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Sint Maarten - Indirect Tax Guide

Sint Maarten - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Sint Maarten.

Explore the requirements and rules that apply to Indirect Taxes in Sint Maarten.

Small mountain and port view with houses, boats and trees against-blue-sky, Americas Guide Sint Maarten

General

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

Turnover tax.

Are there other indirect taxes?

  • Real estate transfer tax. 
  • Excise taxes. 
  • Stamp duty and registration duty. 
  • Room tax.

What supplies are subject to VAT?

The Sint Maarten turnover tax (TOT) is comparable with a sales tax.

TOT is levied on revenues derived from services and deliveries rendered by an entrepreneur or company on Sint Maarten. Please note that non-resident service providers are also subject to this tax.

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

The standard TOT rate is 5 percent.

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

Entrepreneurs carrying out a business, provided they are collecting revenues from the sale of goods or the rendering of services in Sint Maarten.

VAT/GST registration

Who is required to register for real estate transfer tax?

None of the parties. The amount of real estate transfer tax due is collected by the notary public and paid by the notary public to the tax collector. The purchaser of the real estate carries the tax burden.

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)?

No, based on applicable legislation, overseas companies may only register for turnover tax purposes in cases where the company is subject to turnover tax in Sint Maarten.

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

Yes, parties can agree in advance that the local party will take responsibility for filing and payment of the TOT on behalf of the overseas company. However, please note that in case of non-compliance the company overseas could be held liable for the TOT due.

Does an overseas company need to appoint a fiscal representative?

No.

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

A formal request. It is only required to include general information in the respective form:

  • incorporation documents of the legal entity 
  • identification of directors and officers of the legal entity 
  • information concerning the address of the entity within Sint Maarten 
  • business activity.

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?

Monthly. Upon request, taxpayers are able to submit turnover tax returns on a yearly basis if certain conditions are met.

What are the exchange rate rules in your country?

Each year, the tax authorities publish an overview of the average exchange rate applicable for that particular year for several foreign currencies. However, the taxpayer is also allowed to use the exchange rate of the payment/receipt date. The Antillean guilder (ANG) is pegged to the US dollar (USD1=ANG1.78).

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

Exports of goods are in principle subject to TOT. An exemption applies, among others, if 50 percent or more of a company’s turnover is realized through the exporting of goods.

Exports – Services

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

Exports of services enjoyed abroad are not subject to TOT.

Imports – Goods

How are goods dealt with on importation?

Import of goods are not subject to import duties. However, please note that excise is levied on gasoline and other derivatives from petroleum.

Imports – Services

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

In principle, all foreign services providers engaging in services transactions with business customers in Sint Maarten are deemed to have taken domicile at the tax administration of Sint Maarten. Consequently, these foreign services providers become subject to the applicable TOT filing and payment obligations.

VAT/GST recovery

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

No.

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

No.

Are there any restrictions to the deduction of input VAT?

Not applicable. In principle, there is no right to deduct TOT.

Tax points

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

Ultimately within 15 days after month-end.

Invoices

Is a business required to issue tax invoices?

Yes.

Is it possible/mandatory to issue invoices electronically?

Yes, it is possible but not mandatory.

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?

The books, accounting registry and invoices shall be stored for a period of 10 years.

Can the invoices be stored abroad?

Yes.

Audits

Do tax audits take place on a regular basis?

Yes, approximately every 5 years.

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

No.

What penalties can arise from non-compliance?

There are two types of penalties. The first type is a default penalty and applies when:

  • the tax return is not filed on time (maximum penalty of ANG2,500) 
  • the tax due is (wholly or partly) not paid within the specified period (maximum penalty of ANG10,000)

The second type is an offense penalty and applies when tax is not fully paid on time due to deliberate intent or gross negligence of the taxpayer. The maximum penalty amounts up to then 100 percent of the tax due.

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?

Yes, an exemption is applicable based on a general policy laid down in a ministerial decree.

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

In general, there is no right to claim a deduction of the turnover tax paid by entrepreneurs, as this is a cumulative system.

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

Yes.

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

The law contains a number of exemptions.

Rulings

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

No.

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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