Tax Law


Corporation Tax


Who is subject to Corporation Tax?
Corporation tax shall be payable on the chargeable profits of any company accruing in or derived from T&T and whether received in T&T or not.

Taxes applicable

  • Corporation tax (CT) - see definition above
  • Business Levy (BL) - A tax known as business levy shall be payable on the gross receipts of a company for each year of income except the three years following the commencement of the business. BL is payable by companies subject to Corporation Tax
  • Green Fund Levy (GFL) - A tax levied on the gross receipts of a company for each year of income.
  • Withholding Tax (WHT) - A tax levied on distributions and/or payments made to non-resident companies and individuals

The following are the taxes applicable to companies to whom the Petroleum Taxes Act (PTA) applies:

  • Petroleum Profits Tax (PPT) - A tax chargeable on the taxable profits of business carried on in certain petroleum operations
  • Supplemental Petroleum Tax (SPT) - A tax chargeable on gross income and deductible in determining a company’s taxable profits
  • Unemployment Levy (UL) - A levy imposed for the purpose of the relief of unemployment and the training of unemployed persons

Rates of taxes - see Tax Rates below

  • Withholding Tax - Relief could be obtained if there is a Double Taxation Treaty (DTT - see Cross Border Taxation) available with the country of the individual/company
  • Supplemental Petroleum Tax - This is calculated separately for land operations and marine operations determined by factors including the price, the land/marine area and the year in which the license was granted

Allowable deductions and additional allowances - see Tax Rates below

Dates of payment and filing

  • CT, BL, GFL, PPT, SPT and UL- quarterly installments i.e. March 31st, June 30th, September 30th, December 31st
  • Withholding Tax - to be paid within 30 days of the payment or distribution being made
  • Balance of tax - This is the taxes payable as at April 30th in the year following the year of income where total taxes paid as at December 31 of the year of income is less than the total tax liability for the said year of income.
  • Tax returns should be filed by April 30th in the year following the year of income. A six month grace period is allowed (October 31st).

Interest and penalty on late payment

  • CT, BL, GFL, PPT, SPT, UL - 20% interest per annum
  • A penalty of $1,000 will accrue for every six months or part thereof for late filing (commencing after the six month grace period)

Cross Border Taxation / Double Taxation Relief


Throughout the Commonwealth Caribbean there is "a distinct lack of uniformity and similarity in the approaches taken by the various taxing statutes.'

There exists Double Taxation Treaties between Trinidad and Tobago and various countries, as listed below, for the purposes of obtaining relief from double taxation and for the prevention of fiscal evasion on income tax and tax of a similar character, profits or gains and capital gains.

Countries with which Trinidad and Tobago have a Double Taxation Treaty:

  • The Double Taxation Relief (CARICOM) Order, 1994
    Member States which include the following:
    • Antigua and Barbuda
    • Barbados
    • Belize
    • Dominica
    • Grenada
    • Guyana
    • Jamaica
    • Montserrat
    • St. Kitts and Nevis
    • St. Lucia
    • St. Vincent and the Grenadines
    • Trinidad and Tobago
  • The Double Taxation Relief (Canada) Order, 1996
  • The Double Taxation Relief (China) Order, 2004
  • The Double Taxation Relief (Denmark) Order, 1969
  • The Double Taxation Relief (France) Order, 1981
  • The Double Taxation Relief (Federal Republic of Germany) Order, 1976
  • The Double Taxation Relief (India) Order, 1999
  • The Double Taxation Relief (Italy) Order, 1971
  • The Double Taxation Relief (Luxembourg) Order, 2001
  • The Double Taxation Relief (Norway) Order, 1969
  • The Double Taxation Relief (Sweden) Order, 1984
  • The Double Taxation Relief (Switzerland) Order, 1973
  • The Double Taxation Relief (United Kingdom) Order, 1983
  • The Double Taxation Relief (United States of America) Order, 1971
  • The Tax Information (Declared Agreement) Order, 1990
  • The Double Taxation Relief (Venezuela) Order, 1999
  • The Puerto Rico Section 936 Funds Order, 1990

International/Offshore Business

Gittens, Smart & Co. also provides services for those that are interested in Off Shore structures and facilities utilizing the St. Lucia and Barbados Offshore Jurisdictions.

Partnership Tax


What is a partnership and who is subject to tax under a partnership?

A trade, business, profession or vocation undertaken jointly by two or more persons where profits are shared through a partnership are subject to this type of taxation. Profits are shared according to the partnership (ascertained in accordance with the Income Tax Act) and included in the return of income, subject to tax under the Income Tax Act.

Taxes applicable

Income Tax - quarterly payments of tax calculated on the partner’s share of income.

Rates of taxes - see Tax Rates below

Dates of payment and filing

  • Quarterly taxes - March 31st, June 30th, September 30th, December 31st
  • Tax returns should be filed through 1B form by April 30th in the year following the year of income. A six month grace period is allowed (October 31st).

Note: The precedent partner is required to make and deliver a return of the income of the partnership showing the chargeable income of the business along with the name and addresses of each partner with the entitled share of income for the year of income. Payment of taxes is paid by each individual based on the share of income received.

Interest and penalty on late payment

  • Quarterly - 20% interest per year
  • A penalty of $100 will accrue for every six months or part thereof for late filing (commencing after the six month grace period)

Personal / Individual Tax


Who is subject to Income Tax?

Income tax shall be payable upon the income of any person accruing in or derived from T&T, whether received in T&T or not.

Taxes applicable

  • Quarterly payments of tax calculated on an individual’s chargeable income i.e. income not arising from emolument income
  • Pay As You Earn (PAYE) to be withheld and paid to the Board by employers and calculated on the employee’s emolument income
  • National Insurance applicable to employees but voluntary for individuals
  • Health Surcharge payable by all employed persons paying NIS and persons required to file a return (not applicable to persons having not attained the age of 16 and having attained the age of 60). Calculated as follows:

General rates of taxes - see Tax Rates below

Allowable deductions and additional allowances - see Tax Rates below

Dates of payment and filing

  • Quarterly taxes - March 31st, June 30th, September 30th, December 31st
  • PAYE, National Insurance and Health Surcharge - 15th day following the month in which emolument income was earned
  • Balance of tax - This is the taxes payable as at April 30th in the year following the year of income where total taxes paid as at December 31 of the year of income is less than the total tax liability for the said year of income
  • Tax returns should be filed by April 30th in the year following the year of income. A six month grace period is allowed (October 31st)

Interest and penalty on late payment

  • Quarterly - 20% interest per year
  • PAYE - 25% penalty and 20% interest on the sum of the principal and penalty
  • National Insurance - 25% penalty and 15% interest. Interest accrues one month after the month in which NIS was payable i.e. if both the principal and penalty are outstanding one month after the due date for principal, interest will accrue on the sum of the principal and penalty
  • Health Surcharge - 25% penalty and 20% interest on the sum of the principal and penalty
  • A penalty of $100 will accrue for every six months or part thereof for late filing (commencing after the six month grace period)

Note: Where the tax liability disclosed in the return for the year of income of an individual exceeds the quarterly payments made for that year of income, interest is charged on the difference between:

  • the tax liability on the chargeable income for the previous year of income plus 80% of the increase in tax liability of the current year of income on the previous year of income; and
  • the total amount paid by the end of the fourth quarter

Value Added Tax


Value Added Tax Act 1989
This Act provides for the imposition and collection of value added tax on approved goods and services. The Act also outlines the goods and services which will be considered zero-rated and exempt from value added tax.

VAT returns and payments are to be submitted within 25 days following the VAT period to which it relates. The tax period for VAT is determined as specified by the Board and may be amended at the discretion of the Board. Currently the VAT period is two months long. Therefore, there are six VAT periods in a year with payment due on the 25th day of the month following the period.

Services exempt from VAT are outlined in Schedule 1 of the VAT Act. Whereas with zero-rated goods and services VAT is attached at a rate of nil. Schedule 2 of the VAT Act lists items to which a zero-rating applies.

A Foreign Company that conducts business in Trinidad & Tobago and qualifies for VAT registration must register as an External Company {See Company Law page} before it can be VAT registered.

The Trinidad & Tobago Inland Revenue Division Website provides information on the registration for VAT and other related topics. http://www.ird.gov.tt

Other Tax


Other Acts

  • Tourism Development Act 2000: An Act focusing on the development and promotion of tourism in Trinidad and Tobago in keeping with national objectives, providing tax benefits.
  • Income Tax (Reduction of WHT) Order 1970: This is applicable to selected countries, as outlined in the Act, reducing WHT on dividends and other distributions to nil.
  • Income Tax (Miscellaneous Clearance) Regulations - An Act in force to ensure that all persons leaving or attempting to leave Trinidad and Tobago obtains an Exit Certificate before doing such.
  • Fiscal Incentives Act (24 September 1973) - An Act providing tax benefits to companies with heavy investments. A company to which this Act applies is determined by the government.
  • Free Zones Act - An Act that governs what determines who should qualify as a Free Zones enterprise and the benefits to be derived from operating within a Free Zones Area.
    Advantages:
    Total exemption from customs duties on capital goods, spare parts, raw materials, etc., for use in the construction and equipping of the premises and in connection with the approved activity
    • No import or Export Licensing requirements
    • No Land and Building Taxes
    • No Fees for Work Permits
    • No property ownership restrictions
    • No income, corporation or withholding taxes or levies on sales or profits of approved Free Zone Enterprises
    • No VAT on goods supplied to a Free Zone
    • No foreign currency restrictions or capital gains taxes
    • Availability of a highly skilled and productive work force
    • Expeditious, efficient customs procedures

Expatriate Tax

Numerous Expatriates work in Trinidad and Tobago. Many of them of employed by large multinational corporations who deal with their tax planning, return remittance and payment. However, there are many Expatriates who work as consultants and do not have tax support. Gittens, Smart & Co. provides such services. We have Expatriate tax experience and we are able to prepare tax returns (US, CDN and T&T), estimate liability and installments and provide local tax planning advice.

Tax Rates


Personal / Partnership Income Tax

Rate of Tax 25%
Personal Allowance $60,000
Deductible
Expenses / Allowances

Contribution to Approved: Pension / Retirement Fund Deferred Annuity / 70% NIS contribution $25,000
Tertiary Education Expenses $60,000 / household
First Time Home Owner Allowance $10,000
Maintenance or Alimony Amount Paid
Benefits in Kind
Motor Vehicles / Equipment 50% of Wear & Tear and 50% of Rental
Company Owned Housing Fair Rental Value
Low Interest Load Difference in CBTT repo rate & rate charged
Others Cost to Employer
Exemptions
Severance / Gratuity / Retirement Payments $300,000
Tax Free Plan - Section 134(6) 20% of Emoluments or 1/3 Chargeable Income

Corporation Tax

Basic Rate 25%
Petrochemical Companies 35%
Approved Small Company
(for 5 years commencing January 1, 2006)
0%
Business Levy:
Gross Sales or Receipts
(Higher of Corporation Tax or Business Levy)
0.20%
Green Fund Levy:
Gross Sales or Receipts
(Exempt Income to be included)
0.10%
Withholding Tax
Dividends / Distributions 10%
Distributions parent company 5%
All other payments whether made to individuals or companies 15%
Unemployment Levy 5%
Tax Allowances
Promotional Expense Uplift 150%
Scholarships 100%
Audio, Visual & Video Productions * 100%
Art & Culture * 100%
Sports & Sportsmen * 100%
Donations under Deed of Covenant <= 15%
* Cumulative amounts capped at $1,000,000

Capital Allowances

Manufacturing Trades:
Initial Allowance - Plant & Machinery 75%
Wear & Tear Allowance:
Industrial Buildings 10%
Buildings & Improvements on or after 01/01/95 10%
Office Equipment 10% or 25%
Fixtures & Fittings 10%
Plant & Machinery 25%
Motor Verhicles
(no restrictions on cost)
25%
Computers & Heavy Equipment
(including rigs)
33.3%
Aircrafts 40%

Value Added Tax

Goods & Services 15%
Registration Threshold Commercial Supplies > $200,000 for a 12 month period
Zero-rated Goods & Services:
(See VAT)

Exempt Services:
(See VAT)
  • Financial Services
  • Rental of Residential Property
  • Medical Services
  • Training & Education
  • Real Estate Brokerage
  • Bus and Taxi Services
  • Hotel Accom > 30 days
  • Public Postal Services
  • Lottery
  • Services supplied by a person not resident in Trinidad and Tobago

The material contained in this site provides general information on the laws of Trinidad and Tobago. Nothing in this site constitutes legal advice. Furthermore, we have no control over the websites to which we provide links to and are in no way responsible for their contents.
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