parties for comparable insurance. The proceeds of any insurance or claim shall be credited against Petroleum Operations Expenditures. Except in cases where insurance coverage is required pursuant to its contract with the Government, if no insurance is carried for a particular risk, all costs incurred by the Contractor in settlement of any related 128 Income and Business Tax loss, claim, damage or judgment, including legal services, shall be includable in Petroleum Operations Expenditures provided that such costs did not result from the Contractor’s gross negligence. (6) Costs and expenses of litigation and legal or related services necessary or expedient for the protection of the area covered by a Contractor’s contract with the Government. Any damages or compensation received shall be credited against Petroleum Operations Expenditures. The Contractor’s costs incurred in arbitrating a dispute with the Government relating to its contract shall not be included in Petroleum Operations Expenditures. (7) So much of the expenditure in the nature of general services and administration costs, other than direct costs, as is not in excess of three per cent and (3%) of total petroleum operating expenditure, including, but not limited to– (a) the Contractor’s personnel and services costs outside of Belize relating to administration, legal, accounting, treasury, auditing, taxation, planning, employee relations, purchasing and other functions related to petroleum operations under its Agreement; and (b) reasonable and necessary travel expenses of the Contractor’s personnel in the general and administrative categories listed in (a) above for the purpose of inspections and supervision of petroleum operations in Belize shall be allocable to petroleum operations Expenditures according to methods agreed to by the Contractor and the Government. (8) Interest, fees, duties, taxes and other financial charges relating to loans and credits obtained by the Contractor to acquire funds for the execution of its obligations under this Agreement at rates not exceeding the prevailing commercial Income and Business Tax 129 rates or in the aggregate not exceeding twenty-five per cent (25%) may be charged to Petroleum Operations Expenditures. (9) Staffing and maintenance of the Contractor’s head office in Belize and other offices in Belize, including rent, telephone, telex and radio expenses, as well as the expenses of general facilities such as shore bases, warehouses, water, power and communication systems, roads and bridges. (10) All payments to the Government or any local authority, including but not limited to surface rentals, fees, taxes, imposts, dues and levies, but excluding tax and royalty. Capital petroleum operations expenditure costs. 2.–(1) Petroleum Operations Expenditures consist of capital and operating expenditures. (2) Capital Expenditures are those Petroleum Operations Expenditures for assets that normally have a useful life which extends beyond the year in which the asset was acquired. In addition to expenditures relating to assets that normally have a useful life beyond the year in which the asset was acquired, the costs of development operations, as described in paragraph (e) below, and signature and production bonuses as listed in (f) below, will be classified as capital expenditures. Capital expenditures include, but are not limited to, the following– (a) construction utilities and auxiliaries - workshops, power and water facilities, warehouses, and field roads, cost of crude oil treating plants and equipment, secondary recovery systems, natural gas plants and steam systems; (b) construction housing and welfare housing - recreational facilities and other tangible property incidental to construction; 130 Income and Business Tax (c) production facilities - production rigs (including the costs of labour, fuel, hauling and supplies for both the offsite fabrication and onsite installation of rigs, and other construction costs in erecting rigs and installing pipelines), well-head equipment, sub-surface lifting equipment, production tubing, sucker rods, surface pumps, flow lines, gathering equipment, delivery lines and storage facilities; (d) movables - surface and sub-surface drilling and production tools, equipment and instruments, barges, floating craft, automotive equipment, aircraft, construction equipment, furniture and office equipment and miscellaneous equipment; (e) development and production drilling - labor, materials and services used in drilling wells with the object of penetrating a proven reservoir, including the drilling of delineation wells as well as re-drilling, deepening or re- completing wells, and access roads, if any, leading directly to wells; (f) signature and production bonuses. (3) Operating Expenditures are all Petroleum Operations Expenditures other than capital expenditures, including but not limited to– (a) exploration drilling - labor, materials and services used in the drilling wells with the object of finding unproven reservoirs of crude oil and natural gas, and access roads, if any, leading directly to wells; Income and Business Tax 131 (b) surveys - labor, materials and services used in aerial, geological, topographical, geophysical and seismic surveys, and Core hold drilling; and (c) other exploration expenditures - auxiliary or temporary facilities having lives of one year or less used in exploration and purchased geological and geophysical information. Depreciation amortization. 3.–(1) Capital expenditures, as defined in paragraph 1, shall be depreciated or amortized for the purpose of the calculation of tax. For the purpose of determining the amount of depreciation or amortization which is allowable as a deduction in each calendar year, the following principles shall apply. (2) Capital expenditures will be depreciated or amortized using the straight line method over five (5) years. (3) A full year’s depreciation or amortization may be taken in the first Calendar Year in which such depreciation or amortization is allowable. (4) Deductions with respect to depreciation or amortization of capital expenditures incurred shall be allowable commencing with (A) the Basis Year in which the capital asset is placed into service, or, if the capital expenditure does not relate to an asset that normally has a useful life beyond the year in which it is placed in service, the Calendar Year in which the capital expenditure is incurred, or (B) the Calendar Year in which Initial Commercial Production first occurs, whichever is later. 4. The following expenditures shall not be included in Petroleum Operations ExpendituresGeneral exclusions. (a) costs and expenses incurred at any time prior to the effective date of the Contractor’s contract with the Government, unless expressly permitted in such contract; 132 Income and Business Tax (b) costs relating to Petroleum marketing or transportation beyond the Delivery Point; (c) contributions and donations, except those approved by the Government; (d) gifts or rebates to suppliers, and gifts or commissions to intermediaries arranging service or supply contracts; (e) any fines, monetary corrections or increases in expenses resulting from the Contractor’s failure to comply with the obligations under its contract with the Government, or applicable law; and (f) any other expenditures not directly related to Petroleum Operations or not in compliance with the provisions of this Schedule. Income and Business Tax 133 SCHEDULE VII5 Repealed 5 This Schedule was repealed by Act No. 25 of 2019. 134 Income and Business Tax SCHEDULE VIII Taxed Businesses and Professions [Sections 105(1)(3)] 1. Accountants 2. Architects 3. Attorneys-at-Law 4. Auctioneers 5. Building Contractors 6. Consultants 7. Customs Brokers 8. Dentists 9. Engineers 10. Insurance Brokers and Underwriters 11. Mechanics 12. Medical Practitioners 13. Moneylenders 14. Ophthalmologists 15. Opticians 16. Optometrists 17. Shipping Agents 18. Surveyors 19. Tour Operators 20. Travel Agents 21. Veterinarians Income and Business Tax 135 SCHEDULE IX6 Rates of Tax [sections 111 (3) and 113 (2)] (a) Receipts from radio, on-air television and newspaper business...............................0.75% (b) Receipts from domestic airline business.................................................1.75% (c) (i) Receipts of service stations from the sale 14 of 2005. of fuel………...............…...0.75% (ii) Receipts from service stations from the sale of all other items ....…..…...1.75% (d) Receipts from other trade or business...1.75% 7 of 1999. (e) Rents, royalties, premiums and any other receipts from real property (excluding the receipts from Real Estate Business)..........3% 3 of 2004. (f) Receipts from a profession, vocation occupation..................................................6% 7 of 1999. (g) Receipts of an insurance company licensed under the Insurance Act........................1.75% CAP. 251. (h) Commissions, royalties, discounts, dividends, winnings from lotteries, slot machines and table games...............................................15% 3 of 2004. 7 of 1999. 7 of 1999. Provided that in the case of commissions of less than $25,000.00 per annum, the rate shall be ………….………..5% 6This Schedule was amended by Acts No. 5 of 2012 and 25 of 2019. 136 Income and Business Tax (i) Interest on loans paid to non-residents ..………………….................……….…..15% 7 of 1999. (j) Receipts of a financial institution licensed under the Banks and Financial Institutions Act...........................................15% CAP. 263. Provided that in the case of a financial institution which falls within a “PIC Group” as defined in the International Business Companies Act, the rate shall be…………….......12% S.I. 142 of 2002. Provided further that in the case of a unit trust governed by the Banks and Financial Institutions (Unit Trust) Regulations, the rate shall be…………………….………………………....6% (k) Management fees, rental of plant and equipment and charges for technical services, (i) if paid to a non-resident..................25% (ii) if paid to a resident…. .... the rate applicable to the particular trade, business, profession, vocation or occupation of the payee. 30of 2010. (l) Receipts of entities licenced to provide telecommunication services that offer real time voice services................................19.5% (m) Gross earnings of casinos or licenced gaming premises or premises where the number of gaming machines is more than 50………8% 6 of 2009. Income and Business Tax 137 (n) Gross earnings from real estate business as follows, (i) Real estate brokers and agents, earning commission…....……………...…..15% (ii) Real estate sales, developers, condominium owners and fractional interests ………….................….1.75% (iii) Long Term Leases...…….…..…1.75% (iv) Time Share Operators.................1.75% (v) Share Transfer Sales...................1.75% 5 of 2012. (o) Receipts of entities providing electricity supply services.....................................1.75% (p) Receipts of building contractors................. 6% 5 of 2012. on the first 40% of the total contract price and 1.75% on the remaining 60% of the contract price; (q) Receipts of persons licensed by the International Financial Services Commission of Belize to provide international financial services ....... 3%: 5 of 2012. Provided that if there is a commingling of receipts from international financial services with those from domestic services, the entire receipts shall be taxed at 6%; (r) In the case of a company, receipts described in section 108A(2) (a), (b), or (e)….………..5%; 25 of 2019. (s) Annual net gain…………………………..5%. 25 of 2019. 138 Income and Business Tax ---------------------------------------------- Income and Business Tax 139 SCHEDULE X7 Rates of Petroleum Surcharge Crude Oil Prices [Section 124] PRICE OF CRUDE OIL SURCHARGE FROM TO PERCENTAGE [US$/BBL] [US$/BBL] (%) 0.00 100.00 0 100.01 105.00 15 105.01 110.00 17 110.01 115.00 19 115.01 120.00 21 120.01 125.00 23 125.01 130.00 25 130.01 135.00 27 135.01 140.00 29 140.01 145.00 31 145.01 150.00 33 150.01 155.00 35 155.01 160.00 37 160.01 165.00 39 165.01 170.00 41 170.01 175.00 43 175.01 180.00 45 180.01 185.00 47 185.01 190.00 49 190.01 and higher 50 7This Schedule was inserted by Act No. 12 of 2008.