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Trinidad and Tobago - Indirect Tax Guide

Trinidad and Tobago - Indirect Tax Guide

Explore the requirements and rules that apply to Indirect Taxes in Trinidad and Tobago (T&T).

Explore the requirements and rules that apply to Indirect Taxes in Trinidad and Tobago.

Top view of an Island Trinidad and Tobago

General

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

VAT.

Are there other indirect taxes?

  • Financial services tax: 15 percent.
  • Insurance premium tax: 6 percent.
  • Hotel accommodation tax: 10 percent.

What supplies are subject to VAT?

Any commercial supply of goods and prescribed services within Trinidad and Tobago that are not listed on Schedule 1 Exempt Services, or Schedule 2 Zero-rating of the VAT Act.

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

  • VAT standard rate: 12.5 percent (reduced from 15 percent effective 1 February 2016).
  • VAT (zero-rated).

VAT/GST registration

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

VAT registration is required when the value of the commercial supplies within T&T during the period of 12 months or less (commencing the month that the supply is made) will be more than 500,000 Trinidad and Tobago dollar (TTD) (approximately 75,000 US dollars (USD)).

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.

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

Yes, if it is a one-off supply.

Does an overseas company need to appoint a fiscal representative?

Not mandatory but suggested.

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

  • Completion of the Board of Inland Revenue (BIR) registration form.
  • Evidence that supplies would exceed the registration threshold (e.g. contracts).
  • Originals and copies of incorporation documents.

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

Yes.

VAT/GST compliance

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

Every two months and, in certain circumstances, monthly as determined by the BIR.

What are the exchange rate rules in your country?

For the purposes of VAT, the amount of any consideration that is in a currency other than the currency of T&T shall be converted to the currency of T&T at the rate at which the Central Bank would, at the time of supply or importation, have purchased that currency in the form of notes.

International Supplies of Goods and Services

Exports – Goods

How are exports of goods treated?

VAT is not charged on goods exported out of T&T.

Exports – Services

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

VAT is not charged on services exported outside of T&T. To be considered as an export, the service should be provided to a recipient located abroad and the payment should be made in a currency different to TTD.

Imports – Goods

How are goods dealt with on importation?

The importer pays VAT at the time of entry of the goods into T&T.

Imports – Services

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

Non-registered supplier cannot charge VAT.

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?

Only that the transactions must be related to a commercial supply in the course of, or future course of, business.

Are there any restrictions to the deduction of input VAT?

VAT cannot be deducted if the services received or the goods bought are not related with the business.

Tax points

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

The VAT liability must be remitted to the Tax Authority on or before the twenty-fifth day of the month after the end of the entity’s VAT period. The VAT period is assigned by the Tax Authority on registration.

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)?

Yes (e.g. where goods are appropriated for personal use).

Record-Keeping Requirements

How long must records and invoices be retained?

Records must be kept for at least 6 years after the end of the last tax period to which they relate, except in cases where the Board has given notice in writing that such retention is not required or where the person has ceased to exist and the affairs of the person have been wound up.

Can the invoices be stored abroad?

Approval is required from the Board of Inland Revenue to store records outside of T&T.

Audits

Do tax audits take place on a regular basis?

Yes.

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

No.

What penalties can arise from non-compliance?

Penalty of 8 percent and interest of 2 percent per month on tax assessed for non-compliance.

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?

Upon sale, transfer or other disposition, whether for consideration or not, of a business as a going concern, only the sale of any stock in trade held for the purposes of the business shall be regarded as being a commercial supply on which VAT will be due.

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?

No.

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

Some VAT reliefs are available to fishermen, diplomats, judges and charities.

Rulings

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

No.

For further information please contact:

Nicole Joseph
Director, Tax Services
KPMG in Trinidad and Tobago
T: +1 868 612- KPMG(5764) ext. 2511
E: nicolejoseph@kpmg.co.tt

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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