FOREWORD. Trinidad and Tobago

Transcription

1 2016/17

2 FOREWORD A country's tax regime is always a key factor for any business considering moving into new markets. What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double tax treaties in place? How will foreign source income be taxed? Since 1994, the PKF network of independent member firms, administered by PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses with the answers to these key tax questions. As you will appreciate, the production of the WWTG is a huge team effort and we would like to thank all tax experts within PKF member firms who gave up their time to contribute the vital information on their country's taxes that forms the heart of this publication. The PKF Worldwide Tax Guide 2016/17 (WWTG) is an annual publication that provides an overview of the taxation and business regulation regimes of the world's most significant trading countries. In compiling this publication, member firms of the PKF network have based their summaries on information current on 30 April 2016, while also noting imminent changes where necessary. On a country-by-country basis, each summary such as this one, addresses the major taxes applicable to business; how taxable income is determined; sundry other related taxation and business issues; and the country's personal tax regime. The final section of each country summary sets out the Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments. While the WWTG should not to be regarded as offering a complete explanation of the taxation issues in each country, we hope readers will use the publication as their first point of reference and then use the services of their local PKF member firm to provide specific information and advice. Services provided by member firms include: Assurance & Advisory; Financial Planning / Wealth Management; Corporate Finance; Management Consultancy; IT Consultancy; Insolvency - Corporate and Personal; Taxation; Forensic Accounting; and, Hotel Consultancy. In addition to the printed version of the WWTG, individual country taxation guides such as this are available in PDF format which can be downloaded from the PKF website at PKF Worldwide Tax Guide 2016/17 1

3 IMPORTANT DISCLAIMER This publication should not be regarded as offering a complete explanation of the taxation matters that are contained within this publication. This publication has been sold or distributed on the express terms and understanding that the publishers and the authors are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication, nor for any error in, or omission from, this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances. PKF International Limited (PKFI) administers a family of legally independent firms. Neither PKFI nor the member firms of the network generally accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. PKF INTERNATIONAL LIMITED JUNE 2016 PKF INTERNATIONAL LIMITED All RIGHTS RESERVED USE APPROVED WITH ATTRIBUTION PKF Worldwide Tax Guide 2016/17 2

4 STRUCTURE OF COUNTRY DESCRIPTIONS A. CORPORATION TAX B. INCOME TAX C. BUSINESS LEVY D. CAPITAL GAINS TAX E. NATIONAL INSURANCE F. HEALTH SURCHARGE G. VALUE ADDED TAX (VAT) H. GREEN FUND LEVY PKF Worldwide Tax Guide 2016/17 3

5 MEMBER FIRM City Name Contact information Port of Spain Renee-Lisa Philip BASIC FACTS Full name: Republic of Trinidad and Tobago Capital: Port of Spain Main language: English Population: 1.22 million (2014 estimate) Major religion: Christianity, Hinduism, Islam Monetary unit: Trinidad and Tobago Dollar (TTD) Internet domain:.tt Int. dialling code: KEY TAX POINTS Resident companies are liable to corporation tax on their worldwide income. Other companies are taxed on their income from sources in Trinidad and Tobago. The standard rate of corporation tax is 25%, but this can be varied if there is a double tax treaty. Although the basic rate of VAT is 12.5%, some items such as exports and some basic foodstuffs are charged at the rate of 0% and some services such as real estate transactions as well as financial and insurance services are VAT exempt. Stamp Duty is levied on several documents, and also on transfers of commercial or residential real estate charged at rates of 0%, 2%, 5%, 7%, 7.5% and 10%. A. CORPORATION TAX This is a tax on business profits accruing in Trinidad & Tobago. Resident companies (those controlled from Trinidad and Tobago, wherever they are incorporated) are liable to corporation tax on their worldwide income. Other companies are taxed on their income from sources in Trinidad and Tobago. The standard rate of corporation tax is 25%. However, this can be varied if there is a double tax treaty. Trinidad & Tobago has double taxation treaties with Barbados, Guyana, Jamaica, Antigua- Barbuda, Belize, Dominica, Grenada, Montserrat, St. Kitts-Nevis-Anguilla, St. Lucia, St. Vincent and the Grenadines, Canada, Denmark/Norway, Germany, Italy, Norway, Sweden, Switzerland, United Kingdom, United States, Venezuela, India, France, Spain, Brazil and Luxembourg. A credit is given against the company's corporation tax liability for any business levy paid. See section on business levy. 'Income-generating' expenses i.e. expenses that are wholly and exclusively incurred in the production of the income, are deductible when calculating taxable income. Allowable deductions include: Bad debts; Rates and taxes on real estate; Fire insurance premiums; Contributions paid to an approved pension fund for the benefit of employees; Lump sum payments made to an employee for past services; Employer contributions to national insurance; Employer contributions to an approved profit sharing plan; Management charges paid. 150% of promotional expenses incurred wholly and exclusively in creating or promoting exports to foreign markets; 150% of employee training expenses; Art and culture up to a maximum of TTD 3,000,000. Non-resident companies trading in Trinidad and Tobago through a permanent establishment are PKF Worldwide Tax Guide 2016/17 4

6 subject to a further withholding tax of 5% of their taxable profits less allowances for corporation tax paid. The tax is payable regardless of whether net profits are remitted back to head office. Trading losses may be carried forward indefinitely for relief against future profits. Trading losses cannot be utilised against the profits of earlier years. B. INCOME TAX Income from all sources, after allowable deductions, is taxed at a flat rate of 25%. Non-residents are not entitled to tax deductions. Allowable deductions include the following: Personal Allowance TTD 72,000; Contributions to pension plans and 70% of national insurance contributions TTD 50,000; Alimony - 100% of contributions. Individuals who are resident and domiciled in Trinidad and Tobago are liable to income tax on their worldwide income. Those who are resident but not domiciled in Trinidad and Tobago are liable to income tax on their income arising in Trinidad and Tobago and on any income brought into the country from abroad. Dividends received by resident individuals from resident companies are exempt from tax. Non-resident individuals are taxed on their income from sources in Trinidad and Tobago. C. BUSINESS LEVY This tax is levied on gross sales i.e. all income received in the ordinary course of business activities, before allowing any deductions for business expenses. The rate of the Business Levy is 0.6% of the gross sales/receipts. The Business Levy is not payable in the first three years after a company is first registered. D. CAPITAL GAINS TAX Capital gains tax is charged at a flat rate of 25% on profits made on the disposal of an asset within twelve months of acquisition. Otherwise, there is no capital gains tax. E. NATIONAL INSURANCE Employees and employers must pay national insurance. Contributions are calculated based on established wage classes. The maximum employee contribution is TTD 5, per year. The employer pays twice that of the employee. F. HEALTH SURCHARGE The employee's contribution is approximately TTD 429 per year. Employers do not contribute. G. VALUE ADDED TAX (VAT) This tax is levied on the selling price of goods and services and on the value of goods imported into Trinidad and Tobago. Businesses must register for VAT if their annual sales exceed TTD 500,000. Although the basic rate of VAT is 12.5%, some items such as exports and basic foodstuffs are charged at the rate of 0% and some services such as real estate transactions as well as financial and insurance services are VAT exempt. Businesses, other than those making exempt supplies, can recover the excess of VAT paid on purchases over VAT received on sales. H. GREEN FUND LEVY This tax is levied on gross sales i.e. all income received in the ordinary course of business activities, before allowing any deductions for business expenses. The rate of the Green Fund Levy is 0.3% of the gross sales/receipts. PKF Worldwide Tax Guide 2016/17 5

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