St. Lucia is one of the most stunningly beautiful islands in the Caribbean. The nation is one of the hottest tourist attractions in the region and is renowned for its luxurious resorts, high-end yacht marinas, and laid-back lifestyle.
Another thing St. Lucia is quite famous for is its prominent citizenship by investment program. The program, which grants investors citizenship when they invest in government-listed ventures in property or a fund, has garnered demand from all around the globe; as investors continue to act quickly to become St. Lucians.
While many view the heightened global mobility of the Saint Lucia passport as a main attraction, many should consider its tax regime, as it may be quite favorable when compared with the one from their original country and be prove to be a financial masterstroke.
In this piece, we will be covering the basics of all you need to know about tax in St. Lucia and how it can benefit you and allow you to obtain financial freedom in terms of taxation.
Saint Lucia is a nation governed by common law, and while it is not technically a tax having like the Cayman Islands, for example, it still boasts a favorable tax regime for persons, companies, property, and more.
St. Lucia does not impose any capital gains, inheritance, or withholding tax, and the inland revenue department, which oversees taxation within the nation, has streamlined the tax returns filing process to make it easy for residents and non-resident citizens alike.
St. Lucia does not impose worldwide personal income tax for international non-residents like the USA does, but does impose income tax on those residing within it.
Both persons and registered companies are subject to personal income and corporate income tax in St. Lucia.
An individual residing in St. Lucia as a tax resident is taxed on all income generated within the nation as well as foreign income brought into the nation during their residency period. The income tax rate is calculated on a scaled bracket meter, with the value of taxes increasing as the value of income increases.
The minimum taxable financial income is set at 18,000 XCD, and any financial income above that is taxable as per the scaled bracket system shown below:
An individual must file their taxes on an annual basis through the inland revenue department’s website to ensure they have no outstanding taxes on their income or otherwise, as income tax is levied on an annual basis. Tardiness in filing tax records and documents can result in a hefty fee.
People are not subject to wealth or withholding tax, and the main tax rate they must concern themselves with in terms of filing returns is the tax rate related to their annual income. There is also no capital gains tax on persons as well, so there are no tax returns that must be filed in that regards either.
People living in the country who generate income from international business are only taxed on that income if it is entered into St. Lucia. If someone is a resident and has income from international business generated outside of St. Lucia and that is not transferred to the Caribbean nation, then there is no tax applicable there.
Corporate tax is much more straightforward, as a company is taxed at a flat rate of 30%. This rate applies for all types of income from any sources from within Saint Lucia, and resident companies must file their taxes on an annual basis.
International business companies incorporated after the 1st of January of 2019 who elect to pay a 1% tax are not required to pay any taxes on income generated from foreign sources outside of the nation.
Non-resident companies are liable for corporate tax on local income and interest, are taxable at a flat rate of 25% withholding tax, while a withholding tax rate of 15% applies to interest. Companies are not subject to capital gains tax.
Any company must also consider other taxes such as stamp tax or tourism levies. A company with employees must consider payroll tax and social security contributions, although the latter is not a tax but it is important any company wanting to maintain its capital and do business should consider it along with any other payable or required fee.
Corporate income tax is average in Saint Lucia in comparison with the average of the world’s countries, and this makes investment in the country of Saint Lucia, be it in global business, passive ventures through capital investment, property or real estate rentals, or just opening a company with small capital that operates within the Caribbean country a great venture.
Saint Lucia has a flat rate of value-added tax (VAT) of 12.5% that is levied on most goods and services in the country. There are, of course, some exceptions that certain companies, goods, or services fall under. Businesses that earn less than the minimum threshold of 400,000 XCD do not have to register for VAT, but companies that exceed the amount must ensure registration for VAT.
The hotel sector and all related service providers are taxable at a reduced rate of only 7%, this new law was introduced in December of 2020 to encourage the tourism sector on a national scale.
Some goods that are currently exempt from VAT altogether are not liable to pay anything, these exempt goods are:
The St. Lucian authority has also created a list of national supplies and services that are exempt from VAT for an indefinite period, these are:
Goods and services in these sectors are also exempt and do not need to register for VAT.
If you register a property in your name in the country then the laws and taxation act state that you will be liable for property tax just like in the vast majority of countries in the world. The system in the Caribbean nation asserts that residential and commercial property have differing rates of property tax.
Residential property is subject to a meager 0.25% of their fair market value tax, while commercial property is subject to a 0.4% rate, making them extremely viable. Property tax is levied on an annual basis and must be filed to the inland revenue department through the website or in person. Once registration of the property is complete a person will have to make sure it is also registered for taxation purposes to ensure its legal standing.
There is stamp tax, which is charged on documents and records that evidence legal or contractual exchange of services or exchange of goods between two or more parties. Rates for stamp tax differ depending on the instrument being sold. This is a global practice and a company that wishes to file legal documentation with the authorities must pay stamp tax on the necessary instruments.
The rates for registered stamp duty vary between 2% and 10% depending on the instrument.
The nation has one double taxation treaty in place with the CARICOM nations, these nations are:
Saint Lucia’s citizenship by investment program is a cost-effective way to obtain citizenship and a passport that provides you with visa free travel to over 145 destinations worldwide. It is also a step in obtaining financial freedom and a favorable tax regime with no withholding, wealth, or capital gains tax.
The program is simple, choose an investment in one of these options:
While not technically listed as tax-haven per se, it does impose a favorable tax regime in comparison to the global average.
Income tax is only imposed on residents of the country, non-residents are not taxed on income generated internationally.
Tax residents (living more than six months per year in the nation) who obtain income from within or outside the country are taxed.
Yes, residential property is taxed at 0.25% while commercial property is taxed at 0.4% annually.