With Indirect Tax News

InTouch with indirect tax news Caribbean Region – Alert pwc InTouch with indirect tax news Caribbean Region Alert In this issue: PricewaterhouseCoopers Caribbean Region is pleased I Antigua & Barbuda – Budgetary proposals legislated ............................3 to present the August 2010 I Aruba – BBO rate reduced......................................................................5 issue of InTouch, a bulletin I Barbados – Reforms to Barbados VAT ...................................................7 I Curaçao, Bonaire, St. Maarten, Saba, St. Eustatius...............................9 designed to keep our clients I Dominica ...............................................................................................10 up-to-date with regional I Grenada – VAT in Grenada effective February 1, 2010 .........................11 indirect taxation. I Jamaica – Increase in rate of GCT.......................................................12 I St. Kitts and Nevis – VAT proposed implementation ...........................14 I St. Lucia – Proposed introduction of VAT delayed...............................15 I Trinidad & Tobago ................................................................................16 I Contacts................................................................................................17 2 pwc Antigua & Barbuda Updates and developments An overview Rates 2009 saw the rate of Antigua and Barbuda Sales Antigua and Barbuda Sales Tax (“ABST”) is the The following rates of tax are applicable under the Tax (“ABST”) applicable to gambling supplies name given to a value added type tax that ABST regime: (see Rates) changed to 10%, for gambling was introduced in Antigua and Barbuda from I a zero rate applicable to scheduled goods and supplies made from the inception of ABST through January 29, 2007. services; January 28, 2009. The standard rate of 15% remains applicable to subsequent The ABST is levied on local consumption, and I a ‘transitional’ rate of 10.5% which is gambling supplies. The amendments to is intended to be borne by the consumer, having re- currently being applied to hotel or holiday gambling operations have not been made. placed several other consumption taxes. accommodation; and The tax is administered by the Commissioner Based on the 2010 budget proposals put forward of Inland Revenue, supported by the Inland I a standard rate of 15% applicable to all other by the government on November 30 2009, (legis- Revenue Department. taxable supplies and imports. lated March 11, 2010) the scope of items in the ‘basket’ of zero-rated Customs Tariff The Customs & Excise Department collects ABST In addition to the foregoing, there was also a delimited goods has been reduced to include only payable on imports on behalf of the transitional rate of 10% levied on gambling supplies the following items from January 1, 2010: chicken, Commissioner. made during the first two years of ABST (i.e. up fish, milk, butter, eggs, fresh fruits and vegetables, until January 28, 2009). Supplies thereafter are rice, flour, cornmeal, cereal, cooking oil, shortening Generally, registration is required of persons who subject to the standard rate of 15%. and margarine, bread, yeast, water, medicine (such have made or are likely to make supplies to the as aspirin, paracetamol and cough medicine), value of EC$300,000 in a continuous period of sugar, salt, tofu, soya milk and soya chunks, dia- twelve calendar months. pers (babies and adults) and baby formula for food. I ABST Antigua & Barbuda Sales Tax pwc 3 L Contents Antigua & Barbuda A taxable person for the purposes of ABST is a I education; Customs Duty is levied on goods based on the cost, person (individual, corporate or otherwise) who is I long-term accommodation ( over 45 days); insurance and freight ("CIF") values and rates deter- registered or required to be registered so as to I prescription medicines, medical and similar mined by the Caricom Common External Tariff. collect and pay ABST. Taxable persons are required services, and veterinary services; to file returns of relevant information and pay ABST I unimproved/agricultural land; Antigua and Barbuda Revenue Recovery Charge to the Commissioner of Inland Revenue on a I unprocessed agricultural products; is applied at a rate of 10% on the CIF value on all monthly basis. I agricultural/fishing inputs; goods imported into or produced in Antigua I domestic postal services; and and Barbuda. Exemptions will include entities Government entities and similar bodies which I local entertainment. with which the Government has International supply goods and services for a fee or carry Assistance Agreements , certain Government out business-type activities, promoters of public Customs Duties entities and most supplies or imports of fuel. entertainment, and suppliers of certain types of professional services, are all required to be All imports are subject to import duties, ABST, The Environmental Levy is calculated based on registered regardless of whether or not they Antigua and Barbuda Revenue Recovery Charge dollar value rates from $0.25 - $2,000 and is used reach the registration threshold noted above. and an environmental levy. In all instances certain to finance the cost of protecting and preserving exemptions apply. the environment. Supplies and imports of the following items are exempt from ABST: Import duty is levied on a wide range of imported I local transportation; goods at rates from 0% to 70% specified in the I financial services; Custom Duties Act. I residential premises (except where zero-rated); Contacts: Address: Charles Walwyn Neil M. Coates Tel: (268) 462-3000 11 Old Parham Road Managing Partner Director Fax: (268) 462-1902 P.O. Box 1531 [email protected] [email protected] Direct fax: (268) 462-3756 St. John’s, Antigua Website: http://www.pwc.com/ag pwc 4 L Contents Aruba Updates and developments Goods, services and payment Exemptions Turnover tax in Dutch “Belasting op bedrijt- Goods are defined as all physical objects including Some exemptions are applicable: Companies somzetten” (“BBO”) - due to the election of a new water, gas and electricity. Services are defined as exporting goods from Aruba are exempt from BBO. Government in Aruba, it was proposed all services rendered against a payment. A payment The company has to establish that the goods sold to amend the turnover tax legislation to reduce the is defined as all income received relating to the sale are being sent or transported to a destination BBO rate from 3% to 1.5% effective of a good or the rendering of a service. If the in- outside of Aruba by the entrepreneur. No BBO is January 1, 2010. come is non-monetary, the fair market value should levied on the supply of immovable property if in be taken into account. relation to this supply transfer tax is due. Exemp- BBO on exports was abolished effective June 1, tions also apply in the following instances: 2010. In cases where goods are sold, the taxable event I supply of prescription medicines occurs either where the transportation commences including certain medical aids; Turnover tax (if goods are sold to or from abroad and transported I renting out of apartments or hotel rooms; in connection with the supply) or where the goods in as far as room tax is due; Every company that sells goods or renders a are physically located. I providing the opportunity to gamble, in as service against a payment in Aruba is subject far as gaming tax is due; to turnover tax. The taxable base consists of all In the case of services, the service is rendered I renting out of real estate that is used as a remunerations received by the company for the at the place where the company providing such is private dwelling; supply of goods or the rendering of services. established or has a permanent establishment. I investment income, such as interest and The BBO rate is set at 1.5%. dividends; I qualified banking transactions; I insurance services and the services performed by intermediaries of insurance companies; I transitional expenses, in as far as the supply of the goods or rendering of the service is done on behalf of and for risk and account of another entrepreneur; and I export of goods and services by a company established in the free zone. I BBO – Turnover Tax I Import Duties pwc 5 L Contents Aruba Fiscal Unity Important dates A parent company that owns 100% of the shares in The BBO return should be filed monthly, no later a subsidiary can request to enter into a Fiscal Unity than the 15th day of the calendar month following for BBO purposes. Fiscal unity facilitates the the calendar month for which the BBO is due. taxation for BBO purposes at the level of the ultimate parent company. The turnover generated Import duties by intercompany transactions is exempt from BBO. Import duties are levied according to a tariff, which The BBO is levied on a cash basis. However, upon is a percentage of the CIF-value of the product. request, the company may opt to apply the invoice A classification rule has been published in which method. Upon approval of the tax authorities, the the various products are categorized into groups. invoice should meet certain requirements. The tariff varies from 0% to 50%. Contacts: Address: Hans Ruiter Jourainne Wever Tel: (297) 522 1647 L.G. Smith Boulevard 62 Tax Partner Assistant Tax Manager Fax: (297) 582 4864 P.O. Box 307 [email protected] [email protected] Oranjestad, Aruba Website: http://www.pwc.com/aw pwc 6 L Contents Barbados Updates and developments Rates Customs Duty The government has undertaken a VAT reform VAT is levied at the rate of 15% on the value Customs duty is levied on a wide range of initiative in which legislative and administrative of a wide range of goods and services imported goods at rates specified in the aspects of the VAT system in Barbados are being imported or supplied in Barbados by VAT Customs Act. Barbados’ Customs Tariff is based reviewed. The updates are scheduled to be com- registered persons. A number of services, on the Common External Tariff of the Caribbean pleted during 2011.

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