ST LUCIA

5. Taxation

A. Introduction And Developments

Income tax is assessed on companies and individuals; excise taxes are levied on imports and manufactured goods; property taxes are levied on assessed value of land and buildings; licences and taxes are levied on the transfer of assets. There are a number of incentives built into the tax structure that make St Lucia attractive both for individuals and companies, resident and non-resident.

B. Tax System: General Concepts Of Tax Regime

Income tax on companies is assessed at 30 per cent while income tax on individuals is on a sliding scale with a top rate of 30 per cent. There are a wide-range of concessions, which apply both to companies and individuals for, among others, small business, manufacturing, agriculture, financial services and hotels. There are no capital gains, death, inheritance or gift taxes and there is no tax on distributions.

Persons who are not ordinarily resident (meaning that they do not have a permanent place of abode in St Lucia) are taxed only on St Lucia source income and foreign income to the extent that it is remitted to St Lucia (as long as this foreign income does not fall into one of the categories of non-taxable income mentioned above, such as dividend income).

IBCs will either be exempt from tax, or, if they elect to pay tax, the rate is 1 per cent. IBCs are exempt from withholding tax; capital gains tax (CGT) and stamp duties.

C. International Tax Matterss

The Income Tax Act Cap.15.02 deals with the following: residents with foreign investments, the charge to tax, exemptions re foreign pensions and exemptions re distributions from companies.

'Expatriates', persons resident but not having a permanent place of abode in St Lucia, are addressed in this Act. There is also provision in International Business Companies Act 1999 for relief from income tax for expatriates working in the financial services industry.

Non-residents are not taxable in St Lucia other than being subject to withholding tax on payments made to them from a St Lucia source. There are a number of exceptions to this rule, including payments by way of dividends, lease, premium or licence, annuities or other periodic payments.

St Lucia has only one double tax treaty. This treaty, between the Caribbean territories, is referred to as The CARICOM Double Taxation Agreement.

D. Taxation Of Trusts

The following unique characteristics apply to the taxation of trusts:

  • international trusts: settlors and beneficiaries are exempt from income tax unless they are resident in St Lucia, and
  • trusts (domestic, international, and where the trustee is a registered trustee or an IBC): provisions of the Income Tax Act do not apply to the property of the trust, the non-resident settlors or the beneficiaries, provided that the income or gains do not arise in St Lucia and the property is not situated in St Lucia. (Property situated in St Lucia is defined to exclude shares, rights and property of an IBC, and dividends, distributions or transfers from an IBC.)

There appears to be legislative intent to focus on a source-based taxation approach with respect to trusts and trusts property while allowing the use of IBCs under trusts in tax structures.

E. Taxation Of Estates

There are no estate taxes, gift taxes or taxes on death.

F. Other Taxes

There is no value added, sales or capital gains tax. There is, however, stamp duty on the transfer of property (Stamp Duty Ordinance Cap 219, as amended). Non-nationals are also subject to an aliens licence on the acquisition of property (Aliens Licensing Act 2002).


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