Levy laws can be confusing and overwhelming, especially for those who are not well versed in them. However, comprehension the levy scheme is decisive, especially if you dwell or do business in St Kitts and Nevis.
Personal Taxes in St. Kitts and Nevis
There are no levies on revenue, inherited property on the islands. This applies to both residents and non-residents.
A 15% levy is charged on dividends, which are provided to non-residents from sources in the islands. For instance, this could be one of the firms incorporated in the state.
There is no such St Kitts tax for residents. If a financier has moved to the islands, acquired tax residency status and established a firm, no tax will be due on dividend payments.
Societal deductions from salaries are levied at 5%.
St Kitts and Nevis taxes for business
Financier establishes LLC or global organisations on the islands. The latter may only co-operate with external associates.
Company levy, which is levied on the gains of the company, is 33%. Resident firms pay the levy on all gains. Non-residents pay levy solely on gains earned through transactions on the islands.
Until July 2022, it was possible to minimise the revenue levy to 25 per cent. The CFR programme was available for this purpose. To obtain information on the conditions under which the levy was reduced, it was necessary to contact the IRD.
Certain organisations could be liberated from tax payments for up to 15 years. This applies to firms co-operating with external associates. Yet for resident firms, the revenue levy can be minimised to 1% or substituted by a licence charge.
Value Added Tax (VAT)
People who sell products and favours add VAT to the price. With some exemptions, the basic rate is 17%. A 10% tax rate is applied to services provided by hotels and catering establishments, as an illustration. Meal, figs, bakery items, sugar and milky cereals and oats are exempted from taxation. Certain favours are eligible for zero rates. No tax is levied on assurance, water-supply or educative benefits for instance. In addition, firms providing access to electric power are exempt from paying VAT. 0% is the tax rate for majority health favours.
The variance betwixt VAT 0% and no tax is the possibility of refunding the tax charge for products that were procured for the business. If a 0% rate applies to the products a firm sells, VAT can be refunded. If there is no taxation, a refund is not available.
Only those companies that sell at least EC$150,000 worth of products per year must register as a VAT payer. All other organisations do not need to record. However, VAT refunds on procures will not be available.
A 15% holding levy is charged if a non-resident firm gets dividends on islands. Businesses yet pay a levy when making transactions to external branches.
Employees must pay a levy equal to 6% of their wages.
Property taxes
From 6-10%, an emblematic fee is charged for the sale of immovable property. Different factors, including the location of the property determine its exact tax rate. The seller has to pay the levy. Purchasing immovable property requires a licence to be purchased by foreigners, which grants them the right to own a plot of land. Licence, which costs 10% of the price. It is not the case for those who invest in real estate to become citizens and comply with this rule.
2 parts constitute the tax on immovable property. Taxes on both the land and structure based on it. Island levies are based on the nature of the property. The island of Nevis imposes the highest taxes on commercial immovable property and housing land. And the price of it, depending on how much to pay for the property. This number, which is determined by IRD experts using data on property prices.
It does not impose tax on farming or educative estates and institutional estates. Certification is mandatory, otherwise payment of ground area and structure taxes will be required.
The rates of ground area and structure levies on estate in St Kitts and Nevis are as follows:
| Sort of immovable estate | St Kitts tax, % | Levy rates on the isle of Nevis, % |
| Hotels | 0.2 for structure, 0.2 for ground area | 0.3 for structure, 0.2 for ground area |
| Living estate | 0.2 for structure, 0.2 for ground area | 0.156 for structure, 0.75 for ground area |
| Business facilities | 0.3 for structure, 0.3 for ground area | 0.3 for structure, 0.2 for ground area |
Other properties on the isle of Nevis are subject to the following rates:
- farming buildings – 0.3%;
- farming ground area – 0.2%;
- institutional buildings – 0.2%;
- institutional ground area – 0.15%.
These properties are not taxed in St. Kitts.
Benefits of St Kitts and Nevis tax system
To encourage foreign investment and entrepreneurship, St Kitts and Nevis has signed several tax treaties to prevent double taxation. The country’s tax system offers incentives such as low corporate tax rates and no inheritance or estate taxes.
In keeping with its commitment to international tax transparency initiatives such as CRS and BEPS, it is highly recommended to consult a local tax expert to ensure compliance with all relevant St Kitts and Nevis laws and regulations.
To simplify the process of paying taxes, small businesses and self-employed individuals must adopt simplified taxation. The new system eliminates complex tax forms and record keeping, instead using a percentage of gross sales or receipts to determine taxes due. It is a useful system for people with limited resources as it can save both time and money.
Simplified tax in St Kitts and Nevis has much to offer taxpayer. As a result, it reduces the tax compliance burden for small businesses and the self-employed, making the process simpler for them to meet their obligations. Foreign investment can benefit from this and it contributes to the economic growth of a country that has multiple double tax agreements with other countries. Additionally, simplified tax laws promote greater transparency and decrease tax evasion, leading to more efficient tax collection and benefits everyone. Offering VAT for LLCs and IBCs, St Kitts and Nevis aims to assist its business community.
St. Kitts and Nevis has a simplified VAT system that includes the individual revenue levy, company revenue levy, and VAT. St. Kitts and Nevis have a progressive structure in which the percentage of income paid decreases as the level of taxpayer income decreases due to the personal revenue levy. Compared to other nations, the St Kitts and Nevis region has lower company revenue levy rates, making it a more attractive location for businesses seeking lower taxes. In St Kitts and Nevis, VAT is levied on all purchases made within its borders, except for those that are exempt from tax.
To be eligible for simplified tax assessment in St Kitts and Nevis, a natural person must have an annual income of less than $200,000 and file a tax return by 30 April using the simplified tax return. By selecting this option, taxpayers can pay tax in two ways. Those who earn more than EC$200,000 annually must file under the customary tax regime.
Simplified Taxation has been introduced to streamline tax filing, decrease administrative burden on taxpayers and provide a more efficient and effective means for the government to collect revenue in St Kitts and Nevis. Taxpayers may choose to use simplified taxation due to the potential benefits of reduced paperwork, fewer compliance requirements, and lower expenses during tax preparation.
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