Personal Income Tax
The IRD imposes a personal income tax on the income after allowances and deductions of residents and non-residents earning income in St. Lucia. This tax is levied only on income over $18,400 per annum received by resident or non-resident individuals who earn income in St. Lucia, whether those income sources are located in or out of St. Lucia.
A tax return must be filed by individual taxpayers by the due date for filing income tax returns. The due date for filing income tax returns for individuals is 31st March of each year. There is a penalty charged for late submissions, this is 5% on chargeable income. “Chargeable Income,” for the purposes of Income Tax, means the aggregate or total amount of income of any person that is remaining after the appropriate deductions and allowances have been allowed.
Corporate Income Tax
Corporate tax is levied on all income received by a corporation from sources in and out of St. Lucia. The due date for submission of income tax returns for Corporations is three months after the end of their financial year.
The residence of a company for tax purposes is determined by the country in which it is managed and controlled. Corporation tax is chargeable on all the profits of a resident company. Profits that accrue directly or indirectly to a non-resident company carrying on a business through a permanent establishment in St. Lucia are subject to corporation tax at 33.3%. Where income accrues to a non-resident company from a source other than from the carrying on of business through a permanent establishment in St. Lucia, the gross amount of such income is liable to withholding tax at 25%.
Pay As You Earn
The Pay-As-You-Earn System, popularly referred to as PAYE, was introduced in St. Lucia in 1965. The legislation dealing with its operation is contained in the Fourth Schedule of the Income Tax Act Chap. 15.02, as well as sections 75, 76, 77, 78 and 143.
With the Pay As You Earn (PAYE) system, money is deducted from paychecks by the employer and remitted to the Government with regular paychecks as they are earned. Any sum taken in excess of the amount of tax due it repaid to the taxpayer. If there is a shortfall between how much tax was paid and how much was actually due, the taxpayer will have to make up the difference once they file their annual Income Tax Return. PAYE is not a method of assessment of income tax, but merely a system of deducting tax from earnings as they are paid. Therefore, although tax has been deducted by way of PAYE from emoluments (earnings), an employee must, nevertheless, file an Income Tax Return.
“Emoluments” means all salary, wages, bonus, overtime, perquisites or privileges which include house allowance and entertainment, commission or other amounts for services, director’s fees, pensions arising or accruing in, derived from or received in St. Lucia, and which is liable to income tax.
This does not include, however, salary or share of profits arising from a trade, profession or vocation carried on by any person either by himself or in partnership with another person.
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. A contractor is not considered an employee and is also not any of the following:
• accountants, auditors or tax consultants
• business or management consultants
• doctors, dentists, pharmacists or nurses
• funeral undertaking services
Contract tax is levied on payments made to a contractor either directly or indirectly through a financial institution for the supply of labour or for the hiring of equipment.
The withholding tax is an income tax “withheld” from the earning of 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.
Tax on Residential Property
Property tax is paid on property owned by an individual or other legal entity for either residential or commercial purposes. Currently, residential property tax is an ad-valorem tax, which is proportionate to the estimated market value of the residential property. The tax is usually based on the value of the owned dwelling, in addition to the land. Land without an habitable structure is not taxable. To find out more on Residential Property Tax, visit its page HERE
Tax on Commercial Property
Property tax is paid on property owned by an individual or other legal entity for either residential or commercial purposes. Currently, residential property tax is an ad-valorem tax, which is proportionate to the estimated market value of the residential property. The tax is usually based on the value of the owned commercial structure, in addition to the land. Land without an habitable structure is not taxable. To find out more on Commercial Property Tax, visit its page HERE
Domestic Sales Taxes
Stamp duty is a tax that is levied on documents. Historically, this included the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions, which would be affixed with a legal stamp.In accordance with the Stamp Duty Ordinance some documents still require stamping. Among these, include:
• Deeds of Conveyance
• Deeds of gift
• Deeds of Mortgage
• Mortgage Loan agreements
• Life Insurance Policies
• Powers of Attorney
• Transfer of Shares
• Deeds of Lease
• Deeds of any other kind
Stamp duty is also a tax that is imposed on every instrument which may be declared by the Stamp Duty Ordinance to be liable to stamp duty
Telecommunications Class Licence
This licence fee, whether initial, annual or a renewal, is payable by a person for a "licence" or a "frequency authorization."
- The initial fee is payable within two weeks of the licence having been approved, and informed (in writing) of the grant of that licence.
- The annual fee is payable on the anniversary date of the grant of the licence or frequency authorization.