VAT, GST and Sales Tax in Saint Lucia

Summary

Name of the tax Value-added tax (VAT)
Date introduced 1-Oct-12
Trading bloc membership CARICOM
Administered by Inland Revenue Department, VAT Section
VAT rates
Standard 15%
Reduced 9.5% (hotel accommodation)
Other Zero-rated and exempt
VAT number format 123456-7
VAT return periods Monthly
Thresholds
Registration XCD400,000
Recovery of VAT by non-established businesses No

Scope of the tax

VAT applies to the supply of goods and services by a taxable person in Saint Lucia and to the importation of goods and ser­vices.

Who is liable

The Saint Lucia VAT Act imposes a registration requirement on any person in Saint Lucia whose total value of taxable supplies exceeds XCD400,000 during a period of 12 or fewer months.

A person that expects to make taxable supplies in excess of XCD400,000 at the beginning of any period of 365 calendar days shall also apply for VAT registration in Saint Lucia.

Registration procedures. Taxpayers are required to register with the Saint Lucia Inland Revenue Department and are required to provide the incorporation documents of the entity being regis­tered. The location is as follows:

Inland Revenue Department

VAT Section

Manoel Street

Castries

Saint Lucia, W.I.

Group registration. VAT grouping is not allowed under the Saint Lucia VAT law. Legal entities that are closely connected must register for VAT individually.

Reverse charge. The import of a taxable service is subject to VAT in Saint Lucia, subject to certain criteria.

Tax representatives. Where a corporation fails to pay an amount of tax required, the persons who were directors at the time the corporation was required to pay such are jointly and severally liable, together with the corporation, to pay the amount and any interest or penalties attaching to such amount.

Late-registration penalties. A person who does not register within the time required by the Act is subject to a penalty of double the output tax payable by that person from the time at which they were required to register to the time of late registration.

Digital economy. No special rules apply.

VAT rates

The term “taxable supply” refers to a supply of goods and ser­vices in Saint Lucia in the course or furtherance of a taxable activity. Taxable supplies include supplies at the zero rate.

In Saint Lucia, the following rates of VAT apply:

  • Standard rate: 15%
  • Reduced rate: 9.5% (on hotel accommodation)
  • Zero rate: 0%
  • Other: exempt

The 15% standard rate applies to most supplies of goods or ser­vices. The 9.5% rate applies to the supply of hotel accommoda­tion. The First Schedule of the VAT Act lists the goods and services that are zero-rated.

Examples of zero-rated goods and services

  • Exported goods and services
  • Certain staple foodstuffs
  • Fuel
  • Goods supplied by licensed duty-free shop operators

The term “exempt supply” refers to a supply of goods and ser­vices that is not liable to VAT. Persons who make exempt supplies are not required to register for VAT, and they are not permitted to recover any input tax incurred in making those exempt supplies (see Section F). The Second Schedule of the VAT Act lists goods and services that are exempt from VAT. The Third Schedule lists imports that are exempt from VAT.

The following lists provide some examples of exempt and zero-rated supplies of goods and services.

Examples of exempt supplies of goods and services

  • Financial services
  • Medical services
  • Education services
  • Residential property sales
  • Transportation services
  • Betting and gaming

Examples of exempt imports

  • Goods shipped or conveyed to Saint Lucia for transshipment to another country
  • Goods imported by nationals returning home for permanent residence in specified categories
  • Capital goods where specific conditions are met
  • Goods and services imported during a disaster alert or emer­gency that are not for resale

Option to tax for exempt supplies. Not applicable.

Time of supply

The time when VAT becomes due is called the “time of supply.” In general, the time of supply for goods and services supplied by a taxable person is the earliest of the following events:

  • The date of issuance of the invoice by the supplier
  • The date on which any consideration is received for the supply
  • The date on which the goods are made available to the recipient or the services are performed

A taxable person must account for VAT in the VAT period in which the time of supply occurs, regardless of whether payment is received.

Deposits and prepayments. Not applicable.

Imported goods. VAT is payable on the importation of taxable supplies.

Recovery of VAT by taxable persons

The VAT paid by a registrant is recoverable as input tax if it relates to goods and services acquired for the purposes of making taxable supplies. Input tax is recovered by offsetting it against output tax (that is, tax charged on supplies made) in the VAT return for each VAT period.

Goods or services are deemed to be for the purpose of making taxable supplies if the supplier acquired, imported or produced the goods or services for any of the following purposes:

  • Their supply or re-supply as a taxable supply
  • Their consumption or use (whether directly or indirectly, wholly or partly) in producing goods or services for supply as a taxable supply
  • Their consumption or use (whether directly or indirectly, wholly or partly) with respect to a commercial enterprise

Where the total amount of input tax deductible by a registrant exceeds the output tax for that VAT period, the excess is carried forward to the next tax period and treated as input tax deductible in that period. If any of the excess remains after being carried forward for three consecutive VAT periods, the registrant may file with the tax authorities a claim for a refund of the amount remaining.

Nondeductible input tax. Input tax may not be recovered on pur­chases of goods and services that are not used for business pur­poses.

Examples of items for which input tax is nondeductible

  • Personal vehicles
  • Fees for memberships in recreational clubs

Examples of items for which input tax is deductible
(if related to a taxable business use)

  • Business entertainment
  • Travel expenses

Partial recovery. The Saint Lucia VAT law states that if all the supplies made by a taxable person during a tax period are taxable supplies, the input tax incurred in the period is deductible in full. However, if some, but not all, of the supplies made by the person during the tax period are taxable supplies, a partial recovery cal­culation is required.

The amount of recoverable input tax is calculated based on the ratio of the value of taxable supplies made during the period compared to the total value of supplies (taxable plus exempt) made during the period.

Preregistration costs. There is no provision for persons to claim VAT incurred on costs prior to registration.

Refunds. If the amount of input VAT recoverable in a VAT period exceeds the amount of output VAT payable for that VAT period, the excess may be refunded, provided that all VAT returns due have been submitted and the credit has been carried forward for three consecutive months. A refund can be applied for with the Comptroller of Inland Revenue Department by submitting a completed VAT Form 004. The Inland Revenue Department will verify all refund requests and issue refunds at the end of the fol­lowing month if no audit is required. Excess credits can also be utilized to clear off any other tax liability.

Recovery of VAT by non-established businesses

Foreign businesses that make commercial supplies in Saint Lucia may register and recover tax with respect to their local operations in the same manner as resident businesses. Where the business is not registered for VAT in Saint Lucia, it will be unable to recover VAT.

Invoicing

VAT invoices and credit notes. A taxable person must provide a tax invoice for all taxable supplies made to registrants. A tax invoice is necessary to support a claim for input tax deduction.

A credit note or debit note must be issued when the quantity or consideration shown on a tax invoice is altered. Credit and debit notes must contain broadly the same information as a tax invoice.

Electronic invoicing. There are no separate requirements for elec­tronic invoices.

Proof of exports. VAT is charged at a rate of 0% on supplies of exported goods. However, to qualify as zero-rated, exports must be supported by evidence that confirms the goods have left Saint Lucia.

Foreign-currency invoices. Where an invoice is expressed in a cur­rency other than Eastern Caribbean dollars (XCD):

  • In the case of imports, the amount is to be converted at the exchange rate as determined by the Customs (Control and Management) Act
  • In all other cases, the amount is to be converted at the exchange rate applying between the currency and the Eastern Caribbean dollar at the time the amount is taken into account.

VAT returns and payment

VAT returns. The VAT period in Saint Lucia is the calendar month. The VAT return must be filed within 21 calendar days after the end of the tax period. Any tax due for the period must be remitted with the return.

Penalties

Any VAT payable outstanding by the due date is liable to a pen­alty equal to 10% of the amount payable. Interest is charged at the rate of 1.25% per month or part of a month for the period the tax remains unpaid.

A person who for two or more VAT periods fails to file returns within the specified time and manner is liable on summary con­viction to a fine not exceeding XCD50,000 or to imprisonment for a term not exceeding three years or to both.