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Tax Residency in St. Kitts and Nevis: Freedom for Your Wealth

05.02.2021

St. Kitts and Nevis is a dual-island Caribbean country known for its natural beauty and rich cultural history. Its allure extends from its pristine beaches, tropical landscapes, and diverse African, British, Caribbean, and French influences.  Most interestingly, however, St. Kitts and Nevis offers investors a chance to elevate their lifestyle by offering a citizenship by investment program. This program allows investors to obtain a St. Kitts and Nevis passport and citizenship for them and their family through investing in the breathtaking nation.

Many investors choose to obtain a St. Kitts and Nevis passport not just for the enhanced travel mobility it offers, but to gain a tax residency in the Caribbean nation. This provides high net worth individuals with the flexibility and freedom to safeguard their wealth.

Benefits of Nevis as a Tax Haven

St Kitts and Nevis tax rates for both individuals and corporations are among the most liberal worldwide.. There is no income tax for individuals, nor inheritance, gift, duty, capital gains, or cooperation tax; such benefits truly demonstrate the St Kitts tax haven perks.

The Saint Kitts and Nevis offshore incentives are also real at the corporation level. Nevis offshore banking solutions offer various international and offshore tax planning vehicles, which includes trusts, foundations, Captive Insurance Companies, IBC’s, LLP’s, and LLC’s, not to mention excellent offshore banking and insurance services. Incorporating an LLC in Nevis requires only one director and one shareholder.

Furthermore, investors who set up an LLC or tax planning vehicle in the St Kitts and Nevis tax haven enjoy the country’s lenient anti-avoidance rules; these include no CFC tax rules, no transfer pricing, and no exit tax rules.    Certain tax exemptions are also available to corporations. These factors make St Kitts and Nevis corporate tax rates competitive, to say the very least.

St. Kitts and Nevis has a strong reputation for providing financial privacy by not making any information public regarding owners and directors of offshore company. St. Kitts and Nevis’s government has exhibited a total commitment to maintaining the confidentiality of those involved in a legitimate business. Unlike other offshore jurisdictions,  St. Kitts and Nevis does not have any reported cases of money laundering or tax evasion.  This makes it a great destination for tax residents.

Who is a tax resident?

Usually a tax resident is someone holding a resident card and living in a country long enough for them to become eligible for taxes. In St. Kitts and Nevis however, this concept differs, as investors choose the country as their tax base due to its favourable tax regime. A tax resident in St. Kitts and Nevis is someone who chooses to be taxed in the Caribbean nation, moves their wealth and funds to the country, and sets their business base in St. Kitts and Nevis; in turn taking full advantage of the tax regime.

For foreigners to qualify as a tax resident, investors need to reside in the Country for at least two months out of the year. An individual and their family members who hold a St Kitts and Nevis passport qualify as a tax resident.

How tax residency is confirmed

Simply put, you can move your tax base to St. Kitts and Nevis through becoming a citizen. Once you obtain citizenship by investment you are free to open businesses, bank accounts, acquire and sell property, draft wills, and much more in the Caribbean country.

The moment you obtain your St. Kitts citizenship is the moment you can confirm your tax residency status in the breathtaking nation. It is that simple.

What are the tax rates for local types of income for corporations and individuals

There are several advantages to holding a Saint Kitts and Nevis tax residency status and benefiting from being a citizen of the St Kitts and Nevis tax haven. Although the country has not yet reached a “St Kitts zero tax” level, its taxation landscape is extremely liberal and enticing, to give you a better idea about the astonishingly affordable tax regime in St. Kitts and Nevis we have listed an overview of the country’s notable tax requirements:

Corporate income tax:

St. Kitts and Nevis have a flat rate of 33% for corporate income tax. The branch tax rate is also 33%.

St Kitts Sales Tax:

The Country has a Value Added TAX (VAT), which consists of three rates: the Standard at 17%, the Reduced at 10% for hotel accommodation and restaurants, and the Zero-Rated items at 0%, these items include flour, sugar milk, bread, oats, and rice.

Capital Gains Tax:

Capital gains are not subject to tax unless sold within one year of purchase within St. Kitts  and Nevis. In that case tax rates are the lower half of the corporation tax for that year, or 20%.

Interest, Dividends, and Royalties

Interests, dividends, and royalties for foreign non-residents are taxed 15% for both corporations or individuals. For citizens and residents however, it is zero percent.

St Kitts Property Tax:

The Country utilizes a simple formula of “VALUATION x TAX RATE = PROPERTY TAX” to determine property taxes. The tax rates start from as low as 0.1%.

St Kitts Airport Departure Tax:

For travelers and locals, there is a US$ 37 departure tax. The departure tax St Kitts does not need to be paid separately at the airport for it is part of the airfare.

Withholding tax rate (non-treaty):

Withholding tax in St Kitts is 10%. It is deducted by individuals and ordinary companies that conduct business in St Kitts and are remitting payments to persons outside of the Country.

Saint Kitts and Nevis Citizenship by Investment Program (CBI)

St. Kitts & Nevis Citizenship by Investment Program is the longest-running of its kind. Since its establishment in 1984, the Program grants qualified investors and their families the opportunity to become a citizen of St. Kitts & Nevis by making a contribution to the development of the Country.

Investors and any family member can directly qualify for citizenship through investment, either by donating to a government development fund or investing in real estate.The government requires an investment of either a minimum donation of USD$ 150,000 to the Sustainable Growth Fund (SGF) or an investment of USD$ 200,000 in real estate.

Holders of a St Kitts and Nevis passport enjoy visa-free access to a total of 156 destinations (128 countries) worldwide, including the UK, EU, and Singapore, one of the many St Kitts citizenship benefits. Also, holders of this passport will qualify for St Kitts and Nevis income tax rates.

If you would like to know more about how you can benefit from St. Kitts and Nevis’s great taxation regime through becoming a citizen of the nation, contact us today for an individual consultation with  our St. Kitts and Nevis citizenship expert.

Frequently Asked Questions & Answers

What is the Saint Kitts tax year?

St Kitts and Nevis have an 'Unincorporated Business Tax’ calendar consisting of three separate tax periods. The first is from December – February, the second is from March-May, and the third is from June – August. Details about the St Kitts tax rates and respective tax schedules can be found at the tax office in St Kitts.

Is the Country included in the CRS?

St Kitts and Nevis actively participate in this tax matter. On December 21, 2016, the National Assembly of St Kitts and Nevis passed the Common Reporting Standard (Automatic Exchange of Financial Account Information) Act to implement the Common Reporting Standard. The Act is also supported by the Common Reporting Standard Regulations and made official on December 29,2016. All reporting financial institutions in St. Kitts and Nevis are required, in respect of the calendar year 2017 and every following year, to file with the Competent Authority all prescribed information on reportable accounts.

Do I need to file a tax return?

There is no personal income tax for individual St. Kitts and Nevis passport holders; thus, it is unnecessary to file a tax return form, nor is there a need to deal with filing payment or penalties.With corporations, any business incorporated in St Kitts and Nevis will need to file an Income Tax Return, even if the corporation did not have any business transactions during the year or even if it applied for a tax holiday. Any non-resident, corporation, or otherwise, with a permanent business establishment in the Country must file an annual Income Tax Return. An offshore corporation's local branch office will be considered as if they were incorporated in St Kitts and Nevis and as a separate tax entity from their head office.

Is St Kitts and Nevis a tax haven?

A trust incorporated in Nevis is exempted from taxation on any income earned anywhere in the world outside of Nevis, including dividends and interest, withholding taxes, capital gains taxes, or estate taxes. Nevis trusts or offshore banking from Nevis are not required to pay stamp duty on transactions. There are no exchange controls in Nevis, and the Country has steadfastly refused to sign any taxation treaties with other countries.

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