(a) Every resident individual who is in receipt of income of over $17,400 in any year;

(b) All self-employed individuals, notwithstanding the amount of the income or loss. Individuals in this case include taxi and mini-bus owners or drivers, doctors, mechanics, shopkeepers, vendors, lawyers, hairdressers, shopowners, contractors, etc.;

(c) Every corporation, whether or not a profit is made;

(d) Corporations and Individuals to whom exemption of Tax has been granted under the Fiscal Incentive Act or otherwise;

(e) Partnerships.

Should an income tax return still be submitted if, in any year of income, a small business or a company suffers a loss?

Individuals

A completed and signed registration form should be submitted along with any of he following forms of identification:

Passport, Drivers Licence, National ID, NIC card.

Self-Employed persons

In addtion to the completed registration form and a valid ID as indicated above, a self-employed individual is required to submit a certification of registration for their business.

Partnership

The registration for the partnership signed a partner must be submitted along with:

• Certificate of registration for the partnership;
• National insurance number for each partner.

Companies

The completed registration form signed by a director or the company secretary must accompany:

• the certificate of incorporation;
• a list of employees with their NIC numbers and the date of employment with the company.

The Inland Revenue uses a fully computerised tax system called the Standardised Integrated Government Tax Administration System (SIGTAS). SIGTAS is a fully-networked system running on a modern database. The computerization of operations with the department helped improve the tax administration and ultimately provide better services to the public.

Under the TAN system, all taxpayers have a unique identification number which must be used when transacting business with the Inland Revenue Department, as well as the Customs Department.

The TAN will:

1. Create and maintain accurate files for taxpayers;
2. Eliminate the duplication of information on taxpayers within the department.

ALL TAXPAYERS doing business witht the Revenue Departments need a TAN.

Taxpayers (Individuals, Partnerships and Companies) are required to register and receive a TAN by completing the relevant registration forms.

The most frequent ones are Income Tax Returns without:

(a) Tax Account Numbers
(b) Addresses
(c) Signatures
(d) Complete or correctly filled information
(e) Certificates of renumeration and PAYE deductions
(f) The relevant supporting documents, as indicated in the instructions accompanying the Income Tax Return form

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I understand that there is a 5% late filing penalty but I am unable to meet the filing deadline. What can I do to avoid this penalty?

No. The employer has no authority to deduct less PAYE from the emolument of an employee, even if asked to do so by the employee. The employer must deduct the amount arrived at by using the information on the Code Form and the Tax Deduction Tables. Should the employer deduct less tax he shall be liable to a penalty which will be inclusive of interest.

An overpayment of PAYE by an employee would be refunded when the Income Tax Return for that income year is filed and processed.

A deduction of $5,000 is allowable provided that the individual, irrespective of age, was receiving full time tuition at a University whether in St. Lucia or elsewhere during the income year. This also includes an institution whcih provides technical or professional education equivalent to a University standard, for example, A Polytechnic or the Univeristy Division of the Sir Arthur Lewis Community College. It must be noted that proof that your relative has attended the University and was supported by you is required by the Department.

NB: Students who are pursuing Advanced Level or Technical Studies at the Sir Arthur Lewis Community College are not entitled to the deduction of $5,000.

Some Associate Degree Programmes do qualify for Higher Education Allowance of $5,000. They are as follows:-

Social Sciences and Natural Sciences
Arts & Science
Arts, Science and Applied Science
Computer Science
Mass Communications
Science
Business Studies
Agriculture
Banking

The entire amount is allowable if no part of it was reimbursed. However, if the Insurance Company reimbursed part of the total, then the reimbursed amount will be deducted from the total amount of the bills and the balance will be allowed as a deduction.

Only medical claims from registered practitioners will be acknowledged

Yes. Premiums paid to a company in respect of a policy effected after 1972, with a company not doing business in St. Lucia are allowable as a deduction. The amount allowable however is 50% of the premium paid to the company. The deduction is limited to the higher of:

(I) One twentieth of your assessable income or
(II) $3,000

The Tax Law grants relief to a taxpayer who has taken a loan to acquire a dwelling house which is occupied by himself either alone, or together with his family, or occupied rent free by members of his family. This relief is also in respect of any rates, taxes, insurance premiums and expenses reasonably incurred in the upkeep and maintenance of the house.

In circumstances where for economic or the reasons you have taken over the mortgage on your parent's house the Department will allow you to claim the expenses on sufficient proof that your parent's house is your principal place of residence.

Interest on a loan for the acquisition or construction of or improvements to an owner occupied dwelling house is allowable up to a maximum of $15,000. The interest claimed must be substantiated by a statement from the lending institution indicating the purpose of the loan and interest paid during the income year.

Yes. You are entitled to a deduction not exceeding six thousand dollars $6,000 for payments made under a Registered Home Ownership Savings Plan.

This deduction can only be claimed by a resident individual who has not previously owned a home in St. Lucia.

Yes. A resident individual is entitled to deduction of a maximum of three thousand dollars ($3,000) in respect of any amount paid during the year of income by way of interest on money borrowed to finance his/her tertiary education.

In the event that the loan has been repaid by a relative, the interest can ONLY be claimed as a deduction by the STUDENT. However, the relative may claim a the HIGHER EDUCATION ALLOWANCE of $5,000 in respect of that child.

I paid premiums for the year of $750 towards a Medical policy, however, during the year I paid medical bills of $1,500 and was only reimbursed $500. Am I still entitled to a deduction and if so how much?

Yes. You are entitled to the difference of the total medical bills paid and the reimbursed amount. This difference will then be added to your total premium paid for the year.

In the example given, the calculation will be as follows:-

Total medical premiums paid $ 750
Total medical bills paid $1,500
Total reimbursed (500)
Amount not reimbursed 1,000
Amount allowed as a deduction $1,750

No. This claim will only be allowed if the contribution is made under a deed of covenant for a period not less than three years.

It must be noted that the amount allowable is restricted to twenty-five percent (25%) of your assessable income for the year in question.

Claims can be made against the total income for expenses which were wholly and exclusively incurred in the production of such income. Some of these claims are are follows:-

(i) Salaries & Wages
(ii) Stationery/Postage
(iii) Advertising
(iv) Repairs
(v) Rates & Taxes applicable to the busiess
(vi) Bad Debts
(vii) Motor Vehicle operating expenses applicable to the business
(viii) Utilities & Telephone
(ix) Rent on business property
(x) Employers contribution to Social Security
(xi) Bank Interest & Charges
(xii) Legal & Professional Fees

It should be noted that where the expenses relate to both private and business use the amount should be apportioned accordingly.

Yes. Income earned by an individual from fishing or agriculture is exempt. This includes horticulture, the use of land for husbandry including the keeping of livestock or poultry or the growing of crops, fruits or vegetables.

It must be noted that losses from exempt income cannot be set off against any other source of income or activity.

There are set rates specified by the Income Tax Act. By these claims for Wear & Tear the cost of the asset for use in the business is written off (using the reducing balance method) over a period of time. The basic rates are as follows:-

Motor Vehicles 25%
Furniture 15%
Office Equipment 15%

To illustrate:

Suppose a motor vehicle was purchased for $10,000. The calculation of allowances in the year of acquisition is as follows:-

Cost of Vehicle $10,000

Initial Allowance - 20% 2,000
Annual Allowance - 25% 2,500
Total Allowance 4,500
Written Down Value $ 5,500

Subsequent annual allowances are calculated on the written down value.

You are entitled to claim an initial allowance in the year of acquisition.

A list of all assets and applicables can be obtained from the Inland Revenue Department upon request.

Yes. This is considered to be a taxable benefit and the amount must be included as part of your employment income. The benefit is calculated as follows:-

In the case where the vehicle is purchased locally:

- 15% of the listed selling price of the vehicle

Imported into the country directly or indirectly by your employer.

- 15% of the landed cost of motor vehicle plus all local charges
i.e. 15% (landed costs + local charges)

Should the vehicle be leased, the benefit is calculated as:
40% of the leased cost to the employer.

Personal Allowance 16,000
Spouse Allowance 1,500
Child under 16 years 1,000
Child Education (student over ten years) 2,000
Higher Education Deduction 5,000
Housekeeper 200
Dependent Relative 350
Medical Expenses 400 (minimum)
Life Insurance plus 1/10 of assessable income
National & Insurance Scheme Contributions or $8,000.00 - Limit
Mortgage Interest 15,000 (maximum)
Deed of Covenant - Religious }
Charitable Medical Educational } 25% of assessable income
Sporting Body }
Credit Union/Co-operative Shares 5,000 (maximum)
Student Loan Interest 3,000 (maximum)
Registered Home Ownership Savings Plan 6,000 (maximum)
Solar Water Heater 6,500 (maximum)
Shares in a Public Company 5,000 (maximum)

INCOME TAX RATES

On the Chargeable Income of every individual, unincorporated body of persons or trustee:-

On the first $10,000 10%
On the next $10,000 viz. 10,001 - 20,000 15%
On the next $10,000 viz. 20,001 - 30,000 20%
On the remainder 30%

On the Chargeable Income, on every dollar thereof, of:-

(a) Companies 33 1/3%
(b) New small business enterprises
(Prior to income year 2001):

(i) for the first income year 25%
(ii) for the second income year 30%
(iii) for the third and subsequent years 33 1/3%

From Income Year 2001 - 2005 10%

PENALTIES FOR INFRINGEMENT OF THE TAX LAWS

Failure to file an Income Tax Return:

The Inland Revenue Department shall impose a penalty not exceeding 5 percent (5%) of tax charged where a taxpayer does not file an Income Tax Return within the prescribed time or any extended time granted. [Section 120]

Failure to produce Books & Records:

If the Inland Revenue Department requests a taxpayer to produce books and records and he does not comply, a penalty not exceeding five hundred dollars shall be imposed, he can, on summary conviction, be fined one thousand dollars ($1,000) and can be imprisoned for one year. [Section 124/128]

False statements, Declarations or Records:

Any person who knowingly gives false information to the Inland Revenue Department or who wilfully seeks to evade assessment or liability to tax is quilty of an offense, and can, on summary conviction be fined two thousand dollars ($2,000) or imprisioned for two years. [Section 129]

Failure to Deduct Tax:

Inland Revenue shall impose a penalty of ten percent of the tax which should bee deducted, where a taxpayer fails to deduct or account for tax which should have been deducted. This is in addition to any interest charges which have accrued. [Section 122]

Failure to Deduct Withholding Tax & Tax from Payments to Contractors:

Any person who fails to deduct withholding tax or tax from a payment to a contractor is guilty of an offence and can on summary conviction, be fined one thousand dollars ($1,000) or imprisonment for one year. [Section 130]
Failure to Furnish Correct Return of Income:

Where any person fails to furnish a correct return of income for any year of income by reason of:

A. his failure to disclose any assessable income accrued to him from any source;

B. the deduction or set off by him of any amount which is not allowable as a deduction or set off;

C. the claim by him of an expenditure or loss of an amount which was not expended or lost; or

D. his failure to disclose any fact, the disclosire of which would result in an increase in his ability to tax,

He shall be liable to a penalty in accordance with the following paragraphs.

Where the incorrectness of the return of income or the information was attributable to:

A. neglect or carelessness, he shall be liable to a penalty not exceeding the amount of tax which would have been lost if he had been assessed on the basis of the incorrect return or information furnished by him; or

B. fraud or wilful default, he shall be liable to a penalty not exceeding twice the amount of tax which would have been lost if he had been assessed on the basis of the incorrect return or information furnished by him.

If, for any year of income, determination of chargeable income of any person results in as assessed loss, and the amount of such a loss is less than it would have been if it had been calculated on the basis of the return of income or information furnished by him by reason of any of the circumstances specified in subsection (1) and such incorrectness of the specified in information was due to neglect, carelessness, fraud or wilful default, he shall be liable to a penalty not exceeding ten percent of the difference between those amounts. [Section 120]

Failure to Pay Tax by Due Date:

Inland Revenue shall impose a penalty of ten percent (10%) of the tax which is due, where a taxpayer fails to pay the whole or part of an instalment of tax which is due, or the balance of any tax to which he is liable. This is in addition to any interest charges which have accrued. [Section 122]

Failure to comply with notice to give information produce documents or give evidence to the Comptroller:

Any persons who fail to comply within a specified period of time with a notice issued by the Inland Revenue Department to produce books of accounts, or documents, furnish returns or information of behalf of himself or any other person shall be liable to a penalty not exceeding five hundred dollars ($500.00). [Section 124]

To contribute to the consolidated fund so that the Government can provide services such as Garbage Collection, Street Lighting, Road Maintenance, Salaries etc.

According to the Land & House Tax Ordinance Ch. 217 revised laws of St. Lucia that is the basis used for determining the value of property of which the rate of taxes is determined by law.

Taxes are due and payable within thirty days of the date of the notice of assessment.

Exemptions are granted on application, after all the relevant facts have been considered. The Department will then officially inform persons who have been granted an exemption.

We do enter the property to carry out the assessment but assess is limited to the external areas only.

You can, once it has been established that you do have a refund.

It is recorded as a debt against the property for which first would incur penalties and interest then if the home owner does not comply, a judgment would be placed against the said property.

The Land & House Tax Ordinance Ch. 217 revised laws of St. Lucia states that within 30 days of becoming a homeowner one should declare his/her property to The Inland Revenue Department.

The Property Tax Unit of the Inland Revenue Department is responsible for assessing all residential properties in St. Lucia.

You should put your objections in writing and submit it to the Comptroller of the Inland Revenue Department before your 30-day period has expired.

Yes because the taxes are applied to either Land or House.

Every person paying emoluments, whether on his own account or on behalf of any other person herein referred to as an employer, must take deductions from such payments.

Pay is the employee’s earnings for the pay period, including the value of free board and lodging or any other perquisite including house allowance and entertainment, bonus, commission, overtime, director’s fee or any other benefits including any taxes paid by the employer on the employee’s behalf or allowances LESS any sum deducted by the employer in respect of contributions paid by the employee to an approved pension fund or scheme.

Doubtful cases should be referred to the Inland Revenue Department.

The following should be treated as pay for taxation purposes: -

(a) Benefits under the Workmen’s Compensation act.

(b) Payments of or contributions by the employer towards expenses that were actually incurred by the employee in performing the duties of his employment

(c) Any salary, fees or share of profits which can be taken into account in computing the gains or profits from a trade, profession or vocation.
If any employer is doubtful whether a particular payment should be treated as pay for tax deduction purposes, he should contact the Inland Revenue Department.

Crediting pay to an employee’s bank account constitutes “Payment” in the same way as payment in cash and tax should be deducted accordingly. The same positions applies if the amount is credited to an account with the employer on which the employee is free to draw or is applied in reduction of a debt due to him to the employer, unless the debt arises from a payment in advance or on account of remuneration from which tax was deducted.

In certain circumstances, pay may be credited to an employee in some special way which makes it doubtful whether the “Pay” has actually been “Paid”. When there is any such doubt the matter should be referred to the Inland Revenue Department

Every Employee is required to file a declaration on TDForm A4-1 certifying the amount of allowances claimed. In the event an employee has not obtained a code number from the Inland Revenue Department use the personal allowances plus medical of 400.

Eg Income year 2002 personal allowance - 14000. Tax code = (14000 + 400) = 14400

Use 144M for Monthly, 144F for Fortnightly or 144W for Weekly.

1. For persons just joining your organization

2. If the person starts in January use the whole year calculation screen

3. If the person starts during the year use the other than whole year calculation.

4. If the person can provide you with total salary, Nis and tax deduction from previous employer for the same income year then use the change in salary screen.

5. For persons who change their tax code or receive a change in salary without a bonus, or gratuity or retroactive pay. Use the salary change and tax code screen.

6. For persons receiving a bonus, gratuity or retroactive pay use the retroactive pay screen.

7. For Non resident Use the Non resident screen.

Note Nis should not be deducted from the current salary when entering it in the program. Eg if employee salary is 2500 then enter the full amount and the system will calculate the Nis deduction.

Tax deductions withheld from employees are trust funds in the hands of the employer until remitted to the Comptroller, the amount deducted in one month must be forwarded to the Comptroller of Inland Revenue on or before the fifteenth of the following month. The appropriate remittance form must be used for this purpose.

An employer failing to remit by the due date is liable for the amount deducted plus a penalty of 10% of the amount deducted and interest of 1% per month above the prevailing market rate of interest.

On making any payment of emoluments to an employee whose emoluments tax is deducted, the employer, unless exempted by the Comptroller, must furnish each employee with the particulars of the payment including particulars of the gross emoluments for the pay period and the amount of tax deducted therefrom. Any exemption granted by the Comptroller may at any time be revoked. Every employer must keep, to the satisfaction of the comptroller, a record of the emoluments paid to and the tax deducted from each employee.

Where wage earners are employed on the gang or squad system the responsibility for the correct deduction of tax rests with the employer, i.e. the employer of the gang leader. The employer should ascertain from the gang leader what wages are due to each employee so that: -

(a) He (the employer) can deduct the correct tax

(b) Deliver to each employee in January a certificate of wage and tax deducted, and

(c) Send two copies to the comptroller

Where there is any doubt the matter should be referred to the Inland Revenue Department.

IF THE GANG LEADER IS NOT AN EMPLOYEE THEN THE GANG LEADER IS THE EMPLOYER, and he is responsible for the correct deduction of tax, the accounting each month to the revenue and for supplying the required certificate. It would assist the Inland Revenue Department if the names of such gang leaders would be reported so that they may receive the appropriate forms.