Saint Lucia: 2022-2023 budget presented; certain tax measures effective for international business companies

No specific changes were announced with respect to taxation.

Certain tax measures effective for international business companies

The budget statement for fiscal year 2022-2023 (presented 29 March 2022) does not include any specific tax changes.

However, for “international business companies,” the following changes are effective 30 June 2021, after the end of a “grandfathering period.”

  • Economic substance rules: The following companies or entities are subject to the economic substance rules (under the Economic Substance Act):
    • Any company whether incorporated inside or outside of Saint Lucia if registered in Saint Lucia
    • Any limited liability partnership registered in Saint Lucia
    • Any international trust in Saint Lucia that conducts a relevant activity, regardless of whether income is earned
  • Corporate tax rate: International business companies are subject to tax at the domestic rate of 30% (effective 30 June 2021). However, all income earned from sources outside Saint Lucia are not subject to tax in Saint Lucia.
  • Withholding tax: All companies making payments to non-residents must withhold tax—at rates of 15% for interest and 25% for all other payments (unless reduced by an applicable treaty)—and remit the withheld taxes to the Inland Revenue Department.
  • Stamp tax (duty): When a company whose shares are being transferred is an “international business company” that derives 90% or more of its income from sources outside Saint Lucia, that company must produce an instrument in relation to the share transaction. If this instrument does not have the effect of transferring ownership or control of immoveable property in Saint Lucia, then the transaction is exempt from stamp tax.

Read an April 2022 report [PDF 312 KB] prepared by the KPMG member firm in Barbados and the Eastern Caribbean

 

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