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Saint Lucia - Indirect Tax Guide

Saint Lucia - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Saint Lucia.

Explore the requirements and rules that apply to Indirect Taxes in Saint Lucia.

Colourful houses and boats in harbour Saint Lucia

General

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

In 2012, VAT was introduced in Saint Lucia. The Commissioner of Inland Revenue, supported by the Inland Revenue Department, administers the tax. The Customs and Excise Department collects VAT payable on imports on behalf of the Commissioner.

Are there other indirect taxes?

All imports are subject to customs duties, and home-produced goods (mainly liquor, beer and cigarettes), and fuel imported by a wholesaler.

What supplies are subject to VAT?

Certain supplies of goods or services made in Saint Lucia are subject to VAT.

Goods or services supplied in the course or furtherance of a taxable activity carried on continuously or regularly by any person in Saint Lucia whether or not for profit, that involves or intends to involve, in whole or in part, the supply of taxable goods or services to another person for consideration.

A supply of goods is defined as a sale of goods, a grant of the use or right to use goods or any agreement under which such use or right to use is granted. Additionally, a supply of goods means a transfer or provision of thermal or electrical energy, heat, gas, refrigeration, air conditioning or water.

A supply of services means anything done which is not a supply of goods or money including:

  • the granting, assignment, cessation or surrender of a right
  • making available a facility or advantage
  • refraining from or tolerating an activity.

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

VAT standard rate is 12.5 percent; 10 percent for the hotel and accommodation sector; and VAT (reduced) at 0 percent.

VAT/GST registration

Who is required to register for VAT/GST?

Registration is required where the registrant has annual sales turnover of 400,000 East Caribbean dollars (XCD). Voluntary registration is permissible.

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)?

Yes, through an agent.

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

No. Only when the overseas company’s taxable supplies are below XCD400,000 the threshold.

Does an overseas company need to appoint a fiscal representative?

Yes, depending on the type of supply the company may be regarded as a taxable person and therefore might need to register.

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

Registrants are required to complete a Value Added 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 VAT return for each tax period should be filed by the 21st of the month following the end of the taxable period.

What are the exchange rate rules in your country?

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

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

A supply of goods where the supplier has entered the goods for export pursuant to the Customs (Control and Management) Act, and the goods have been exported from Saint Lucia by the supplier, are treated as zero rated.

Exports – Services

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

Similar to above, a supply of service which has been exported is treated as zero rated.

Imports – Goods

How are goods dealt with on importation?

On importation, goods are charged VAT on their value. The Comptroller of Customs shall, at the time of the import through customs, levy the tax due on behalf of the Comptroller. At that time, they shall also obtain the name and tax payer identification number, if any, of the importer, tax import declaration and the invoice values in respect of the import.

Imports – Services

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

Generally, VAT is charged on the consideration of the import of service. An import of service occurs on the earliest date of:

  • when the performance of the service is complete
  • an invoice for the service is issued by the supplier
  • any consideration for the service is received.

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?

A supply of goods or services occurs on the earliest of the date on which:

  • the goods are delivered or made available or the performance of services is completed
  • an invoice for the supply is issued by the supplier
  • any consideration for the supply is received.

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 should be retained for six years after the end of the tax period to which they relate.

Can the invoices be stored abroad?

No. Records must be maintained in Saint Lucia.

Audits

Do tax audits take place on a regular basis?

Yes, audits are conducted and different selection criteria apply. They commonly occur where the registered person is in a refund position.

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

Audits are not done electronically. Physical audits are conducted by tax officers who may request submission of documents in paper or electronic form.

What penalties can arise from non-compliance?

A late-filing penalty of XCD250 for each month in which the return remains outstanding.

A late-payment penalty of 10 percent of the tax due, where the payment is not made by the due date.
Interest at the rate of 1.25 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?

A supply by a registered person to another registered person of a taxable activity, as a going concern, subject to certain conditions, is zero rated and transactions related to shares, stocks and other securities other than custody services are exempt supplies.

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

No.

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

Yes.

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

Yes, reduced rate with respect to the provision of the hotel sector. Zero rated provisions also apply.

Rulings

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

Court rulings are public, but rulings issued in respect of 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

Footnotes

*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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