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INCOME TAX LAW
INCOME TLAM d4 TAX EXMPTION 1956
HARVARD A LAW
REPUBLIC OF HAITI
INC 0 ME T.AX
(INCOME TAX, NEW ENTERPRISES, HOTELS)
BUREAU OF INTERNAL REVENUE
GEORGES EUG. ROY
CHARLES FERNAND PRESSOIR
ASSISTANT DIRECTOR GENERAL
IMPRIMERIE DE L.'ETAT PORT.AU.PRINCE. HAITI
REPUBLIC OF HAITI
IN C 0 ME TAX"
(INCOME TAX, NEW ENTERPRISES, HOTELS)
BUREAU OF INTERNAL REVENUE
GEORGES EUG. ROY
CHARLES FERNAND PRESSOIR
ASSISTANT DIRECTOR GENERAL
IMPRIMERIE DE L'ETAT PORT.AU.PRINCE, HAITI
OTHER PUBLICATIONS IN THIS SERIES (in French)
1) HAITIAN TAX CODE............................ ................ March 1953
2) FISCAL AND ECONOMIC SUPPLEMENT 1953................. March 1954
3) FISCAL AND ECONOMIC SUPPLEMENT 1954 ................. March 1955
4) FISCAL AND ECONOMIC SUPPLEMENT 1955.............., March 1956
On sale at the Bureau of Internal Revenue.
REPUBLIQUE D'HAITI ADMINISTRATION GENERALE DES CONTRIBUTIONS Port-au-Prince, September 28, 1956
In re :Income Tax and Tax exemption Laws.
Mr. GEORGES EUG. ROY, Director General,
Bureau of Internal Revenue, Port-au-Prince.
You recently informed me that the Departments of Foreign Affairs and Finance would like to have English translations of the Haitian Income Tax Law and the other legal provisions intended to promote investments in this country.
In my opinion, the basic texts on the matter are the following
1) Law of Sept. 12, 1951 on Income Tax
2) Law of Aug. 8, 1955 on New Enterprises
3) Some provisions of the law of Oct. 8, 1949 on
New Industries, that are still in force
4) Law of June 22, 1948 on Hotels.
I take pleasure to submit to you herewith the translations I prepared of the above-mentioned texts, and suggest that they be examined by our Income TaxService before publication.
Very truly yours, CHARLES FERNAND PRESSOI~R Attorney at law
Assistant Director General.
References are to pages
1) INCOME TAX Pages
Balance sheet basis ............................................... ............................. 10
C ost book .......................................................................................... 18
Deductions (business) ......................................................................... 12
Deductions (personal) .......................................................................... 22
Definitions ........................................................... 7
General Provisions ............................................................................ 25
Individual Income Tax ...................................................................... 20
R ates ......................................................................... ; ....................... 24
Reinvestment and Reserve against losses ........................................... 15
R en t b asis .......................................................................................... 8
Special taxation methods .................................................................... 26
S tock book ........................................................................................ 18
Taxable elements ............................................................................... 8
II) NEW ENTERPRISES
Consultative Commission ..................................................................... 34
D efin ition ......................................................................................... 31
Fiscal advantages ................................................................................ 32
Inspection ......................................................................................... 36
Protection of national industry ............................................................ 38
Requests for fiscal exemption ............................................................ 34
S an ction s ........................................................................................... 36
III) NEWLY ESTABLISHED INDUSTRIES
(provisions of the old law still in force)
Reductions of taxes ........................................................................... 40
Note.- The law contains no headings and the following are added
for the reader's convenience.
Customs duties ............................................................................... 41,42
(sections 1, 2, 5, 6)
D efin ition s ........................................................................................ 41
Duration (five years) ........................................................................ 41
Incom e tax ........................................................................................ 42
Requirements ................................................................................. 41,42
(sections I and 2)
INCOME TAX LAW
LAW OF SEPTEMBER 12,1951
(Official Gazette, Monday. Sept. 24, 1951, No. 82) PAUL E. MAGLOIRE
President of the Republic
in view of Sections 57, 79 and 130 of the Constitution; In view of the Law of June 6, 1924, on the Bureau of Internal Revenue;
In view of the Decree-Law of May 2, 1942, modified by that of August 13, of the same year, along with the law of September 6, 1948, and the Presidential Decree of October Ist of the same year on Income Tax;
Whereas there is cause to complete and arrange said texts into a single Law;
Whereas there is cause to encourage investments of capital in agricultural or industrial enterprises and to facilitate the reinvestment of part of the profits in- said enterprises;
And whereas it is indispensable, in the interest of the Treasury as well as of the collectivity, to prevent tax evasions;
On the report of the Secretary of State for Finance;
And after deliberation in Council of the Secretaries of State;
And the Legislative Body has passed the following Law:
CHAPTER I DEFINITION
Section I.-The word << income >> includes any gain, profit or earnings derived from work; any income from personal property or real estate; any profit derived from commerce, trade or industry, salaries (including bonuses and gifts), profits derived from agriculture, rentals or annuities, interest on capital and all other periodic gains.
CHAPTER II TAXABLE ELEMENTS
Section 2.-Individuals, associations, companies, partnerships or sole proprietorships, whatever, receiving income in any of the above ways are of right liable to pay Income Tax. Income may be composed of the following two parts taxed separately or of one of them:
1) Industrial and commercial profits;
2) Amounts constituting individual income.
The tax is paid on the above-mentioned incomes realized in Haiti, whatever the place of the establishment, even when the recipient does not reside in the Country.
For the purpose of computing the tax, the profits of the various branches shall be added to those of the taxpayer's main establishment.
CHAPTER III TAX ON THE RENT BASIS
(Note.-French text : forfaitaire)
Section 3.-Subject to the provisions of Section 4 hereafter, professionnal people, merchants and manufacturers, associations, companies, partnerships or sole proprietorships whatsoever, other than corporations, are all liable without exception to the payment of the tax on the rent basis. Where, however, from a taxpayer's return or from the auditing of his books, registers, stubs, policies aynd accounting documents, it appears that he realized net profits or income subjecting him to a tax higher than the one already paid he shall have to pay the additional tax determined according to the net profit or income realized.
Section 4.-Are exempt from the payment of the tax on the rent basis, the individuals, manufacturers or merchants who sell exclusively in quantities smaller than one piece, one dozen, five litres, one thousand, one case or any other packing unit and have established that the merchandise inventories, not including the installations of their establishments, do not exceed five thousand Gourdes (U.S. $1.000).
* However, are liable to the payment of the tax on the rent basis, but with a 50% reduction of the tax, all merchants having a small grocer City License, regardless of their stocks. The small grocer does
IMPORTANT NOTE : One Dollar US Cy is worth Five gourdes.
not have to pay the income tax on the Balance Sheet basis, and is free not to keep stamped books (Note : > is in the French text : marchand en comestibles).
However, under the last provisions of the first paragraph Of Section 11, the small grocer shall pay any additional income tax resulting from the inspection of the summary books he is obliged to keep under Section 30, and such bookeeping shall do instead of a Balance Sheet. In such a case, the State's fiscal year shall be considered as the taxpayer's financial year.
Section 5.-Income on the rent basis shall be computed by multiplying by five the yearly rental value, determined in conformity with the rolls of the city tax on rents, (French imp6t locatif) of the buildings and lands, which the above-mentioned taxpayers occupy for their business or industry, without including the personal lodgings of said individuals or business firms. In the case of self-employed professionnal people (lawyers, notaries public, accountants, architects, physicians, dentists, tailors, shoemakers, mechanics and others, commission merchants, manufacturers' agents and representatives), the yearly rental value shall be determined from the rental of their practices, offices, clinics, hospitals, workshops and others. However, if the professionnal person uses the same premises as one or several colleagues, or does not use special premises for his work, the yearly rental value shall be established officially by the Bureau of Internal Revenue, at an amount not less than Gourdes 300.00 (U. S. $ 60) and not exceeding Gourdes 1.800.00 (U. S. S 360) in pursuance of the provisions of Section 25.
Where the property used is located beyond the limits provided for the collection of the city tax on rents, its rental value shall be determined by mutual consent of the Bureau of Internal Revenue and the taxpayer. In case of disagreement, there shall be an arbitration as in the case of the city tax on rents, in accordance with the legal provisions on the matter, with this sole difference that the Bureau of Internal Revenue shall be a party to the same in lieu of the City Administration.
Section 6.-The income tax on the Rent Basis is due in full on October 1st, of each fiscal year and payable by half not later than on October 30th and the following April 30th. Payment by half is the effect of a simple time limit, which does not suspend the engagement to pay the tax, but only postpones its complete execution.
JI-owever, the taxpayer who retires from business during the first semester and has given in due course previous notice to the Bureau of Internal Revenue, shall not have to pay the tax for the second semester.
.However, the taxpayer who moves into a building or occupies additional property during the fiscal year shall pay the income tax on the rent basis, in the following way. If the event occurs during the second quarter, the tax for the first semester of the fiscal year shall be reduced by half; if it occurs during the third quarter, the tax shall be paid for 6 months; if it occurs during the last quarter the tax shall be paid for 3 months. In any case, the declaration concerning the property shall be filed with the Bureau of Internal Revenue, not later than 30 calendar days from that of the occupation of the property. The tax is payable not later than 30 calendar days from the declaration or from the moment it should have been made.
Section 7.-Any taxpayer who, being liable or susceptible to be
-liable to pay the income tax on the rent basis, has not declared to the Bureau of Internal Revenue one or more places he occupies for his profession, business or industry, is liable to a fine of not less than Gdes. 50.00 (U. S. $ 10), and not exceeding Gdes. 1.000.00 (U. S. $ 200).
Section 8.- The amounts paid on the rent basis *shall not be refunded by the Treasury, whether or not the amount of the income tax computed on the basis of the balance sheet or any other return reveals a supplement.
CHAPTER IV TAX ON THE BALANCE SHEET BASIS
Section 9.-The net profit of all taxpayers liable to pay this tax shall be the one realized during their fiscal year, as this net profit shall result from the annual balance sheet they must prepare pursuant to section 10 of the commercial code, and from their profit and loss statement prepared according to their operations during the taxable year, duly entered in the journal and the other indispensable books they must keep under Sections 9, 10 and 11 of the Commercial code and in conformity with the justifying documents of their book-keeping.
Section 1.-Are liable to pay the income tax provided in Section 2 above :corporations, companies, partnerships or sole proprietorships, whatsoever, carrying on in the country a business or industry, provided or not in the city license tariff. (French :patente).
Section 11.-Companies, partnerships or sole propri~torships, whatsoever, as well as corporations, shall make a return of their net profit and file with the office of the Bureau of Internal Revenue, nearest their head office or main establishment their balance sheet and profit and loss statement provided in Section 9 above, all of them duly certified, within ninety days following the date of the close of their fiscal year. However, in case of material impossibility to submit the required documents within the allowed time limit, and upon written request produced before the expiration of the ordinary time limit, the Director General of Internal Revenue may grant an additional time limit, not exceeding ninety days, to the taxpayers whose head office or main establishment is abroad. All those who have previously had to submit their balance sheet to the Bureau of Internal Revenue shall within the statutory time limit and without having to be notified again, file each year with said Administration a new balance sheet accompanied by their profit and loss statement and the other required documents. Where, from the report of one of its inspectors, the Bureau of Internal Revenue judges that the profits of a taxpayer, not yet obliged to submit his balance sheet, should justify a higher tax than that deriving from the rent basis, a notice by registered mail hall be sent to said taxpayer, who shall consequently submit his balance sheet and profit and loss statement pursuant to the provisions of the present Law. In case the tax office sends such a letter requesting a balance sheet, that letter does not apply to the current fiscal year of the taxpayer but to the following ones.
Merchants or manufacturers who import, or export, as well as wholesale and wholesale and retail dealers, are liable to pay income tax on the balance sheet basis, even though they are exempt f rom doing so on the rent basis. They are, consequently, obliged to submit each year their balance sheet and profit and loss statement to the Bureau of Internal Revenue, whatever the result of their fiscal year, within 90 days following the close thereof.
The following shall pay income tax on the balance sheet basis: distributors and manufacturers' agents and insurance agents. They shall keep books as prescribed by the commercial code. They are
also required to submit each year their balance sheet and profit and loss statement to the Bureau of Internal Revenue, whatever the result of their fiscal year, within 90 days following the close thereof.
In any case, the following are required to file a return for the tax on industrial and business profits: 1) every natural person, not taxable on the rent basis, but whose said profits, before deducting his salary, exceed his personal exemptions; 2) every body corporate, whether or not taxable on the rent basis, carrying on a commercial or manufacturing business, whatever the results of its operations for the period may be.
Section 12.-Net profit, liable to income tax means the income realized within the taxpayer's fiscal year, less the usual expenses and charges for the administration and operation of the enterprise during the taxable period, including the maximum allowance of Gdes. 18.000 (U. S. $ 3.600) for the salaries referred to in paragraph
(h) hereunder of the present section, and before deducting reserves for amortization, reimbursement or redemption of bonds or other securities to be paid out of the capital authorized, subscribed or invested in the enterprise, and before settlement of any dividends, bonuses or interest on shares.
The joint drawings classified as salaries of all Shareholders, Presidents, Vice-Presidents, Administrators, Proxies, Managers, Secretaries and Treasurers of the Board of Directors, as well as of all individuals having any part in the management of a Corporation, are deductible only up to the amount of Gdes. 18.000 (U. S. $ 3.600) pursuant to the provisions of paragraph (h) hereafter.
Expenses which constitute usual costs and charges and are deductible from gross income in order to determine taxable net income are the justified ordinary and necessary professionnal expenditures directly connected with or pertaining to the taxpayer's business or industry. The following are not deductible: expenses or charges which do not meet these requirements and also certain expenses excluded from business charges under an express provision of the present law.
The following are especially considered as deductible expenses and charges:
a) rental of the equipment and premises used for the taxpayer's trade or industry when they don't belong to the taxpayer;
- 12 -
b) maintenance expense of the business premises, lighting, power or other expenses.
c) Justified commissions and brokerage expenses, and also bonuses, gifts to employees, vacations paid to employees, medical expenses whatsoever voluntarily paid to employees by the employer when there exists a medical certificate issued after verification by two Labor Department inspectors and a favorable opinion of said Department;
d) justified transportation, forwarding, wrapping, correspondence, office, banking, collection and publicity expenses, interest paid to* Banks established in Haiti and abroad or to other lenders paying a city license in Haiti as such (city license: patente in French).
e) travelling expenses, travel tickets and hotel expenses during the year for the business, not exceeding one month for America and three months for the other parts of the world, to the extent that they represent operation expenses rather than personal expenses, as the Bureau of Internal Revenue may determine their validity.
However, when it is well known that the importance of the concern is undoubtedly above average, the Finance Department may, upon advice of the Bureau of Internal Revenue, grant an increase of the time limits provided for travels, but said increase shall not exceed the above figures for each case. In any case, the taxpayer shall,, in order that his request for extension of time be acceptable, produce it within thirty days from his return to Haiti.
f) taxes and imposts connected with the business, other than income tax;
g) insurance costs in connection with material property of the enterprise and gifts to charitable organizations recognized by the State.
h) salary or drawings of the taxpayer, as compensation for persolial services, and also the personal salary of all the associates together in a corporation or a partnership, and of the owners of sole proprietorships; said salaries or drawings shall be deductible only up to an amount ranging from G. 9.000 (US. $ 1.800) to G. 18.000 (U. S. $ 3.600) for the financial year and according to the volume of annual sales. Consequently:
1) up to Gdes. 250.000 (U. S. $ 50.000) of annual sales, the
drawings shall be of Gdes. 750 (U. S. $ 150) monthly;'
2) up to Gdes. 500.000 (U. S. $ 100.000) of annual sales, the
drawings shall be of Gdes. 1.000 (U, S. $ 200) monthly;
3) over Gdes. 500.000 (U. S. $ 100.000) of annual sales the
drawings shall be of Gdes. 1.500 (U. S. $ 300) monthly;
i) depreciations generally allowed according to the customs of each kind of industry or trade, by reason of exhaustion, wear and tear.
A deduction for amortization or depreciation, even though the principle thereof should be incontestable, is allowed only to the extent that the amortization or depreciation has as a result to bring back, at least approximately, to its real expression, the value which was formerly attributed to the asset items in question.
For the purpose of the collection of income tax, the word means decline or wear of real estate, equipment-sand movable property in the course of the taxable year. Where there is established a depreciation reserve, it may not exceed the following maximum percentages which are considered as representing the real depreciation to the exclusion of any expenditures made for repairs and maintenance.
Merchandise, raw materials in stock............... nothing
Buildings, structures, wooden frames or wooden and masonry frames ....................... 5% a. *year
Buildings, structures, masonry and iron frames 4%/ a year
Motors, machinery, fixed apparatus and equipment, furniture and fixtures, parts and accessories ............................................10% a year
Vehicles, tools and implements................ 25% a year
Expenses for fungible things, that is to say things which can rapidly be destroyed through use, are deductible expenses and charges.
Shall be considered as taxable income, any amount drawn from the depreciation reserve for purposes other than the replacement of fixed assets and also any residuary value of items which have been completely depreciated according to the percentages allowed by the present Law. Merchandise and raw materials are to be priced at the time of the inventory taken for the balance sheet, at cost or market, whichever is lower.
Expenditures for replacement or extension of fixed assets are not operating expenses and charges. Such expenditures shall be entered in the <(apital account or the account.
On the other hand, the following are excluded from 'operating charges and are not deductible, particularly:
1) taxes paid or advanced for employees or partners, for example
their personal state license or city license; (French: licence
2) rental expenditures of employees or partners,
3) fines and penalties incurred,
4) taxes paid abroad,
5) salaries and expenses for an office or establishment abroad,
6) travelling expenses of partners and employees, 'in case of
7) travelling expenses of the families of the partners and employees, whether in case of vacation or not.
REINVESTMENT AND RESERVE AGAINST LOSSES
Any reinvestment of 25% of the profits in an agricultural or industrial enterprise is a deductible charge for the fiscal year which follows that during which it was made, when the purpose of the operation is to increase the output of the enterprise; said 25%7 shall not exceed Gdes. 100.000 (U. S. $ 20.000).
This deduction shall not be allowed unless the reinvestment was preceded by a notice given to the Bureau of Internal Revenue and if the works and acquisitions constituting this reinvestment were carried out under the direct control of said Bureau assisted by the competent Service of the State. Moreover, before the operation is undertaken, it must have been approved in any case by the Department of Finance, and, should the occasion arise, by those of Agriculture and Public Works, as per detailed specifications.
Merchants, manufacturers, business firms are authorized to constitute a reserve against losses by an annual 10% drawing on their net profits, which drawing shall be exempt from income tax. However if, during a thirty-six month period, from the close of the balance sheet, the drawing has not been used, either for losses in all cases referred to in the beginning of the present paragraph, or for an additional reinvestment in the case of an agricultural or
industrial enterprise, then said drawing or its available balance shall be added to the fourth year profit; except for the amount, such a reserve for reinvestment is subject to the same requirements provided in the preceding paragraph. The 10% reserve and that for doubtful accounts are not cumulative.
Section 13.-No reserve for doubtful accounts shall be allowed in excess of the effectively uncollectible accounts or parts of accounts, and, as a justification there shall be submitted a statement containing the name, first name and address of each debtor, with, on the opposite column, the amount which is owed and that which is reserved.
Section 14.-Every income tax bill on the balance sheet basis shall be paid not later than when falling due, and the taxpayer is liable to the 10% penalty for each month or fraction of month of default provided by the law of June 6, 1924, on the Bureau of Internal Revenue, as amended by the Decree-Law of January 11, 1936. There shall be at least a time limit of thirty ordinary days between the date of issuance and that of falling due.
Section 15.-Under penalty of a fiscal fine of not less than Gourdes 50.00 (U. S. $ 10) and not exceeding Gdes. 2.000 (U. S. $ 400), collectivities and individuals liable to make a return of profits or income, are subject to the audits of the Bureau of Internal-Revenue, and obliged to communicate to any Internal Revenu Inspector upon his request, at their head office or main establishment as well as in their branches and agencies, their books, registers, stubs, policies and accounting documents whatsoever, as well as the minutes of proceedings and reports of meetings of stockholders or Boards of Directors, in order to allow said Office to audit their returns and make sure of the compliance with the income tax laws by themselves and other taxpayers, and these audits shall not go back to more than two fiscal years already taxed.
Section 16.-The following shall be liable to the same fine provided in the preceding section: every taxpayer who has not filed within the time required by the present law the return of the profit or income he is bound to file or has lessened the efficiency of the audit by refusing to submit to the Internal Revenue Inspectors all or part of the books, registers, stubs, policies and accounting documents whatsoever, whose communication is requested for au-16-
diting the return of another taxpayer, or who shall not have kept books in accordance with sections 9, 10 and 11 of the Commercial code or who in the return of profits or income he is liable to file has failed to mention an unimportant part of the gross receipts realized during the fiscal year.
Section 17.-In case of ascertained tax evasion, the income tax shall be collected on an amount ranging from 8% to 15% of the taxpayer's volume of business, that is to say his gross receipts for the taxable period, such as the Bureau of Internal Revenue may establish it.
There is tax evasion:
1) when the taxpayer liable to the payment of income tax on the balance sheet basis, refuses after expiration of the legal time limit to submit his balance sheet and profit and loss statement;
2) when, without any valid reason, he is unable to submit for audit the books required by law;
3) when, as a consequence of irregularities which the Bureau of Internal Revenue deems as indicating fraud or intention of fraud, discovered in his bookeeping, it appears impossible to determine the net taxable income from the books kept under sections 9, 10 and 11 of the Commercial code;
4) finally, when in the return of profits or income he must file, the taxpayer failed to include an important part of the gross receipts realized during the fiscal year, or included in the general expenses and usual charges fictitious expenses or expenses exceeding their real amount, all the foregoing being elements which, given their importance, denote a spirit of fraud according to the Bureau of Internal Revenue.
Section 18.-To facilitate the inspection of the books of the taxpayers liable to the tax, they shall mention, separately, in the inventory book the goods which are:
1) In the principal store;
2) In the warehouses and branches with indication of the streets
and numbers of the premises;
3) At the custom House or elsewhere, when the invoices relative
to the goods have been paid or the drafts accepted;
4) In the warehouse 's of a guaranteed creditor or of a third party
in possession of the pledge.
In case of failure to make the above-mentioned entries in the inventory book the taxpayer shall pay the income tax on an amount ranging from eight to fifteen per cent of his volume of business or gross receipts, such as the Bureau of Internal Revenue may establish it.
Section 19.-Under penalty of a fine of not less than Gdes 50 (U. S. $ 10) and not exceeding Gdes. 1.000 (U. S. $ 200), exporters and importers shall keep:
1) a stock book indicating, at their respective dates, the coming
in and going dut of merchandise;
2) a cost book in which shall be computed the cost of the items received by consular invoice, care being taken to mention the purveyor's name and address, the numbers and dates of the commercial invoice and of the customs bill, as well as the name
and date of arrival of the ship which brought the cargo.
For the stock book, the importing dealer who is in the exceptional cases provided in section 16 of the Constitution, and who, consequently, is a wholesale and retail merchant, shall be deemed to have two departments, one of them for import. His bookkeeping shall consequently contain an account for imported stock, for example, which shall be credited by the debit of the purchases or merchandise accounts, gradually as he shall transfer a non-opened parcel to his retail department. The stock book shall not be required for this department but shall be required for the imported stock department, as just explained.
As a rule, the stock book is directly connected with the import or export phase.
The books required by the present section shall be duly stamped and initialled and their pages shall be numbered, as provided in the commercial code for the journal or the inventory book.
The Bureau of Internal Revenue, upon request, shall supply any interested person with models of accou ,nting books complying with the requirements of the present section, including, eventually, a combination of the stock and cost books.
To replace the stamped stock book and the cost book for importers of haberdashery or stationery goods, who are also retailers and whose main stock is located in their store, the following provisions shall apply.
They shall keep a stamped and initialled invoice-book with numbered pages; in said book shall be recorded all imports or purchases, as well as the following information:
1.-Name of the ship which brought the merchandise;
2.-Number, date and amount of the customs bill;
4.-Calculation of cost price;
5.-Page of the journal in which the entry has been made.
This kind of bookkeeping may be extended to other categories of merchants by Decrees of the President of the Republic.
Section 20.-Any accountant who shall have willingly made entries recognized fraudulent shall be liable to a fiscal fine of not less than Gdes. 50 (U. S. $ 10) and not exceeding Gdes. 1.000 (U. S. $ 200), assessed and collected by the Bureau of Internal Revenue. In case of a second offense, he shall be exceptionally indicted in the Correctional Court and liable to an imprisonment ranging from~two months to two years or to the withdrawal of his city license or to both penalties at the same time (French word for city license: patente).
NOTE.-Here is an important ruling on section 19.
BUREAU OF INTERNAL REVENUE
Pursuant to subsection 5 of section 19 of the law of September 12, 1951, merchants and manufacturers who import or export are hereby notified that while being stamped, initialled and with numbered pages, the stock book may either be bound or made of loose leaves individually stamped and bearing numbers printed or affixed by means of a numbering machine, for the purpose of inspection of the book by the Bureau.
For his convenience, the taxpayer may always use an additional and unofficial numbering, according to his needs, so that all sheets concerning the same item follow each other. At any time it must be possible to reconstitute the original book for inspection purposes.
Port-au-Prince, Sept. 28,1951.
CHAPTER V.- INDIVIDUAL INCOME TAX
Section 21.-Are liable to the individual income tax all wage earners whatsoever, business employees, public employees, people who practise liberal professions or other non-commercial lucrative occupations, moneylenders, people with investment income, and all those who derive income from any source not included among industrial and business profits.
Concerning houses put at the disposal of relatives, friends or others, without compensation, the estimated annual rental value which is used as the basis for the city tax on rent shall consequently represent the taxable amount.
Salaries of partners of commercial and industrial partnerships are part of the general bulk of their individual income and are subject to a monthly withholding at source like those of the employees. Salaries of self-employed merchants and manufacturers are not subject to the monthly withholding, and are declared and taxed under section 22 of the present law, with the other individual income items.
DIVIDENDS.-Dividends shall. be subject, on the part of business firms, to a 5% withholding at source which shall in no case be refunded; dividends shall not be included in the individual income tax returns.
The business firm shall transmit the money with an explanatory statement to the Bureau of Internal Revenue, from the 1st through the 15th of the month following the settlement of the dividends, under penalty of being personally held responsible for the money or amounts. Collection shall involve, against the firm, the usual 10% penalty per month or fraction of month of default and the issuance of a warrant of distraint against said firm. (French: contrainte).
Section 22.-The individual income tax return shall be filed with the nearest office of the Bureau of Internal Revenue on or before January 31st of each year for the State fiscal year ended on the preceding September 30th.
The amount of the tax shall, at the same time the return is filed, be paid to the Bureau of Internal Revenue against receipt or transmitted by registered letter with receipt, mailed before the time limit expires.
Said return shall be made by the taxpayer on forms put at his disposal by the Bureau of Internal Revenue.
The return shall show a tax deduction resulting from the withholding at source made on the salaries by the employer.
Concerning self-employed professionals (lawyers, notaries public, accountants, architects, doctors, dentists, tailors, shoemakers, mechanics and others, commission agents, manufacturers'agents and rejpresentatives) who pay the tax also on the rent basis allowance shall be made for the same in their individual income tax return, in conformity with section 3 of the present law.
OBLIGATION TO FILE RETURNS
Every natural person whose net individual income is over G. 5.000 (U. S. $ 1.000) or Gdes. 3.000 (U. S. $ 600), whether he is married or single, is required to file an individual income tax return.
Section 23.-Beginning with the month of October of each year, one twelfth of the income tax due by the State officials, employees and wage-earners, by reason of their salaries, shall be withheld each month on their salaries.
This same withholding shall be made by the employers on the salaries of their employees and the money is to be paid to the nearest office of Internal Revenue, accompanied by a statement signed by the employer, on or before the 15th of the month following the quarter for which the salary has been paid. Bonuses and gifts shall also be included in the statement submitted on or before the 15th of the quarter following that for which they have been paid, and such a statement shall be accompanied by the amount of the corresponding tax.
The quarterly statement, accompanying the payment, by the employer, of the tax on the salaries shall contain, for each one of the employees, the following information:
1) Surname and first name
3) Total of annual salary
4) General 10% deduction from salary (maximum of this deduction: Gdes. 1.000 (U. S. $ 200).
5) Total of personal exemptions
6) Total of Nos. 4 and 5 above
7) Annual taxable salary (No. 3 minus No. 6)
8) Amount of annual tax
9) Amount of tax withheld at source for the month (one twelfth
of No. 8).
The employer who fails to withhold the twelfths of the tax is personally responsible toward the Public Treasury. In any case, the collection shall involve, againts the employer the usual 10% penalty per month or fraction of default, beginning on the 16th of the month following that in which the withheld monies should have been paid in, an the issuance of a warrant of distraint against said employer. (French : contrainte).
Section 24.-PERSONAL EXEMPTIONS.-The following personal exemptions are the only allowed ones:
a) Gdes. 3.000 (U. S. 600) per year on the income of each
unmarried individual liable to the tax;
b) Gdes. 5.000 (U. S. $ 1.000) per year on the income of a married
c) Gdes. 1.000 (U. S. $ 200) per year and per head up to a total
of Gdes. 5.000 (U. S. $ 1.000) on the income of any individual having dependents, either ascendants or descendants i. e. children, father, mother, father-in-law, mother-in-law, etc.
The obligations resulting from the above paragraph r- are reciprocal.
The above mentioned Gdes. 1.000 (U. S. $ 200) deduction per year and per head does not apply to a child, grandson or granddaughter of the taxpayer, unless the dependent was during the taxable year:
1) under twenty-one years of age or
2) twenty-one years of age or over, and dependent either because he was studying in a school or university in Haiti or abroad, recognized by the State, or by reason of a mental of physical infirmity. In the case of an ascendant or descendant, only the one who furnishes over half the support may claim the deduction. In other words, several taxpayers may not claim the deduction on account of the same dependent.
One is entitled to deduction (a) or to deduction (b) but not to both together. Deduction (c) is eventually added to (a) or (b).
Deduction (b) is granted, in case of death of one of the spouses, to the surviving spouse who is not remarried and supports one o more children of the marriage.
DEDUCTION IN CASE OF INDIVIDUAL INCOME.-As to the individual income tax, there shall be no deductions for contributions to charities, taxes and imposts, insurance, losses from fire. They are replaced by a 10% general deduction from the adjusted individual income as explained hereunder and such deduction shall not exceed Gdes. 1.000 (One thousand Gourdes) (U. S. $ 200).
In computing the individual income tax, the way of proceeding is the following:
1) List of the different incomes forming the adjusted individual
income. The latter is composed of:
a) Gross salaries including gross gifts and gross bonuses; gross
income from annuities or pensions;
b) Gross rentals less one-third (1/3) of them; such third shall,
for the properties in question, be in lieu of any deduction
for depreciation, taxes, insurance, repairs, etc.
d) Other income (to be specified by the taxpayer).
11) 101/( general deduction on the adjusted individual income as determined under No. 1; such a deduction shall not exceed G. 1.000 (U. S. $ 200).
III) Deduction of personal exemptions a, b, c, allowed by the beginning of the present section.
IV) Deduction of the fraction of medical expenses exceeding the 10% of the adjusted individual income, described in No. II above, and that fraction shall not exceed Gdes. 1.000 (U. S. $ 200) if the taxpayer is unmarried or G. 2.000 (US, $ 400) if he is married; said medical expenses must have been made by the taxpayer for himself and the individuals covered by his personal exemptions. All the justifying documents shall be attached.
V) Deduction of interest paid, as per attached justifying documents.
PROF'ESSIONAL EXPEiNSES.-The following are also deductible, when justifying documents are attached, in the computation of the adjusted individual income: the taxpayer's professionnal expenses, specially the expenditures inherent in the operation of the Offices, laboratories, practices, clinics, etc.
Section 25.-i) Every taxpayer who, within the legal time limit, has failed to file with the nearest Bureau of Internal Revenue his individual income tax return, or has refused'-to furnish explanations for the audit of his return is liable to a fine of not less than Gdes. 25 (U. S. $ 5) and not exceeding Gdes. 2.000 (U. S. $ 400). In case of a second offense he shall be, in addition, liable to an imprisonment of not less than one month and not exceeding one year, to be imposed by the Correctional Court.
2) Every taxpayer, liable to payment of the tax on his income or profits who has not filed his return within the legal time, may, without prejudicing to the other legal sanctions, be invited by a summons served upon him, at the request of the Bureau of Internal Revenue, to file 'said return within thirty (30) clear days (i. e. a time in which the first and last days are not counted);
3) After that time limit, the tax base and the tax itself shall be assessed officially by the Bureau of Internal Revenue, according to the elements at the disposal of said Office, and that administrative decision shall not be subject to any recourse to court;
4) A writ covering the assessment made officially by the Bureau of Internal Revenue shall be served upon the taxpayer.
CHAPTER VI.- TAX RATES
NOTE : One Dollar US Cy is worth Five gourdes.
Section 26.-The income tax shall be paid according to the following rates:
from G. 0 to G. 15,000 5%1
from G. 15,001 to G. 40,000 10% on the amount in excess of G. 15,000 from G. 40,001 to G, 70,000 15% on the amount in excess of G. 40,000 from G. 70,001 to G. 100,000 20%1 on the amount in excess of G. 70,000 from G. 100,001 to G. 200,000 25% on the amount in excess of G. 100,000 from G. 200,001 30% on any surplus
To facilitate the collection of the tax on incomes or profits of small amounts, the Bureau of Internal Revenue shall have printed a table taxing them in an approximate manner, by groups of Gdes. 50 (U. S. $ 10), centimes being eleminated. This table shall have legal force after its publication in the official Gazette (Moniteur in French) and the taxpayer shall be free to use it or to make exact computations.
CHAPTER VII GENERAL PROVISIONS
Section 27.-The rates for both the individual income tax and the tax on industrial and business profits (Rent basis and Balance sheet basis) are those provided in section 26 of the present law.
Section 28.-In case of declared transfer, whether or not with ,compensation, the present holder remains jointly and severally responsible with the first taxpayer for any income tax not yet paid by the latter.
Section 29.-Every fine provided by the present law shall be provisionally assessed in the name of the Bureau of Internal Revenue, by the Director General or the Collector of Internal Revenue at an amount ranging from the minimum to the maximum and shall be collected by way of issuance and execution of warrant of distraint, under the law of June 6, 1924, on the Bureau of Internal Revenue, the decree-law of January 11, 1936 on warrants of distraint in Internal Revenue matters, and the decree-law of August 31, 1942 securing a prompt collection of receipts. (French for warrant of distraint: contrainte).
In case of litigation, the taxpayer shall submit to the court the receipt or paid bill, establishing payment of the fine, and shall only be allowed to ask the court to decide on whether or not there was cause for the fine. The case shall be heard to the suspension of all other business without postponement and without inscription in the trial calendar.
Section 30.-TAXPAYERS' BOOKKEEPING.- Professionnal people are requested to have a journal, initialled without cost, before use, by the Bureau of Internal Revenue, which shall also number its pages without cost. This book must have everyday entries and show the detail of the professionnal receipts and expenses of the taxpayer. This journal and all documents liable to be communicated shall be preserved during five years.
In case of physicians, surgeons, dentists, mid-wives and lawyers,
-the journal indicates, for the receipts opposite the date, only the detail of the sums received.
The Bureau of Internal Revenue has authority to require communication of the books and all justifying documents of expenses.
As a rule, every person liable to the tax, whether he is a merchant or not, other than the taxpayers required to keep books eitherstamped or with pages thereof numbered by the Bureau of Internal Revenue, shall have a summary bookkeeping.
Any infraction of the provisions of the preceding paragraphs shall. constitute a presumptive evidence againts the taxpayer.
Section 31.-PROFESSIONAL SECRECY.-Public officials and employees, as well as process-servers (French: huissiers) who have to intervene for applying tax laws, are required to keep, outside the performance of their duty, the most absolute secrecy about the profits or income of taxpayers, when they have known of them as a consequence of the execution of these laws, under penalty of the sanctions provided by section 323 of the Penal Code.
CHAPTER VIII- SPECIAL TAXA TION METHODS
Section 324-1) Without prejudice to the other means of investigation, taxation and sanction provided by the Income Tax legislation, the Bureau of Internal Revenue may, to arrive at the determination of the taxable income, use' either the method of similar taxpayers, or that of increase of net worth, or that of exterior signs. These methods apply to all categories of taxpayers liable to income tax (merchants, manufacturers, professional people, etc.).
2) METHOD OF SIMILAR TAXPAYERS.-In'default of an irrefutable and convincing bookkeeping, and in the presence of an important disproportion between the real results of an enterprise or of ail individual and the returns made, the gains or profits are determined by the Bureau of Internal Revenue, by considering the normal gains or profits of similar taxpayers and taking into account, if there be occasion, invested capital, volume of business (turnover) number of workers or employees, motive power used, rental value of the lands under cultivation or the buildings occupied as well as all other useful information.
In applying the method of normal gains, the Bureau of Internal Revenue may always, in support of its decision, submit either to the Tax Commission provided in Section 33 or to the courts, a statement certified by two of its sworn inspectors and the Director General of Internal Revenue, all of them bound by professional secrecy. That statement, which shall mention no names of taxpayers
taken for comparison, but shall contain the essential elements of the tax base of each one of them, shall be held true until contrary evidence is furnished by the taxpayer, establishing that in his own case such data do not apply.
The Bureau of Internal Revenue may, in applying the method of .similar taxpayers, establish, in agreement with the interested groups of professional people, contractual taxation bases.
3) INCREASE OF NET WORTH METHOD.-For the same reasons set forth in the Ist subparagraph of paragraph 2 above, the
-Bureau of Internal Revenue may also reestablish the taxpayer's income or gain by determining his net worth increase and adding, for example, to that am unt, unjustified bank deposits. Purchases of personal property or real estate, made in the course Qf the fiscal year in question are, among others, a part of the net worth increase.
When that method is used, the taxpayer's refusal to enable the Bureau of Internal Revenue to inspect his Bank deposits or withdrawals or to furnish any other information or submit any other document shall be a presumptive evidence against him.
4) METHOD OF EXTERIOR SIGNS.-If the net worth method cannot be applied, the assessment of the tax base may be made by the Bureau of Internal Revenue from signs or indices denoting economic circumstances superior to those shown by the income or .profits declared in the return, in case of bodies corporate as well as of natural persons.
To apply the method of exterior signs, the Bureau of Internal Revenue shall use, among others, the following elements of standard of living, whose total determines the minimum adjusted individual income; being understood that the Tax commission or the Court may decide on each particular case, in the event of disagreement .about any surplus:
Element of standard of Living Adjusted individual income
for the year
Annual rental value of the principal residence.... 3 times Annual rental value of the secondary residences.. 6 times Private automobile, used not more than five
years as per series ...................................... Gdes. 4.500 each (US S 900)
Private automobile used more than five years as
per series ................................................... Gdes. 9.000 each (US $ 1.800)
The elements of appraisal value in question are tied tef situations of fact, to use, independently of any question of right of ownership.
Section 33.-1) When the Bureau of Internal Revenue, applying the above methods, deems that it should rectify the amount of the income declared, it gives, by registered letter with receipt, before assessing the tax, notice to the taxpayer of the figure it intends to substitute for that shown on the return, and states its grounds for making the correction; the taxpayer is requested, at the same time, to submit his objections and to produce, eventually, any useful justifying documents within twenty clear days (Note. In Haitian and French law, the first and last days are not counted when computing a clear time limit). If the taxpayer fails, during twentyfive clear days, to furnish the required evidence or to submit the required accounting documents, then his return is considered void and his tax is officially assessed under subsection 14 of the present section.
2) Within the above-mentioned time limit, from the receipt of said letter, as per the Post-Office seal, said taxpayer shall have served by process server (French: Huissier) on the Bureau of Internal Revenue, represented by the Collector or the Director General, as the case may be, a writ containing either his acceptance of the proposed figure of net income or net profit, or his .desire to have an amount fixed by a Tax Commission, having it bench in the interested chief town. The Commission shall be composed of1) The (> of the Civil Court or a Judge designated by him,, President, (NOTE.--The presiding judge is called in French: Doyen) 2) two arbitrators, one chosen by the Bureau of Internal Revenue, the other designated by the taxpayer in said writ; if the taxpayer fails to designate his arbitrator, the President shall proceed;
3) In the same writ which the taxpayer shall have served on the Bureau of Internal Revenue to express his desire to have his income or profit fixed by the Commission, he shall make a summary statement of the case in discussion, with his grounds. This writ. shall contain summons to appear before the Tax commission within 15 clear days, at 10 a. mn. On the day and hour set, the President of the Commission may indicate another hour for pleading.
4) Within the same 15 clear days provided above, the taxpayer shall serve a copy of the above petition containing his plea and the
designation of his arbitrator, on the clerk of the Civil Court of the Jurisdiction in question;' the latter shall file it with the <>', and so the case shall be brought before said .
5) The Commission holds hearings in the Chamber of the Council, (NOTE.-French: Chambre du Conseil) at the civil court of the domicile of the taxpayer; it is assisted by a clerk of the same court. Before their operations, the members of the Commission in the presence of their President take the oath to fulfil well their mission in complete impartiality and to keep the secrecy of the deliberations in which they shall take part.
6) The Bureau of Internal Revenue shall file with the clerk's office a memorandum which shall be communicated to the interested party at least twenty-four hours before the hour of appearance, without need of having said memorandum served.
7) The parties shall be allowed to set forth their considerations in person or through a representative.
8) The commission deliberates validly whether the taxpayer is present or not. It also deliberates validly, provided two members at least are present, including the President. In case of disagreement, the President's voice is preponderant.
9) After examination of -the grounds of the Bureau of Internal Revenue and the taxpayer, the Commissioh decides, by stating the net income or net profit it has determined. It renders its decision in writing within a maximum time limit of eight clear days.
10) This decision shall be subject neither to opposition nor recourse to the court of appeals and shall be enforceable provisionally, (NOTE.-French: ex6cutoire par provision) on minutes, (NOTE.French: sur minute, meaning immediately without any other formality) without bail, notwithstanding any recourse to the Supreme court or prohibition of execution. (NOTE.-French text: d6fense d'ex6cuter).
11) Appeal from such a decision may be sought only in the Supreme Court.
12) The declaration of appeal to the Supreme Court shall be filed with the office of the clerk of the Civil Court where the Tax commission sat, within eight clear days from the day said Commission's decision was rendered, by the party whose interest it is to
do so, and the declaration shall be signed by said party or his representative, and by the court clerk. For the other formalities, the appeal shall be considered an urgent matter (NOTE.-French: affaire urgente).
13) The time limits of service of petitions and that of the declaration of appeal, provided in subsections 2, 3, 4 and 12 of the present section are prescribed under penalty of forfeiture (NOTE.-French: d~ch~ance).
14) In case the taxpayer fails to cause the formation of the Commission within the required time limit, the tax shall be assessed without appeal by the Bureau of Internal Revenue, at the amount previously indicated to the taxpayer, and the penalties shall begin to accrue on the first day of the month which shall follow the expiration of the time limit of 25 clear days prescribed by the first subsection of the present section for the notice the taxpayer had to give to the Bureau of Internal Revenue.
Section 34--The details of application of the present Law shall be settled by Presidential decrees and according to necessities.
Section 35.- The individual income tax returns for 1950-1951 shall be made on the old forms.
Section 36.-All Laws or parts of laws, all decree-laws or parts of decree-Laws in conflict herewith are hereby repealed. This law shall take effect on the first of October 1951. It shall be published and executed at the suit of the Secretaries of State for Finance and
-Justice, each one for the provisions which concern him.
Passed, etc ....
LAW OF AUGUST 8,1955 Protecting National Agriculture and Industry by permitting them to develop,
to improve and to increase their production.
(Official Gazette, Thursday, August 25, 1955, No. 75) PAUL E. MAGLOIRE
President of the Republic
In view of Sections 57 and 79 of the Constitution;
In view of the law of June 6, 1924, on the Bureau of Internal Revenue;
In view of the law of Aug 11, 1903, on payment of the foreigners' license tax;
In view of the Decree-law of Sept 23, 1935 on the city license;
In view of the law of July 26, 1926 on the customs tariff as well as all other decree-laws and laws in force concerning said tariff;
In view of the law of Sept 12, 1951 on income tax;
In view of the laws of October 8, 1949, and October 24, 1954, on New Industries;
Whereas in order to promote the economic development of the country, it is necessary to encourage the creation of new enterprises, whether agricultural or industrial, in order to facilitate the maximum use of local labor and raw materials and stimulate investments of private capital, either national or foreign;
And whereas it is proper to protect national agriculture and industry, to allow them to expand, to improve and to increase their production;
On the report of the Secretaries of State for National Economy, Finance and Commerce;
After deliberation in Council of the Secretaries of State;
And the Legislative Body has passed the following law:
TITLE I.- DEFINITION OF THE NEW
AGRICULTURAL OR INDUSTRIAL ENTERPRISE
Section L-Under the present law, the expression <> means:
a) every workshop, plant or factory utilizing, in accordance with the legislation in force on labor, the services of at least twenty people for the production, by elaboration or transformation of raw materials of local or foreign origin, of one or more articles not yet manufactured in Haiti on an industrial basis from October, 1949 forward;
b) every enterprise which grows a vegetable species either new, or not yet exploited on a commercial basis, or raises new animal species or breeds, or is engaged in any kind of breeding not yet established on a commercial scale.
Exceptionally, the status of new enterprise, either agricultural or industrial, with the advantages attached thereto, may be acknowledged in favor of a workshop, plant or factory which, while complying with the other conditions set forth in the first paragraph, utilizes the services of less than twenty people, provided that the e~tablishment in question spends monthly in salaries paid to the personnel exclusively assigned to production, an amount of at least three thousand gourdes (NOTE: US $ 600) and is in a position to establish this fact for any month of the fiscal year, to the satisfaction of the competent authorities. In case of an agricultural enterprise, the monthly salaries distributed may reach a minimum of one thousand gourdes (NOTE: US $ 200).
In no case the status of new enterprise, either agricultural or industrial, with the advantages attached thereto, shall be. cknowledged in favor or an establishment whose operations are limited to the preparation, modification or finishing, assembling or mounting of a product or article imported in bulk, in component parts, separated or isolated parts or pieces, unless said product or article, modified or finished, assembled or made up in Haiti, is for export.
TITLE II.- FISCAL ADVANTAGES GRANTED
TO NEW AGRICULTURAL OR INDUSTRIAL ENTERPRISES
Section 2.-Every new agricultural or industrial enterprise shall, during a period of ten consecutive years, be entitled to the following fiscal advantages:
1.-Exemption from import duties, not including consular taxes, storage duties and handling charges for:
a) building materials for buildings or premises for the establishment of the enterprise or the enlargement of existing buildings or premises, when these building materials are not produced locally;
b) machines, apparatus or tools necessary to the installation and operation of the enterprise, as well as spare parts for these machines and apparatus, machines and apparatus exclusively for prospecting and research work, as well as equipment and chemical products to be used in laboratory operations;
c) raw materials necessary to the production activities of the enterprise, when it is not possible to find them locally;
d) equipment and supplies for wrapping and packing the manufactured articles if they are not produced in Haiti;
e) trucks, locomotives, trailers and their accessories and spare parts, as well as railroad cars or cars exclusively affected to the transportation of the equipment, supplies and manufactured products of the enterprise;
f) for fuel used by agricultural tractors and motors of the agricultural and industrial pumping stations when the new industry meets the requirements of section 1.
This exemption shall only be granted on the favorable report of the Department of Agriculture determining the quarterly and annual needs of the enterprise, in connection with the number of motors and tractors effectively in service and their horsepower.
2.-Exemption from export duties for the manufactured products of the enterprise.
3.-Exemption from city license taxes and foreigner's license taxes in favor of the enterprise and the owner of the enterprise (French text: entrepreneur).
4.-Income tax exemption during the first year of operation and reduction of income tax in the proportion of 20% during the first five years of exploitation.
Section 3.-Enterprises established under the law of Oct. 8, 1949 shall, from now on, during a period of ten years from the date of beginning of operations, be entitled to the following advantages:
1.-Reduction of city license taxes, foreigner's license taxes and income tax, in the proportion of 50% during the first year and 20% during the five succeeding years.
2.-Exemption from export duties on the manufactured products.
3.-Exemption from import duties for the machines and apparatus necessary to the enterprise and the spare parts to be used with these machines and apparatus, raw materials which are not produced in the country, stores necessary for packing and wrapping the manufactured articles..
However, those which establish that they meet the requirements set forth in section 1 of the present law shall, from now on and up to the end of the above-mentioned ten years be entitled to the advantages described in section 2 above.
TITLE III.- CONSULTATIVE COMMISSION AND REQUESTS FOR FISCAL EXEMPTION
Section 4.-For the purposes of the present law, there is instituted in the Department of National Economy a Consultative Commission composed of representatives of the Departments of National Economy, Finance, Commerce, Agriculture and Public Works.
Section 5.-The Consultative Commission performs, under the direct control of the Secretary of State of National Economy, the following duties:
a) To examine as to their financial, economic and social aspects, requests for starting industrial enterprises, filed under the present law;
b) To examine and approve the list of machines, equipment and raw materials for which the customs exemption has been requested;
c) To suggest, for each authori zed enterprise, the most practical way of inspecting the use of the raw materials for which the customs exemption has been granted.
For the purposes of paragraphs a, b, c, the Department of National Economy, upon request of the Consultative Commission, may solicit the opinion of any other qualified technicians.
Section 6.-The Consultative Commission shall hold meetings in the Office of the Department of National Economy each time circumstances so require. The Commission chairman shall be the Representative of 'the Secretary of State of National Economy who shall have the responsibility of the Commission's Secretariat.
Section 7.-Every natural person or body corporate, wanting to be entitled to the exemptions provided in the present law, shall file with the Department of National Economy a request containing the following information:
a) amount of capital to be invested;
b) location of the enterprise;
c) detailed list and cost of the machines and apparatus it intends to use, with mention of the country in which they are manufactured;
d) approximate number of people to be employed by the enterprise, including foreign specialists, if there are to be any; in this last case, mention shall be made of the probable duration of their services;
e) nature of the articles or products to be manufactured by the enterprise; samples shall be submitted if possible;
f) complete list of raw materials, specifying their local or foreign origin;
g) contemplated markets for the products of the enterprise;
h) time limits within which the enterprise may begin its installation work and its production operations.
The request shall be accompanied with plans and specifications of the buildings, in case the enterprise desires to be entitled to the customs exemption for the building materials.
Section 8.-Within eight days from the reception of the request for tax exemption, the Department of National Economy shall forward the complete file of the same to the Consultative Commission for study and explanatory report.
Section 9.-Not later than fifteen days after the request has been transmitted to the Consultative Commission, said Commission shall submit the result of its deliberations to the Secretary of State of National Economy, in the form of a report with recommendations, and copies of said report shall be forwarded to each interested Department by the Consultative Commission.
Section 10.-After examination by the Secretary of State of National Economy of the report of the Consultative Commission, the decision, whether or not favorable, shall be conveyed, by registered mail to the interested party. In case of a favorable decision, notice of the same shall be given to the public, by means of a publication in the Official Gazette, and in a daily of large circulation. The publication in the daily shall be made at the beneficiary's expense. (Official Gazette in French: Moniteur).
The Secretary of State of National Economy shall convey the decision to the Secretary of State for Finance.
Section 11.-Manufacturers already established in this country who think they are exposed to grave prejudices because of the exemption decision, may, within 30 days from the above-mentioned publication, file their claims with the Department of National Economy, by registered letter with receipt. Said Department shall
transmit the file to the Consultative Commission, which shall proceed to a new examination of the question by making, if it deems it necessary, a supplementary inquiry.
If the Commission decides to modify its decision, it will send a justifying report to the Secretary of State of National Economy, who, in agreement with the Secretary of State of Finance, shall submit the question to the Council of Secretaries of State for approval or disapproval. The new decision shall be published in the Official Gazette and in a daily of large circulation, at the expense of the interested party.
Section 12.-If the decision is favorable, the Department of National Economy shall fix a time limit of not less than one year and not exceeding two years within which the enterprise entitled to the exemption shall begin its construction and installation work and its production operations.
The duration of the exemption shall start from the moment when the enterprise began to operate and produce.
Section 13.-Where the needs in raw materials of an enterprise exceed the available local production, the exemption provided in paragraph 1 of section 2 and paragraph 3 of section 3 may be granted for the complementary quantities of imported raw materials. In such a case, the enterprise shall submit at least every three (3) months to the Department of National Economy an estimate of the quantities of raw materials it intends to import.
Section 14.-During the ten years the exemption granted to a new industry lasts, and in case it is evident that the production of the industry does not meet the needs of local consumption and during the period that remains for the expiration of the ten years, the Council of Secretaries of State may upon their request grant the same exemption to other manufacturers who intend to exercise the same activity, provided a justifying report is submitted by the Consultative Commission in conformity with the provisions of the present law.
TITLE IV.-INSPECTION AND SANCTIONS
Section 15.-The manufacturer who has received duty-free articles must be in a position, at any time, to justify the use he has made of the same. To that effect, he shall have a stock book which
shall be. numbered and, initialled by the Bureau -of Internal Revenue, and shall be submitted upon any request. This. stock book shall enumerate the goods ordered and received with all the indications useful for inspection: number of bill of lading,. date of arrival, quantity and weight, etc.
Section 16.-Under the penalty of refusal to examine any request for customs .exemption, according to the prescribed administrative procedure, the manufacturer shall submit upon any request of the competent service, his stock book kept up to date. Moreover, he shall make, not later than on the 10th of each month, a statistical report on the production of his enterprise, on a form prepared for that purpose. Said report, certified to be true and duly signed, shall be sent to the Department of National Economy.
Section 17.-As soon as any enterprise which has obtained exemption from import duties, starts business, the Section of Industrial Control of the Department of National Economy in accord with the interested party, shall establish, for its inspections, a ready reckoner of the use of the raw materials and other articles received.
Acceptance of this ready reckoner shall be stated in an official report drawn up by two delegates of the Department of National Economy and signed by the owner of tbe interested enterprise.
Section 18.-No article received duty-free shall be sold or diverted from its purpose without written authorization from the Department of National Economy and previous payment of the corresponding customs duties.
Any sales or use of articles received duty-free, made contrary to these provisions shall be held fraudulent and illegal. The articles so sold and used shall be subject to the double of the prescribed duties, the collection of which may be made by means of an administrative warrant (Note.- French: contrainte) in pursuance of the decree of July 25, 1940. The offender shall moreover be punished by a fine of not less than Gdes. 5.000 (US. $ 1.000) and not exceeding Gdes. 25.000 (US $ 5.000), to be imposed by the Correctional Court upon proceedings by the Public Prosecutor, to the suspension of all other business.
. These fines shall be collected by the Bureau of Internal Revenue and deposited with the Public Treasury as miscellaneous receipts.
In case of second offense, the fine shall be doubled and the suspension of the tax exemptions shall be of right.
Section 19.-The Inspectors of the Department of National Economy, the agents of the Customs Administration and those of the Bureau of Internal Revenue shall have authority to inspect and control particularly through the inspection of the stock book, the industrial establishments entitled to exemption from customs duties, in order to detect any abuse of the fiscal advantage granted by the present law. The offenses shall be verified by an official report drawn up by two inspectors. This official report shall be forwarded, through the official channels, to the Department of National Economy.
Section 20.-The tax exemptions provided in sections 2 and 3 of the present law may be suspended when the beneficiary has committed one of the following breaches of the law:
a) When the enterprise has not been installed within tile time limit fixed by the Department of National Economy, except in case of duly verified circumstances beyond the control of the owner;
b) When the benefit of the exemptions has been obtained by means of false declarations concerning the importance and nature of the activities of the enterprise;.
c) When the enterprise has discontinued its production activities during a three month period, in the course of a single year, except in case of duly verified circumstances beyond the control- of the owner.
In the case mentioned in paragraph (b), all taxes and duties from which the enterprise had been exempted shall be due until the time the decision withdrawing the exemptions became effective. Said taxes and duties shall then be computed, assessed and collected by the interested administrations under the laws in force on the matter.
TITLE V.-PROTECTION OF NATIONAL INDUSTRY
Section 21.-The industrial enterprises governed by the presentlaw, which shall be able to prove, to the satisfaction of the Departments of National Economy, Finance and Commerce, that they are in danger of discontinuing their operations because of the competition of similar imported products, shall have the right to a customs protection within the purlieus of the International Agreements in. force.
Every time a protection has been granted, under any form, to a national industry, the Secretaries of State for National Economy and Commerce shall have authority to prescribe all measures useful to the protection of the legitimate interests of the consumers and shall particularly have the. right to request communication of the accounting books and documents in order to fix the maximum sale prices on the interior market.
TITLE VI.-REPEAL CLAUSE
Section 22.-All laws, decrees, decree-laws and all parts of laws, decrees, decree-laws, in conflict herewith are hereby repealed and this law shall be published and executed at the suit of -the Secreta*ries of State for National Economy, Finance and Commerce, each one for the provisions which concern him.
NEWLY ESTABLISHED INDUSTRIES
(sections of the old law still in force)
LAW OF OCTOBER 8, 1949
encouraging the establishment of entirely new industries or others
Official Gazette of Oct. 24, 1949, No. 105
Note.-The following does not apply any more to industries classified as <>. See Section 2 of the law of Aug 8, 1955 for them.
INDUSTRIAL ENTERPRISES IN GENERAL
Section 9.-During the first twelve months of existence of any industrial enterprise, whether or not it qualifies as new, set up after the promulgation of the present law, whether it is an agricultural or manufacturing industry or a handicraft venture, its city license duties (NOTE.-French: patente) and income tax shall be reduced by half. The same applies to the license tax in general. During the following twelve months, the taxes and imposts in question shall be reduced by 20%.
Section 10.-For the purpose of the above provisions, the allotment calculations shall be made for the actual number of months, unless special tax laws divide the tax year into quarters or otherwise.
LAW OF JUNE 22, 1948
Favoring the construction of hotels in order to promote tourism.
(Official Gazette, Thursday July 1, 1948, No. 56).
President of the Republic
In view of Section 61 of the Constitution;
Whereas one of the conditions indispensable to the promotion of Haitian tourism is the construction of appropriate hotels;
And whereas to encourage investment of capital in this new branch of national activity, exemption from income tax and from customs duties on building, plumbing and electrical material as well as on equipment and furniture intended to be used for the sanitary, hygienic, plastic or other installations of these hotels may be granted upon request;
On the report of the Secretaries of State for Finance, Tourism and Public Works;
After deliberation in Council of the Secretaries of State.
And the Legislative Body has passed the following law:
Section 1.-Every hotel or group of detached hotel buildings now under construction or to be built, having a capacity of fifteen (15) or more rooms, every hotel or group of detached hotel buildings now existing, to which ten (10) or more rooms shall be added in order to bring its total capacity to a minimum of 15 rooms, shall be entitled to the following advantages after complying with the formalities prescribed by the present law:
a) exemption ((for the first establishment)s, from customs duties on all the following articles: wood, iron, cement, nails and others, hardware, plumbing and electrical material, equipment and furniture-necessary to the sanitary, hygienic, plastic or other installations tobe used in the..building; fabrics- necessary. to the, linen-room, within the limits of the needs of the hotel, silver-plate, plates and..
dishes. This exemption may be granted for a period of five years in favor of every new hotel, from the date of opening. In respect of existing hotels, the exemption shall be proportional to the number of rooms added.
Section 2.-In order that the exemption from customs duties be granted, the following conditions are required:
a) The contractor shall submit to, the Fiscal Department of the Bank a certificate from the Department of Public Works attesting that articles manufactured in Haiti of the same quality and at the same price cannot be obtained on the market;
b) The materials and equipment described in section 1, paragraphs
(a), shall be consigned directly to the enterprise or to an importing merchant specially and previously authorized by the Departmentof Finance to receive these articles on account of said enterprise.
c) A copy of the maps and specifications, duly approved by the Departments of Public Works and Tourism shall be submitted to the Fiscal Department of the Bank accompanied by an import permit from the Department of Finance;
d) Every room shall have an area of at least 16 square meters with bathroom, including shower, washbowl, W. C. with hot and cold water, bathroom adjoining the room. Each room shall also have a large wardrobe and shall be properly furnished with two type beds, with a (> mattress or a mattress of a similar type or with a double bed or a 1 2 place bed, same type, a comfortable armchair, one or two night tables, 1 or 2 cupboards or cheval glasses, and appropriate electric system as well as a bell system. A communication door inside the room shall be provided with a 24 x 72 high mirror. The plans of the plumbing, electricity and bell system installations shall be submitted to the competent services of the Public Works and the Electric Light Company for verification purposes.
Section 3.-The income tax exemption shall be granted to the hotels and groups of separate hotel buildings mentioned in section 1, only if the new constructions or additions made to existing hotels meet the requirements of section 2, paragraph (d) of the present law.
Section 4.-The Engineers of the Public Works Department and representatives of the Department of Finance may, at any time, inspect the use of the articles imported duty-free.
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Section 5.-The beneficiary of the customs exemption shall notify the Department of Finance of any sale he intends to make on the local market of articles he received exempt from duty and which are no longer necessary to his business. In such a case the customs duties shall be paid before the sale of the articles. Preference shall be granted to public services before any sale to private individuals.
Section 6.-Every article imported exempt from duty, which has been sold without previous payment of the duties shall be subject to double duty, which may be collected by way of an administrative warrant of distraint (NOTE: French: contrainte) under the decreelaw of July 25, 1940 on confiscation.
Section 7.-In case hotels or groups of separate hotel buildings are put to another purpose, having taken advantage of the provisions of the present law, in the course of the ten years following the date of opening of said establishments, notice shall be given to the Secretary of State for Finance who shall then require payment of the unpaid customs duties. The owner of the enterprise (NOTE.French text: entrepreneur) who fails to comply with this obligation within thirty days after the date of the change of purpose, shall be liable to double duties the collection of which shall be made as provided in section 6 above.
Section 8.-All laws or parts of laws in conflict herewith are hereby repealed, principally the law of September 4, 1947. This law shall be executed at the suit of the Secretaries of State for Finance, Tourism and Public Works.