VAT, GST and Sales Tax in Saint Martin

Summary

Name of the tax Revenue tax (RT)
Local name Belasting op bedrijfsomzetten
Date introduced 1-Jan-97
Trading bloc membership None
Administered by Inspectie der Belastingen
RT rates
Standard 5%
Other Exempt
RT number format 4XX.XXX.XXX (9 digits)
RT return periods Monthly (annually on request)
Thresholds None
Recovery of RT by non-established business No

Scope of the tax

The Revenue Tax (RT) applies to the following transactions:

  • Delivery of goods or services by a local business in the course of its business in Sint Maarten
  • Delivery of goods or services in Sint Maarten by a foreign busi­ness in the course of its business

Who is liable

A business entity or an individual who delivers goods or per­forms services (engages in taxable activities) in Sint Maarten. In principle, the business performing the services or delivering the goods is liable for RT.

Effective from 11 February 2011, the definition of a business was broadened. A person who manages an asset to obtain revenue from the asset on a permanent basis also qualifies as a business.

For example, leasing of real estate located in Sint Maarten became subject to RT, unless an exemption applies. The business realizing the revenue is liable to RT.

Before the amendments in 2011, the place of services provided by a nonresident business was the place where the services were performed. The nonresident business providing the services was required to remit the RT. Effective from 11 February 2011, for RT purposes, the place of services provided by a nonresident busi­ness is now where the services are enjoyed instead of where the services are performed. In principle, the nonresident business who provides the services must pay the RT on these services.

Non-established businesses. A “non-established business” is a business that does not have a fixed establishment in Sint Maarten. A non-established business may become liable for RT and accordingly become subject to registration if a permanent estab­lishment is deemed to be present in Sint Maarten. Sint Maarten law does not provide a definition of a permanent establishment.

If goods are delivered by a non-established business and if these goods must be transported for delivery, the place where the trans­portation originates is considered to be the place of delivery. In other cases, the place of delivery of goods is considered to be the place where the goods are physically located at the moment of delivery.

Special rules apply to E-zone companies, offshore companies and offshore banks.

E-zones. E-zone companies are not liable for RT on their supplies of services or goods to nonresidents.

Offshore companies and offshore banks. Companies and banks that are taxed under the so-called offshore tax regime and hold a foreign-exchange license are generally not liable for RT, because they are excluded from the definition of a business to the extent that these companies conduct offshore activities. The offshore regime is grandfathered up to and including the year 2019.

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

Tax representatives. A taxpayer may be represented by a third party based on a power of attorney.

Registration procedures. In general, a taxable entity that begins taxable activities must register with the Inspectorate of Taxes by completing an online registration.

Late-registration penalties. In general, a business that begins to perform taxable activities must register with the Inspectorate of Taxes. No specific deadline for registration is imposed. In addi­tion, no specific penalty for late registration is imposed. However, if the late registration results in the late payment of RT or the late submission of RT returns, penalties may be imposed.

Reverse-charge mechanism. The nonresident business who pro­vides services must in principle pay the RT on these services. For this purpose, a non-established business is deemed to have cho­sen domicile at the office of the Inspectorate of Taxes.

However, a business resident in Sint Maarten for whom the ser­vices are performed must pay the RT if the nonresident business does not report and remit RT on such services. The business resident in Sint Maarten could be held liable for RT not remitted by the nonresident entrepreneur. To avoid noncompliance, the nonresident business and the business resident in Sint Maarten can file a joint request to apply the reverse-charge mechanism, and the business resident in Sint Maarten declares and pays RT.

Digital economy. RT legislation does not specifically mention any regulations in connection with the digital economy.

Deregistration. To deregister with the Inspectorate of Taxes, a taxpayer should provide proof of deregistration as issued by the Sint Maarten Chamber of Commerce and some additional docu­mentation. The deregistration with the Inspectorate of Taxes should be completed once all tax filing and payment obligations have been met by the taxpayer.

RT rates

The term “taxable supply” refers to a supply of goods and ser­vices that are liable to RT. The term “revenue” refers to all pay­ments that the business receives for the delivery of goods or services in the course of its business, excluding interest.

The standard RT rate of 5% applies to revenue realized from the delivery of taxable supplies, unless a specific measure provides for an exemption.

The term “exempt supply” refers to a supply of goods and ser­vices that are not liable to RT.

Examples of exempt supplies of goods and services

  • Medical services
  • Basic necessities such as bread, milk and sugar
  • Water and electricity services
  • Transportation services
  • Betting and gaming (casino)
  • Postal services
  • Lease of real estate that is equipped and designated for perma­nent residence, to individuals who are residents of Sint Maarten

Exports. Revenue realized from supplies of exported goods by an “export business” is exempt from RT. However, to qualify for an RT exemption, exports must be supported by evidence that con­firms that the goods have left Sint Maarten.

An “export business” is a business that realizes 50% or more of its total revenue by exporting goods outside Sint Maarten.

Option to tax for exempt supplies. RT legislation does not spe­cifically mention any regulations in connection with the option to tax exempt supplies.

Time of supply

The time when RT becomes due is called the “time of supply.” The basic time of supply is when the payment for a taxable sup­ply is received.

Alternatively, on request, the time of supply occurs on the date on which the invoice is issued. In Sint Maarten, an invoice must be issued within 15 days following the end of the month in which the supply or service is performed.

Imported goods. RT legislation does not specifically mention any regulations in connection with imported goods.

Recovery of RT by taxable persons RT may not be recovered in Sint Maarten.

Recovery of RT by non-established businesses RT may not be recovered in Sint Maarten.

Invoicing

RT invoices and credit notes. A business must provide an invoice for all taxable supplies made, including exports.

Taxable businesses must retain copies of invoices for 10 years.

If a business issues a credit note, the amount mentioned on such credit note can be deducted from the revenue of the period during which the credit note is issued, provided that the amount indi­cated on the credit note has not yet been received or, if the amount has been received, such amount will be repaid within a month after issuance of the credit note.

Foreign-currency invoices. RT legislation does not specifically mention any regulations in connection with invoices to be issued in foreign currency.

Electronic invoices. The issuance of electronic invoices is allowed.

Proof of export. To qualify for the RT exemption applicable to the export of goods, the business must avail itself of documents that prove the goods have left Sint Maarten. This documentary proof consists of all of the following:

  • A copy of the issued invoice with certain specifications
  • A proof of payment
  • Transport documentation evidencing that the goods have left the levy territory
  • A copy of documentation from authorities in the country of destination evidencing that the goods have reached their desti­nation

RT returns and payment

RT returns. RT returns are generally submitted for monthly peri­ods. However, if certain circumstances exist, the tax authorities may allow annual periods upon request of a business, such as a person who manages an asset to obtain revenue from the asset on a permanent basis. Returns must be filed and RT due must be paid by the 15th day of the month following the end of the report­ing period. The RT due over the period must be remitted with the return.

Penalties

RT penalties are assessed for the late submission of an RT return or for the late payment of RT, in the following amounts:

  • For the late submission of an RT return, the maximum fine is ANG2,500.
  • For the late payment of RT, fines ranging from 5% to 15% of the amount of the additional assessment may be imposed, with a maximum fine of ANG10,000.
  • For a late payment caused by negligence or dishonest conduct, fines ranging from 25% to 100% of the RT payable may be imposed.

Criminal penalties may also apply in certain circumstances, such as in cases of fraudulent conduct.