Table of Contents
Trinidad and Tobago
Overview of the Tax Regime in Trinidad and Tobago
The Republic of Trinidad and Tobago is a twin island country situated off the northern edge of South America mainland, lying 11 kilometres (6.8 miles) just off the coast of northeastern Venezuela and 130 kilometres (81 miles) south of Grenada. Bordering the Caribbean to the north, it shares maritime boundaries with other nations including Barbados to the northeast, Grenada to the northwest, Guyana to the southeast, and Venezuela to the south and west.
Trinidad and Tobago has one of the highest GDP and GNI per capita in Latin America and the Caribbean. Furthermore, it is recognised as a high-income economy by the World Bank. Unlike most of the English-speaking Caribbean, the country’s economy is primarily industrial, with an emphasis on petroleum and petrochemicals. Oil production as well as the refining and production of liquefied natural gas (LNG) are major industries. Due to its robust oil and gas industry, Trinidad and Tobago boasts one of the cheapest electricity rates in the western hemisphere. As a result, this has supported the development of a significant manufacturing sector. This includes items such as food products, beverages, organic and inorganic chemicals, iron and steel. Trinidad and Tobago also has a healthy regional and international market, having trade agreements with CARICOM, European territories, the USA, and Venezuela.
TAX LAWS IN TRINIDAD AND TOBAGO
• This is a tax levied on individuals accruing chargeable income in Trinidad and Tobago at a rate of 25% on the first $1M and 30% on any excess over $1M.
• There is deduction of a personal allowance claim of TT$84,000 and certain other deductions if the individual is a resident of Trinidad and Tobago.
Pay As You Earn (PAYE)
Employers are required to deduct and remit the taxes (PAYE) to the Board of Inland Revenue by the 15th day following the month in which deductions made.
An employer is required to:
• Register with the National Insurance Board (“NIB”);
• Ensure it registers all employees with the NIB; and
• Make deductions from employees based on NIB rate sheets.
An employer is required to deduct and remit health surcharge to the Board of Inland Revenue:
• The current rate is $8.25 per week where the employee earns more than $469.99 monthly or $109 weekly.
• If the employee earns less than $469.99 monthly, then the rate of Health Surcharge is $4.8o per week.
Resident companies are subject to tax on profits directly accruing in or derived from sources within Trinidad and Tobago. Non resident companies carrying on business in Trinidad and Tobago is subject to corporation tax on gains and profits arising from the trade or business in Trinidad and Tobago.
The current rate of tax is 30% for all ordinary companies however certain industries are taxed at special rates. Special rates apply to banks, petrochemical companies and life insurance companies.
A taxpayer must file its return by 30 April following the end of the income period. Quarterly instalments of taxes are payable to the Board of Inland Revenue on 31 March, 30 June, 30 September and 31 December. Any balance outstanding is due by 30 April after the end of the financial year.
A company is also subject to Business Levy and Green Fund Levy at the rate of 0.6% and 0.3% respectively based on its gross receipts. Where Business Levy exceeds the Corporation Tax liability, only Business Levy is paid and where the Corporation Tax liability exceeds the Business Levy liability, Corporation Tax is paid. Green Fund Levy is always payable.
Companies are required to file a corporation tax return on or before 30 April of the year after the end of the financial year. Where the company fail to file the tax return six months after the due date, there is a penalty of $1,000 imposed where the return remains outstanding for every six months or part thereof.
Companies in the Trinidad and Tobago Energy Sector
Companies engaged in the following businesses are subject to corporation tax at the rate of 35%.
- manufacture of petrochemicals;
- liquefaction of natural gas;
- separation of liquids from a natural gas and natural gas processing;
- transmission and distribution of natural gas; and
- wholesale marketing and distribution of petroleum products
PETROLEUM PROFITS TAX
Petroleum Profits Tax (“PPT”) is applied on profits from production or refining activities earned by Petroleum companies are subject to a special fiscal regime, principally governed by the Petroleum Taxes Act.
Rate of PPT:
- Petroleum Operations – 50%
- Petroleum operations in “deep water” – 35%
SUPPLEMENTAL PETROLEUM TAX
Supplemental Petroleum Tax (“SPT”) is a tax charged on gross income derived from disposals of crude oil.
SPT paid is allowed as a deduction in arriving at profits subject to PPT.
SPT is computed and assessed on a quarterly basis (31st March; 30th June; 30th September; and 31st December). The rate of SPT is calculated as follows:
|Price per Barrel in $ US||Rate % Marine||Rate % “New Field Development Marine”||Rate % Land & Deep Water Block|
|50.00 and less||0||0||0|
|50.01 – 90.00||33||25||18|
|90.01 – 200.00||SPT Rate = Base SPT* + 0.2% (P-US$90.00)|
|200.01 and over||55||47||40|
Scale of SPT rates:
Where Base SPT* rate for:
- Marine “A” is 33%
- Land and Deep Water “C” is 18%
- P = Weighted Average Crude Oil Price in USD
Further, for the financial years 2021 and 2022, Small Onshore Producers (persons producing less than two thousand barrels of crude oil per day) Scale of Supplemental Petroleum Tax Rates are as follows:
|Price per Barrel in $ US||Rate %|
|75.00 or less||0|
|$75.01 – $90.00||18|
|$90.01 – $200.00||SPT rate = Base SPT rate + 0.2% (P-$90.00)|
|$200.01 and over||40|
VALUE ADDED TAX
VAT is charged on the entry of goods imported into Trinidad and Tobago, and on the commercial supply within Trinidad and Tobago of goods and prescribed services by a registered person.
Key points to note:
- Registration Threshold is TT$500,000 with effect from 1 February 2016.
- The Standard Rate is 12.5%
- Zero rated items as listed in Schedule 2 of the VAT Act.
- Exempt services included in Schedule 1 of the VAT Act.
- VAT returns should be filed with the Board of Inland Revenue 25 days after the end of the tax period to which it relates.
- In practice where the filing or payment deadline falls on a weekend the deadline is extended to the next business day.
The Property Tax Act and Valuation of Land (Amendment) Act were both assented to in 2009, but the Government of Trinidad and Tobago waived the payment under the Property Tax Act for several years following. This waiver having officially ended in September 2017, the collection of Property Taxes is scheduled to begin in fiscal year 2021.
The tax is levied in respect of all land and must be paid on or before September 30th each year.
The tax owed is to be calculated by applying the appropriate tax rate to the Annual Taxable Value (Annual Rental value less deductions). The rates are:
Residential land – 3%
Commercial land – 5%
Industrial land (plant and machinery housed in a building) – 6%
Industrial land (plan and machinery not housed in a building) – 3%
Agricultural land – 1%
Where the Annual Rental Value is not available, the tax can be calculated by applying a different formula to the capital cost of the property.
DOUBLE TAXATION TREATIES
Trinidad and Tobago has entered into the following double taxation treaties (download here):
|1. Brazil||8. India||15. United Kingdom|
|2. Canada||9. Italy||16. United States of America|
|3. Caricom||10. Luxembourg||17. Venezuela|
|4. China||11. Norway|
|5. Denmark||12. Spain|
|6. France||13. Sweden|
|7. Germany||14. Switzerland|
WITHHOLDING TAX RATES
|Dividends||5% and 10%||5% and 10%||0%||5% and 10%||5% and 10%||5% and 10%||5% and 10%||5% and 10%||5% and 10%|
|Interest||15%||10%||15%||10%||15%||10%||0% and 15%||10%||10%|
|Management Fees||No Clause||10%||15%||No Clause||5%||10%||No Clause||10%||5%|
|Pensions and Annuities||–||0% and 15%||–||–||–||–||–||–||–|
|Other income/payments||No Clause||15%||–||No Clause||–||No Clause||No Clause||No Clause||No Clause|
|Luxembourg||Norway||Spain||Sweden||Switzerland||United Kingdom||United States of America||Venezuela||Rest of the World|
|Dividends||5% and 10%||5% and 10%||0%, 5% and 10%||5% and 10%||5% and 10%||5% and 10%||5% and 10%||5% and 10%||5% and 10%|
|Interest||7.5% and 10%||15%||8%||0% and 15%||10%||10%||15%||15%||15%|
|Management Fees||5%||5%||5%||12.5%||5%||10%||No Clause||10%||15%|
|Pensions and Annuities||–||–||–||–||–||–||–||–||15%|
|Other income/payments||–||No Clause||–||–||No Clause||No Clause||No Clause||–||15%|
The information on this page is provided as at December 1, 2021, and is provided for information purposes only. It is not intended to be relied upon for specific tax and/or business advice and as such, readers are encouraged to consult with professional advisors on specific matters prior to making any decision.
www.caribbean-tax.com is responsible for the result of any actions taken on the basis of this information, nor for any omissions or errors contained herein.
Should you require legal advice, please contact us and we shall be happy to make a referral to a local tax practitioner.