An individual resident in St. Lucia for tax purposes is subject to income tax on worldwide income, regardless of whether the income is remitted to St. Lucia. An individual who is resident but not ordinarily resident is subject to tax on income received in St. Lucia. Nonresidents are taxed on income derived from sources in St. Lucia only.
Individuals are considered resident if they are physically present in St. Lucia for at least 183 days in a calendar year or if they are ordinarily resident in St. Lucia in a calendar year. Individuals are deemed to be ordinarily resident if they have a permanent home in St. Lucia and if they are physically present in St. Lucia for some time period in the income year. This time period is determined at the discretion of the Minister of Home Affairs on application for ordinarily resident status. An individual may also be deemed to be resident in St. Lucia if he or she is physically present in St. Lucia for a period of at least 183 consecutive days across two calendar years.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Taxable remuneration from employment includes salaries, wages, commissions, bonuses, directors’ fees, gratuities, pensions and leave pay. In general, employees may be taxed on any benefit that is not conferred wholly, exclusively and necessarily for the performance of duties relating to their employment. For example, the total value of a rent-free residence is included in the employee’s taxable income. Amounts paid as a housing allowance are also fully taxable. A company car provided to an employee is subject to tax on 15% of the cost of the car when it is purchased locally or imported. If the vehicle is leased, the employee is subject to tax on 40% of the annual cost of leasing.
Educational allowances provided by employers to their employees’ children are fully taxable for income tax and social security purposes.
Self-employment income. Taxable profits from self-employment generally consist of business profits, as disclosed in the business operation’s financial statements, subject to various tax adjustments. Income tax is imposed on net business income.
Investment income. A resident’s investment income, other than dividends, is aggregated with other income and taxed at the rates set forth in Rates.
Dividends are not subject to tax in St. Lucia. Interest received by resident individuals is aggregated with all other taxable income and taxed accordingly.
All royalties received are aggregated with other income and subject to tax at the rates set forth in Rates.
A final withholding tax at a rate of 25% is imposed on domestic royalties, commissions, premiums and management fees paid to nonresidents. Domestic interest paid to nonresidents is subject to a final withholding tax at a rate of 15%.
Taxation of employer-provided stock options. Employees are taxed on income arising on the purchase of shares acquired under a stock option plan. The benefit is taxed in the same manner and at the same rates as other employment income. No distinction is made between qualified and non-qualified stock option plans.
Capital gains. Capital gains are not subject to tax, and capital losses are not deductible.
Personal deductions and allowances. For 2016, residents are entitled to the deductions and allowances listed in the following table.
|Type||Maximum deductible amount|
|Dependent spouse allowance||XCD1500|
|Dependent allowance||XCD1000 (a)|
|Registered retirement contributions by an individual||Lower of 1/10 of assessable income and XCD8000|
|Premiums paid by an individual to a local life insurance company for a policy on the life of the individual and/or his or her spouse and children||Lower of 1/10 of assessable income and XCD8000|
|Premiums paid by an individual to a life insurance company not doing business in St. Lucia||Lower of 1/20 of assessable income and XCD3000 (b)|
|Shares in a cooperative||XCD5000 (c)|
|Shares in a public company||XCD5000 (c)|
|Student loan interest||XCD3000|
|Mortgage interest||Up to XCD18000 (d)|
|Home insurance||All evidenced premiums|
|Land tax||All evidenced tax paid|
|Gifts for certain approved purposes||25% of assessable income (e)|
a) This allowance can range from XCD1,000 to XCD5,000, depending on whether the child is over the age of 10 years and on whether than child is a university student during the income year.
b) This deduction is allowed with respect to 50% of the premiums paid.
c) A deduction is allowed based on the value of the shares, up to a maximum of XCD5,000.
d) This deduction is allowed with respect to an owner-occupied dwelling house only.
e) This deduction is allowed with respect to deeds of covenant to religious, charitable, medical, sporting or educational institutions or bodies.
Nonresidents may not claim the above deductions and allowances.
Business deductions. Any expenses incurred wholly and exclusively for the purpose of producing taxable business income are deductible.
Rates. The following tax rates apply to taxable income for 2016.
|Taxable income||Tax on lower||Rate on|
Nonresidents are taxed at the same rates as residents except for interest, royalties and management fees, which are subject to withholding taxes (see Investment income).
Relief for losses. Business losses may be carried forward six years and offset against income arising in those years. The offset is restricted to 50% of chargeable income. Losses may not be carried back.
Stamp duty. Stamp duty is levied on all transfers of real estate, personal property and shares, except for shares traded on the St. Lucia securities exchange.
For real estate transfers by citizens of St. Lucia or a local company, the following are the stamp duty rates:
- 2% of the value of the property is payable by the purchaser.
- 5% of the value of the property is payable by the vendor if the value is from XCD50,000 to XCD75,000.
- 5% is payable by the vendor on property valued from XCD75,001 to XCD150,000.
- 5% is payable by the vendor on property valued over XCD150,000.
For real estate transfers by non-citizens or foreign companies, the following are the stamp duty rates:
- 10% of the value of the property is payable by the foreign vendor.
- 2% of the value of the property is payable by the purchaser.
The transfer of personal property is subject to stamp duty of 2% of the value of the property. The transfer of shares is subject to stamp duty at a rate of 0.5% of the total net assets of the company.
Estate and gift tax. St. Lucia does not levy estate and gift tax.
Contributions. Contributions to the national insurance scheme must be made at the following rates on maximum monthly insurable earnings of XCD5,000:
- Employees: 5%
- Employers: 5%
- Self-employed persons: 10%
Totalization agreements. St. Lucia has entered into social security totalization agreements with Canada and the Caribbean Community and Common Market (CARICOM) to provide relief from double social security taxes and to assure benefit coverage.
Tax filing and payment procedures
Resident and nonresident individual taxpayers must file income tax returns by 31 March following the income year, which ends on 31 December. Self-employed persons must file returns, regardless of the amount of their taxable income.
Tax on employees normally is collected through the Pay-As-YouEarn (PAYE) system.
Married persons are taxed separately, not jointly, on all types of income.
Double tax relief and tax treaties
Double tax relief is provided for foreign taxes paid to British Commonwealth countries.
St. Lucia has entered into a tax treaty with the other CARICOM countries.
In general, visas are not required to enter St. Lucia, except for visitors from certain countries, including India and African countries. Visitor visas, which are also called temporary visas and extensions of stay, are issued to individuals who want to extend their stays in St. Lucia or to cover the waiting period while another type of visa is being processed. Visitor visas are also issued to spouses of work permit holders.
Work permits and self-employment
Foreign nationals employed by companies in St. Lucia must obtain work permits. Work permits allow individuals to reside and work in St. Lucia. No quota system exists for issuing work permits; each application is evaluated on its own merit. To approve a work permit application, the government must be satisfied that no suitable St. Lucian can fill the vacancy.
Work permits are non-transferable. If a work permit holder leaves the employer, the work permit is canceled. The employer should inform the Ministry of Labour Relations that the employee has left the company.
Applicants may not work while their work permit applications are being processed.
Work permit holders should renew their work permits at least two months before expiration. A person who has obtained a residence permit is still required to apply for a work permit.
Individuals can apply for permanent residence after a period of two years of continuous residence in St. Lucia. This period may be significantly reduced in certain circumstances, such as when retirees purchase property and take up residence.
The advantage of having this status is that the individual’s passport is stamped with the permanent residence stamp, which obviates the application for residence permits every three months.
This status does not entitle the permanent resident to work in St. Lucia; a work permit is still required.
No quota system exists for issuing residence permits; each application is evaluated on its own merit.
Family and personal considerations
Family members. Spouses and dependents of working expatriates must obtain their own work permits to be employed in St. Lucia. Spouses or dependent children who do not intend to work are allowed to reside in St. Lucia after they are listed on the work permit of the expatriate.
Marital property regime. St. Lucia does not have a community property or similar marital property regime.
Forced heirship. The succession laws of St. Lucia provide that a surviving spouse is entitled to one-third of the estate of the deceased spouse, unless the surviving spouse elects not to claim this right. Parents are not required to leave any part of their estate to their children unless the children are minors (under 18 years of age); in such case, sufficient provisions must be made for the maintenance of the children.
Driver’s permits. Holders of work permits who possess valid driver’s licenses in their home countries are excused from taking the written examination and driving test.
Temporary driver’s permits are also available to visitors of St. Lucia. These permits are generally valid for a period of three months.