ST. VINCENT AND THE GRENADINES Tax Structure TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS Taxes on Income, Profits and Capital Gains

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1 1. TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS Taxes on Income, Profits and Capital Gains Basis for assessment is the previous calendar year; income including social security employees are subject to pay as you earn deduction. payments whether earned locally or From income year 1996, the top marginal rate will abroad: war pensions, scholarships, be reduced to 40%. interest on certain government s debt, dividend, interest on deposits in banks The standard deduction is applied to income from and building societies in St Vincent. employment. The itemised method is applied to Farming income up to the year income from all other sources. - Income less than $10,000 0 per cent In calculating chargeable income, the - On the chargeable income following allowances are granted: - Under $ per cent - $ $ per cent - Earned income allowance 10% of - $ $ per cent earned income to a maximum of - Over $30, per cent $ Personal allowance - $1,200 - Spouse allowance - $700 - Child allowance - $400 - Dependent relative allowance - $200 - Limited allowances are also granted for mortgage payments and insurance - Insurance: a limit of $3,600 per annum (including NIS payments) - Mortgage: a limit of $10,000 per 1.1 Personal Income Tax Levied on the chargeable income of resident individuals at rates of: Exemptions include income of diplomats and ministers of religion, all pension annum. 1.2 Corporate Income Tax On the previous calendar year net income of resident 40 per cent - Companies that export to the OECS companies from all sources and the income of non- are charged rates of 35 per cent resident companies earned from carrying on business - Non-OECS CARICOM markets 30 in St Vincent and The Grenadines. per cent - Extra CARICOM 25 per cent. 1.3 Withholding Tax On payments to non-residents in the form of royalties, rents, management fees. - Rent 10 per cent - Inter-corporate dividends Exempt Re-insurance premiums 127

2 TYPE OF TAX TAX BASE The after tax profits of branches of non-resident TAX RATE - Other 20 per cent EXEMPTIONS AND DEDUCTIONS companies are subject to a 15% withholding tax. 2. Payroll and Work Force None None None Tax 3. Taxes on Property 3.1 Property Tax Levied on the annual rental value of property 5 per cent The following are also exempt despite their value: Churches, public cemeteries, Lower rates are applied to the government properties, residence of following: minister of religion, property used for Agricultural property: 2.5 per cent church activities, property owned by Hotel and apartments: 2.5 per cent approved charitable organizations, and tourism related developments greater property used by educational institutions than $20,000: 1.5 per cent 3.2 Alien Land Holdings Tax On the holdings and transfer of land in St Vincent by aliens. On the sale of land 10 per cent On the annual rental value of leased land 10 per cent 4. Taxes on Domestic Goods and Services An annual license fee to hold land $ Excise Duties Duty on the domestic production of rum. $11.00 per over proof gallon and $18.00 under proof gallon. 4.2 Hotel Turnover Tax Levied on the room and food bills of guest at the 7 per cent Premises operated by the government or hotel. premises with less than six bedrooms. 4.3 Interest Levy Commercial Bank On the balances in all interest bearing accounts of all banks operating in St Vincent. The Tax is based on 1 per cent the average balance in the preceding calendar year. All monies loaned out for mortgage financing can be set off against the balance subject to the tax. Interest earned on those mortgages is also exempt to a maximum of $150,000 at 12 per cent interest. 4.4 Insurance Premium Tax On the insurance premium received by companies None for liabilities in St Vincent. - Non-Life 5 per cent - Life 3 per cent 128

3 TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS 4.5 International On the cost of outgoing traffic by way of telephones, 10 per cent Telecommunications telexes and telegrams. Charges 4.6 Entertainment Tax Levied on the receipts from entertainment 10 per cent 4.7 Licenses Yachts Varies with size of boat Bareboat Yacht - annual license range 600-1,400 - occasional license range Chartered Yacht License Bank License Annual licence fee for commercial banks. - Domestic Banks: $15,00 - Domestic Branches: $1,500 - Foreign Banks: $20,000 - Foreign Branches: $2, Professional License To practice a profession as: Liquor To sell liquor as follows: - Doctor, Lawyer, or Accountant. $ Druggist $ Optician $ Motor vehicle insurance agent $ Fire insurance agent $ Broker : Customs $ Insurance $ General insurance $2, Travel agency $ Traders $ Wholesale $ per annum - Retail (town) $ per annum - Retail (country) $85.00 per annum - Retail (Grenadines) $85.00 per annum - Hotel $ per annum - Refreshment house $ per annum - Occasional $ per day - Bottle $ per annum - Proprietary dues $ per annum Dealers in Television To sell televisions $ per annum 129

4 TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS Pool Board To operate a pool board $ per annum Entertainment License Paid by persons holding entertainment functions: - For one specific occasion $5.00 per hour - For a period exceeding one day but less than six $ months - For a period not exceeding 12 months $ Television Licence (Tax) Motor Vehicle License Paid by the importer of a new television. An annual registration fee for motor vehicles as $10.00 follows but the tax can be paid half yearly: - Private motor cars not exceeding 2,000 pounds $ per annum tare - Private motor cars not exceeding 2,000 pounds $ per annum but not exceeding 3,000 pounds tare - Private motor cars exceeding 3,000 pounds tare $ per annum - Private motor tricycles not exceeding 2,000 $ per annum pounds tare - Private motor tricycles exceeding 2,000 pounds $ per annum tare - Private motor cycles without side car $ per annum - Private motor cycles with side cars $ per annum - Goods vehicles less than 2 tons tare - Goods vehicles more than 2 tons but less 3 tons $ per annum $ per annum tare - Goods vehicles more than 3 tons tare $ per annum - Trailers not exceeding ½ ton tare $ per annum - Trailers exceeding ½ ton tare but less than ¾ $ per annum tons tare - Trailers exceeding ¾ tons tare but not exceeding $ per annum 1 ton tare - Trailers exceeding 1 ton tare but less than 1½ $ per annum ton tare - Trailers exceeding 1½ tons tare $ per annum - Tractors less than 2600 pounds tare $ per annum - Tractors more than 2600 pounds tare $ per annum - Hearses $ per annum Passengers motor vehicle: 130

5 TYPE OF TAX TAX BASE - carrying no more than four passengers TAX RATE $ per annum EXEMPTIONS AND DEDUCTIONS excluding the driver - carrying no more than six passengers excluding $ per annum the driver - motor buses less than 2 tons tare licensed to $ per annum carry passengers only - motor buses of 2 tons but less than 3 tons $ per annum licensed to carry passengers only - motor buses more than 3 tons tare licensed to carry passengers only $ per annum Rental motor cycles $ Drivers permit $ Tutors permit $ Learners permit $ Duplicate license or permit $ Temporary drivers permit $ International driving permit $ Registration of change of ownership $ Examination of driver $ Examination of motor vehicle $ Dealers license $2, Taxes on International Trade and Transactions 5.1 Consumption Duties Varying specific or ad valorem rates are applied on a The general rate ranges from 5 to 20 Some basic food items are exempt. These wide range of goods: per cent include: The tax is paid by the importers. Imported goods are - Poultry and turkey, back, neck and valued at c.i.f plus imports duty. wing - milk The tax is also levied on goods produced locally for - cheese and curd domestic consumption. The locally produced goods - rice are valued at the current market price per cent duty waiver for vehicles Basic food: for farmers, senior civil servants, Meat, milk and milk products, cereals Exempt or per cent senior police officers, 131

6 TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS Alcoholic drinks parliamentarians and tour operators. - Beer 40 per cent - Stout 40 per cent - Brandy $12 per gallon - Whiskeys $12 per gallon - Rum $6.25 per gallon - Malt 5 35 per cent - Textile articles 25 per cent - Footwear per cent - Precious metals per cent - Stainless steel per cent - Raw materials for construction 5 35 per cent - Motor vehicles per cent - Medical instruments 5 10 per cent 5.2 Import Duties Imports are subject to the Common External Tariff General rates range 5 20 per cent Member countries may be exempt from of the Eastern Caribbean Common Market. They are import duties, machinery, equipment, applied on the CIF value of imported goods. The tax building materials used in approved is paid by the importer. Other rates are: industry, agriculture, forestry, mining and Special rates tourism. - Live animals 0-40 per cent - Meat and edible meat offal Free- 40 per cent Goods for: - Dairy products Free 40 per cent - Educational and cultural purposes - Edible vegetables, roots and tubers 5 40 per cent - Health - Edible fruits and nuts 5 40 per cent - For government and government - Coffee, tea mate; spices 5 40 per cent purposes - Cereals Free- 30 per cent - For military forces - Animal or vegetable fats and oils 5 40 per cent - For diplomatic missions, - Spirits international organisations and - Beer 35 per cent personnel - Whiskey 30 per cent - In the movement of personal effects - Rum 40 per cent - For approved shipping purposes - Textile and textile articles 0-20 per cent - For use exclusively by an approved - Precious and semi precious stones 5 and 25 per cent airline. - Machinery and machine appliances 0 35 per cent - Medical instruments 5 10 per cent - Clocks and watches 5 and 30 per cent - Musical instruments 10 and 20 per cent - Arms and ammunition 0-35 per cent 5.3 Customs Service Charge Levied on the c.i.f. value on all imports. 4 per cent Diplomats, Mustique Company, Canouan 132

7 TYPE OF TAX TAX BASE TAX RATE EXEMPTIONS AND DEDUCTIONS Resorts Development Limited, Organisation of Eastern Caribbean States, Ottley Hall Development, enclave industries. Imports of the St Vincent Banana Growers Association are also exempt. 5.4 Travel Tax Tax on tickets issued by a carrier for travel outside 5 per cent The following are exempt: St Vincent and The Grenadines for travel originating in the country. - Central Government - Diplomatic Mission - Regional and International Organisations - The governor general and his family - All official travels - Representatives of the un and international organisations - Judges of the OECS - Travel for medical and educational reasons - Children under the age of twelve. 5.6 Cruise Ship Passenger Levied on cruise ship passengers arriving in St. Tax Vincent. - For ships carrying less than 200 passengers $25.00 per passenger - For ships carrying more than 200 passengers $15.00 per passenger 5.7 Embarkation Tax Paid by passengers embarking at airport for external $35.00 flight. 6. Other 6.1 Stamp Duties Payable on a number of transactions including: - bill of sale - bonds - co-partnership documents

8 - customs forms - leases - legacy documents - mortgages.