Business Taxation
CIT | VAT | W/H | PAYE
Business Taxation
CIT | VAT | W/H | PAYE
Business Taxation
CIT | VAT | W/H | PAYE
Slider

Corporate Income Tax (CIT)

Corporate Income Tax Overview
 

Value Added Tax (VAT)

Your Company & VAT
Added Value

As goods and services progress through the production and delivery process extra costs are incurred. These costs include employee wages, transport, storage and other overheads plus profit mark up.

Such expenses or charges represent the Value Added to the goods or services.

How and When VAT Is Charged

VAT is charged when taxable goods are imported or when taxable goods and services are sold or provided.

VAT is added to the selling price of the goods or services. The VAT is, therefore, collected by the seller.

Who Can Charge VAT

No. Only those businesses that are registered for VAT with the Inland Revenue Department (IRD) can charge VAT.

In order to charge VAT, a business must meet a particular Threshold. The threshold is the minimum sales of taxable supplies for a business in one year.

The threshold for Saint Lucia is $400,000.00.

Examples of taxable supplies include:

  • goods for sale
  • commission received
  • commercial rent
  • sales of assets
  • management fees
  • import of service

Withholding Taxes (W/H)

Contract vs Withholding Taxes
Contract or Withholding: Which is It?

Contract tax is levied on income earned from a contractor. A contractor is anyone who is a resident of Saint Lucia who provides or supplies independent personal services in exchange for compensation.

Withholding Tax, while similar to contract tax can encompass a lot more situations. The withholding tax is an income tax that “withheld” from the earning of short-term employees, which is then paid directly to the Department.

Additionally, withholding tax is charged on benefits obtained from pension funds and insurance policies. 10% Withholding tax should be deducted on any cash benefits to members who have withdrawn from an approved pension fund or an insurance policy that is less than ten (10) years old.

Withholding tax is also levied on certain payments of an income nature – e.g. royalties, management charges, commissions, fees – at a rate of 10% to local residents; 15% to regional residents belonging to CARICOM states; and, 25% to non-residents.

Pay As You Earn (PAYE)

PAYE Basics
Paye As You Earn