Tax laws Saint Lucia
Saint Lucia's taxation system is designed to be straightforward, with a focus on personal and corporate income taxes, value-added tax (VAT), and property taxes.
Personal Income Tax:
Saint Lucia employs a progressive tax rate for personal income, applied to chargeable income (total income minus allowable deductions). The rates are as follows:
- Up to XCD 15,000: 2,250 (15% of XCD 15,000)
- XCD 15,001 to XCD 30,000: An additional 20% on income exceeding XCD 15,000
- Above XCD 30,000: An additional 30% on income exceeding XCD 30,000
Recent Changes:
Effective January 1, 2023, the Government of Saint Lucia increased the annual personal income tax exemption threshold from XCD 23,000 to XCD 25,400. This means individuals earning up to XCD 25,400 annually are not subject to personal income tax. Additionally, employees earning up to XCD 2,116 monthly are exempt from Pay-As-You-Earn (PAYE) deductions.
Corporate Income Tax:
- Resident Companies: Subject to a tax rate of 30% on worldwide income.
- Non-Resident Companies: Subject to a tax rate of 33.3% on income derived from a permanent establishment in Saint Lucia. Income not connected to a permanent establishment is subject to a 25% withholding tax.
Value-Added Tax (VAT):
The standard VAT rate is 12.5%. A reduced rate of 10% applies to hotel accommodation services and related tourism sector services. Certain goods and services may be exempt or subject to a 0% rate.
Property Tax:
Property taxes are levied annually based on the open market value of the property. Residential properties are taxed at 0.25%, while commercial properties are taxed at 0.4%.
Other Taxes:
- Social Security Contributions: Both employees and employers contribute 5% of the employee's salary to the National Insurance Corporation (NIC), funding social security programs.
- Contractor Tax: Independent contractors are taxed at a flat rate of 10% on gross earnings.
- Interest and Royalties Tax: Tax residents are subject to a 10% tax on interest and royalties, while non-residents face rates ranging from 15% to 25%, depending on their residency status and specific circumstances.
Tax Residency:
Saint Lucia determines tax residency based on the source of income:
- Residents and Ordinarily Residents: Taxed on worldwide income.
- Non-Residents: Taxed only on income derived from Saint Lucia sources.
Additional Information:
- No Capital Gains Tax: Saint Lucia does not impose taxes on capital gains.
- No Inheritance or Estate Tax: There are no inheritance, estate, or gift taxes in Saint Lucia.
For the most accurate and up-to-date information, it is recommended to consult the Inland Revenue Department of Saint Lucia or a tax professional.
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