USVI Public Records

Document text

VIRGIN ISLANDS BUREAU OF INTERNAL REVENUE Joel A. Lee, CPA, CGMA, CFE Director 1 WELCOME INTRODUCTION OF ATTENDEES PURPOSE OF THIS PRESENTATION 2 MISSION To administer and enforce the tax laws of the Virgin Islands. 3 TITLE 33 V.I.CODE SEC. 42 • Manufacturers are required to pay excise tax on goods manufactured in the VI, unless otherwise exempted. • There is no Excise Tax on goods manufactured in the VI which are sold to purchasers who take delivery and actual possession outside of the VI. 4 WHAT IS A MANUFACTURED GOOD? The transformation of goods or wares (physical or chemical) by manual labor or machinery into new products. Manufacturing activities are those described in the North American Industrial Classification System (NAICS) codes under sections 11, 31, 32 and 33. For more details regarding the NAICS codes please visit the following website: https://www.naics.com/naics-search-results/ 5 WHAT ARE THE TAX RATES? • The excise tax rates on locally manufactured goods and imported goods are the same. • The rates can be found in Title 33 VI Code section 42(a). 6 GOODS IMPORTED TO BE USED IN MANUFACTURING • Information is submitted using the Excise Web Portal https://excise.bir.vi.gov • Excise Tax on imported raw materials to be used in manufacturing will be deferred until the time of sale of the manufactured product. 7 CONTAINER TAX • The tax deferral granted for importation of raw materials used in the manufacturing process is not applicable for the container tax. The container tax is due at the time of importation. 8 ITEM NUMBERS FOR GOODS IMPORTED TO BE USED IN MANUFACTURING ITEM NUMBER DESCRIPTION OF ITEM M24 Raw material used in the production of food stuff M28 Raw material used for packaging made in the VI: such as paper, plastic, glass, etc. M33 Raw material used in the production of tobacco and cigars M35 Raw material used in the production of beer M36 Raw material used in the production of carbonated beverages M47 Raw material used in the making of clothes M55 Raw material used in the production of rugs M56 Raw material used in the construction business, and for screens, cabinets, etc. M59 Raw material used in the production of soaps, detergents, and toilet preparations M60 Raw material imported for manufacturing purposes for which no specific tax category exist 9 EXAMPLE OF AN IMPORT RETURN CONSISTING OF RAW MATERIALS 10 FILING FORM 721VI FOR GOODS MANUFACTURED IN THE VIRGIN ISLANDS • The excise tax is applicable in the month the item is sold. • The tax is calculated based on a 5% mark-up of the manufacturing cost multiplied by the applicable tax rate. • All manufacturers including those with EDC benefits are required to file Form 721VI along with the manufacturing cost worksheet (Form 721VI MWKS) 30 days after the close of the month concerned. 11 EXAMPLE FORM 721VI MWKS 12 INSTRUCTIONS FOR COMPLETING FORM 721VI MWKS (Use as many worksheets as needed to report each month’s manufacturing activity) Manufacturer – include the name of the business entity submitting the return EIN/SSN -Insert the Employer Identification Number of the business entity or the Social Security number of the sole proprietor Current Month and year – the month and year for which the manufacturer’s goods were sold Item Number – select the appropriate code number from the drop down box Description of Merchandise – provide accurate description of the items manufactured 13 INSTRUCTIONS FOR COMPLETING FORM 721 MWKS (CONTINUED) A. Total Units Sold – Insert the total units of the item described that were sold during the month being reported B. Manufacturing Cost Per Unit – Provide the cost price for manufacturing one unit of item described. Be sure to secure all documents and calculations in the event of an excise tax audit. C. Total Manufacturing Cost – Items sold times the manufacturing cost per unit D. Total sales – Provide the total sales generated from the sale of the manufactured item during the month reported E. Gross Profit % - Total sales less the total manufacturing costs divided by the manufacturing cost The total of all manufacturing costs for each item code and category of goods manufactured for the month will be transferred to the Form 721VI, in the “net invoice value” field. The Form 721VI will be used to calculate and pay the excise tax per month. Attach sales invoices for all manufactured products sold for the month, including those sales that are exempt from Excise Tax 14 NO SALES ACTIVITY? For instances where there are no sales activities of locally manufactured goods for the month, Form 721VI must still be filed using code “M00” in the Item Number field. 15 WHAT ARE THE RATES FOR LATE PAYMENT? Penalty rate is 5% per month, up to 25% Interest owed for late filing and/or payment is 1% per month, until paid. 16 HOW TO CREATE AN EXCISE WEB ACCOUNT Step 1: Navigate to website A.Open a browser preferably Firefox or Chrome. B.Go to the address https://excise.bir.vi.gov Step 2: Complete registration form A.Click the “Register” button. B.Fill out the form with our in- formation. C.Click the “Register” button. 17 Step 3: Activate you account via your email A. Navigate to the email inbox you entered on the registration form. B. Click the link “Click here to complete your registration and activation” link as instructed. Step 4: Create a valid password DONE! 18 HOW TO SUBMIT A 721VI VIA EXCISE WEB Navigate to the Excise website A.Open a browser preferably Firefox or Chrome. B.Enter the address https://excise.bir.vi.gov Login into your account A.Enter the email and password used to register in the fields pro- vided. B.Click the “Sign In” button. CONTINUE 19 Create new 721 Tax Return A. Now that you have signed in click on the “New 721 (Tax Return)” button. Complete form (STEP 1) A. Complete the form presented using the information provided by your carrier. All of the fields surrounded by a red border are required. If you are a Manufacturer of goods and are filing your monthly Excise Tax Return, please use the instructions on the next page to complete the form. If not, then continue to complete the form as usual. B. Click the “Next Step” to proceed when you’re done. CONTINUE 20 Instructions for the Monthly Excise Tax Return for Manufacturers of Goods in the VI A.When preparing a return for manufacturing; In the field requiring a Bill of Lading, Please use this format: MAN-TaxPeriod-SSN\EIN For example MAN-11-30-2018-123456789 B.For the Port of Entry, please select the “Manufacturing Port” for the island where the goods were made. C.The Importing Carrier will be your name or the name of your business. D.The Country of Origin will be VI. E.Your Port of Lading and Voyage Number should both be MAN in VI F.Proceed to the next step once finished. CONTINUE Complete form (STEP 1 cont.) The rest of this page was left blank intentionally. 21 Complete form (STEP 2) A. This section requires you to enter the description of the merchandise being imported or manufactured. Fill in the information then proceed to the “next step” by clicking B. For Manufacturers: your invoice date and number will be the last day of the month for which you are filing. e.g. 11-30-2018 Complete form (STEP 3) A. This section requires you to upload any supporting documentation provided by your carrier, retailer, and/or distributor . Click the “Add Files” button to add the documents to the form. Please note: Only PDF, JPEG & TIFF are supported. Also all supporting documents must be up- loaded if you intend to use the “Online Pay” function. Manufacturers: upload your worksheets, form 721VI MWKS, and all sales invoices for the month being reported. CONTINUE 22 Submit Form A. Once your documents have been attached, click the “Finish (Submit / Print 721)” button. DONE! A. Click “Submit & Print 721 (Tax Return)” or “Submit & Close (721 Tax Return)” if you don’t have a printer. 23 24 WHERE TO SUBMIT QUESTIONS? etax@irb.gov.vi 25 QUESTIONS?? 26