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Antigua - Indirect Tax Guide

Antigua - Indirect Tax Guide

Explore the indirect tax regimes and compliance administrative issues in Antigua.

Explore the indirect tax regimes and compliance administrative issues in Antigua.

Seashore green hills in Antigua

General

Types of indirect taxes (VAT/GST and other indirect taxes).

Antigua sales tax (ABST) is a value added type of tax introduced in Antigua in 2007. ABST is levied on local consumption and paid by the consumer. The Commissioner of Inland Revenue, supported by the Inland Revenue Department, administers the tax. The Customs and Excise Department collects ABST payable on imports on behalf of the Commissioner.

Are there other indirect taxes?

All imports are subject to customs duties, ABST, Revenue Recovery Charge (RRC) and an environmental levy. In some instances, certain exemptions will apply. RCC is applied at a flat rate of 10 percent on the CIF value on all goods imported into, or produced in, Antigua and Barbuda (exemptions also apply). Stamp tax also exists.

What supplies are subject to VAT?

Taxable supplies are subject to ABST; supply of goods or services made in Antigua and Barbuda by a taxable person in the course or furtherance of a taxable activity, but does not include an exempt supply.

A supply of goods means:

  • a sale, exchange, or other transfer of the right to dispose of goods of an owner
  • a lease, hire, or other right granted in relation to goods, including a supply of goods under a finance lease
  • anything deemed to be a supply of goods by the Act or regulations.

Anything that is not a supply of goods or money is a supply of services.

What are the standard or other rates (i.e. reduced rate) for VAT/GST and other indirect taxes?

VAT (standard) 15 percent; VAT (reduced) 0 percent; 12.5 percent for hotel accommodation. Certain supplies are exempt.

VAT/GST registration

Who is required to register for VAT/GST and other indirect taxes? 

Entities must be registered if they:

  • have an annual taxable activity level of at least 300,000 East Caribbean dollars (XCD) 
  • are government entities making commercial supplies, promoters of public entertainment, licensees/proprietors of places of public entertainment or persons providing specified professional services 
  • are asked by the Inland Revenue Department to combine the value of supplies (made or projected) with those of related persons in combination with another person, and the total is at least XCD300,000. 

A taxable person for the purposes of ABST is a person (individual, corporate or otherwise) who is registered or required to be registered so as to collect and pay ABST. Generally, registration is required of persons who have made or are likely to make supplies to the value of at least XCD300,000 during a continuous period of 12 calendar months. Additionally, government entities and similar bodies that supply goods and services for a fee or carry out business-type activities, promoters of public entertainment, and suppliers of certain types of professional services must be registered regardless of whether or not they reach the registration threshold noted above.

Is voluntary registration for VAT/GST and other indirect taxes possible for an overseas company (e.g. if the annual turnover is below the relevant VAT/GST and other indirect taxes registration threshold)?

The ABST registration provisions apply to all persons providing supplies in Antigua, regardless of whether they are residents or not. Supplies made by a non-resident are regarded as taking place in Antigua where the supply is of:

  • goods that are in Antigua at the time of the supply — a lease, hire or license of goods that are used or that are for use in Antigua 
  • telecommunication services initiated by a person physically in Antigua 
  • a service directly in connection with land situated in Antigua 
  • any other service (not mentioned above) that is physically performed in Antigua by a person in Antigua at the time.

Are there any simplifications that could avoid the need for an overseas company to register for VAT?

No. Only where the overseas company’s taxable supplies are below the XCD300,000 threshold.

Does an overseas company need to appoint a fiscal representative?

Yes, depending on the services where the company is regarded as a taxable person.

Which forms and supporting documentation does an overseas company need to submit for VAT/GST and other indirect tax registrations?

Taxable persons are required to complete an ABST Tax Remittance Form and Return.

Is grouping* for VAT/GST and other indirect taxes possible?

No

VAT/GST compliance

How frequently are VAT/GST and other indirect tax returns submitted?

One return per month. The ABST return for each tax period should be filed no later than 1 calendar month after the end of the period.

What are the exchange rate rules in your country?

Fixed exchange rates (1 US dollar=XCD2.70).

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

Exports of goods and other supplies of goods for consumption outside Antigua and Barbuda are zero-rated supplies.

Exports – Services

How are exports of services treated for VAT/GST purposes?

Exported services and other supplies of services for consumption outside Antigua and Barbuda are zero-rated supplies.

Imports – Goods

How are goods dealt with on importation?

Importing of goods is deemed to occur on the date they are entered under the Customs (Control and Management) Act or on the date they were brought into Antigua and Barbuda. The ABST payable by the importer, must be paid to the Comptroller at the time of importing.

Imports – Services

How are services brought in from abroad treated for VAT purposes?

Where a supplier who is not resident in Antigua and Barbuda supplies services that are physically performed by any person in Antigua and Barbuda, or when services are performed to a recipient who is a registered person and who acquires the services in the course or furtherance of a taxable activity, the supply is deemed to take place outside of Antigua and Barbuda, unless the supplier and the recipient have agreed in writing otherwise.

VAT/GST recovery

Can an overseas company recover VAT/GST and other indirect taxes if not registered for VAT/GST locally?

No; unless through an agent.

Are there any exemptions with the right to recover or deduct input VAT?

Yes. Input VAT may not be deducted in relation to the supply of exempt services.

Are there any restrictions to the deduction of input VAT?

Yes. Same as above.

Tax points

When is VAT/GST due on a supply of goods or services?

The period covered by the ABST Return is referred to as the ‘Tax Period’ and is 1 calendar month.

A tax period is the period in respect of which a taxable person must account for and pay any ABST to the Inland Revenue Department. Each return will be due on the last day of the month following the end of the tax period, whether or not tax is payable in respect of that period.

Invoices

Is a business required to issue tax invoices?

Yes.

Is it possible/mandatory to issue invoices electronically?

Yes, however, an audit may require the presentation of physical invoices to the authorities.

Is it possible for the vendor to issue an invoice (i.e. self-billing)?

No.

Record-Keeping Requirements

How long must records and invoices be retained?

Records and invoices must be retained until the expiration of 7 years after the end of the tax period to which they relate.

Can the invoices be stored abroad?

No. Accounts, documents and other records must be maintained in Antigua.

Audits

Do tax audits take place on a regular basis?

Yes, audits are conducted and various selection criteria apply.

Are audits done electronically in your country (e-audit)? If so, what system is in use?

No, physical audits are conducted with the use of electronic data.

What penalties can arise from non-compliance?

  • Late filing penalty equal to the greater of XCD500 or 5 percent of the tax due for each month in which the return remains outstanding. 
  • Late payment penalty of 20 percent of the tax due where the payment is not made by the due date. 
  • Interest at the rate of 1 percent per month, or part thereof, for the period during which the payment remains unpaid. 
  • Other penalties may apply.

Special Indirect tax rules

Are there any special rules for the sale of a company by one taxpayer to another where VAT is not due on the sale?

Special provisions apply in respect of exempt supplies, governmental activities, public entertainment, etc.

Are there unique specific indirect tax rules that you would not expect to find in ‘standard’ VAT jurisdictions?

Various provisions apply.

Does a reverse-charge mechanism apply for goods or services?

Yes

Are there indirect tax incentives available (e.g. reduced rates, tax holidays)?

Yes, a reduced rate applies with respect to the provision of hotel accommodation. Zero-rated provisions also apply.

Rulings

Are rulings and decisions issued by the tax authorities publicly available? 

Court rulings are public but rulings issued on individual requests are not usually made public. However, as a result of an issue, the authorities may issue a policy note.

For further information please contact

Louisa Lewis-Ward
Partner, Tax
KPMG in Barbados and Eastern Caribbean
T: +1 246 434 3941
E: louisaward@kpmg.bb

Footnote

*By ‘grouping’ we mean: either a consolidation mechanism between taxpayers belonging to the same group (payment and refund are compensated but taxpayers remain distinct) or a fiscal unity for VAT/GST purposes (several taxpayers are regarded as a single taxpayer).

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