Saint Kitts and Nevis taxes for individuals and companies

Receiving dividends from companies in St Kitts and Nevis, transactions related to registration of real estate ownership and business profits are taxed in the country. Investors who obtain St Kitts and Nevis citizenship are not required to pay taxes in the country by default.

For calculating some taxes, it is essential whether an individual or legal entity is a tax resident of the country.

Tax residents of St Kitts and Nevis are people who live there more than 183 days a year. A company is considered a resident if registered in the country or managed from its territory.

All about St Kitts and Nevis

Non-residents are foreign companies and people who do not reside in the country — even if they are citizens of St Kitts and Nevis.

Thresholds for certain taxes and penalties for late returns are calculated in the country’s official currency, East Caribbean Dollars (EC$). Its exchange rate is pegged to the US dollar. One East Caribbean dollar is 37 US cents.

There is no income or inheritance tax in St Kitts and Nevis for both residents and non-residents.

Withholding tax at the rate of 15% must be paid from dividends, interest and royalties paid to non-residents from sources in St Kitts and Nevis — for example, from companies registered in the country.

There is no such tax for residents of the country. If an investor moves to the islands, obtains tax resident status and registers a company, his dividends are not taxed.

Social contributions from wages are paid at the rate of 5%.

Investors register a limited liability company (LLC) or an international business company (IBC) in St Kitts and Nevis. International companies can only work with foreign partners.

Corporate tax is paid on a company’s profits at 33%. Resident companies of St Kitts and Nevis pay tax on all profits and non-residents — only on those they received from operations in the country.

Until June 30th, 2022, companies can reduce their income tax rate up to 25% under the Covid Fiscal Reliefs program. Contact the Inland Revenue Department (IRD) for the terms of the tax reduction.

Some companies may be exempt from taxes for up to 15 years, for example, if they work with partners abroad. In addition, for resident companies, income tax can be reduced to 1% or replaced by a license fee.

VAT, or Value Added Tax for goods and services in St Kitts and Nevis, is included in prices. The standard rate is 17%, but there are some exceptions.

A rate of 10% applies to hotel and restaurant services. Zero VAT rate applies to some goods: for example, flour, rice, sugar, milk, oats and bread.

Some goods and services are not subject to VAT: for example, insurance, water supply, electricity, educational services, and most medical services.

The difference between a zero rate and no taxation is the ability to recover VAT on goods purchased for the business. If a zero rate applies to a product traded by a company, you can apply for a VAT refund, but you cannot if the service or product is not subject to VAT.

Only companies that sell or are going to sell goods and services for 12 months in the amount of EC$150,000 are required to register as VAT payers. Others do not need to register. But, at the same time, they can’t return VAT on purchases.

Withholding tax at a rate of 15% is levied if a non-resident company receives income — dividends, interest, royalties — from sources in St Kitts and Nevis. In addition, companies pay tax on transfers to foreign affiliates.

Social contributions for employees are 6% of salaries.

When selling property, stamp duty is paid at 6 to 10%. The rate depends on several factors, such as the object’s location. The seller pays the fee.

When buying real estate, foreigners acquire a license to own land at 10% of the object’s value. However, this rule does not apply to the investors who buy property to participate in St Kitts and Nevis citizenship program.

Examples of properties in St Kitts and Nevis

St Kitts & Nevis, Frigate Bay

$325,000 — $4,000,000

Share in a villa and apartments in a luxury hotel complex

58 m² — 426 m²

1—3

1—4

St Kitts & Nevis, Basseterre

$2,575,000+

Villa with pool in a landscaped park

379 m²

4

4

St Kitts & Nevis, Basseterre

$200,000 — $495,000

Turnkey apartments in a residential complex with ocean views

186 m²

3

Property tax consists of two parts: land tax and building tax. Rates depend on the type of object and the island — the highest are for commercial real estate and residential land on Nevis island. The tax base is the real estate value calculated by IRD specialists based on data on prices for objects in the area.

Agricultural, educational and institutional properties on St Kitts are exempt from property taxes. They must be certified. It is impossible to stop paying taxes on land and buildings without this procedure.

Individuals in St Kitts and Nevis are exempt from income tax, so they do not file a tax return.

Companies are required to report profits within 3.5 months of the end of their financial year. All companies registered in St Kitts and Nevis must file a tax return or have a representative office there, even if there were no transactions during the year.

Corporate tax is paid in installments by quarters of the calendar year: until March 15th, June 15th, September 15th and December 15th. As a rule, each contribution is a quarter of the tax from the declaration, but the tax officer can determine other proportions.

The penalty for late submission of the declaration is 5% of the tax amount and another 1% for each month of delay. Interest on overdue payments is charged at a rate of 12% per annum, starting from the date of filing the declaration.

Withholding tax is paid quarterly: March 15th, June 15th, September 15th and December 15th.

Double tax agreements (DTAs) allow people and companies that receive income from abroad not to pay taxes at full rates in both countries. Tax rates depend on the terms of a particular agreement.

St Kitts and Nevis has a tax agreement with the countries of the Caribbean Community (CARICOM). DTAs have also been signed with other states, such as the UK, the USA, Switzerland, Canada, Denmark and Norway.

St Kitts and Nevis tax treaties with other countries.

St Kitts and Nevis uses the CRS standard to exchange tax information with other countries. The islands also transfer data to the United States on the assets of American taxpayers under FATCA.

CRS is a standard developed by the Organization for Economic Co-operation and Development. It is intended to exchange information between the tax authorities of different countries and helps to combat tax evasion.

Top 5 banks in St Kitts and Nevis for investors

More than 100 countries use these standards, including the European Union, the United Kingdom, Canada, and Russia.

Under the CRS, countries exchange information about accounts: to whom the account is registered, in which bank and under what number, what are the account balance and capital gain.

FATCA is The Foreign Account Tax Compliance Act, which gove s the transfer of data about assets of US taxpayers in other countries.

As part of FATCA, St Kitts and Nevis submits information about accounts and other assets of US citizens and residents to the US Internal Revenue Service.

St Kitts and Nevis citizenship by investment program is the oldest in the world: it has been operating since 1984. More than 20,000 investors have already received the country’s passport.

The procedure for obtaining a passport is remote — an investor does not need to come to the country before or after obtaining citizenship. Usually, obtaining citizenship takes from two months to six months.

Investors can choose one of three options:

• from $250,000 — a non-refundable contribution to the state fund;

• from $250,000 — an investment in approved public benefit projects;

• from $325,000 — an investment in real estate with the ability to sell it in 7 years.

In February 2022, the country’s government added another real estate investment option — purchasing shares in social and infrastructure facilities.

In the citizenship application, an investor can include a spouse, parents over 55 years old, children. The requirement for all applicants, except for the spouse, is full financial support from the investor.

The amount of investment in the state fund depends on the family’s composition. To participate in the program, the investor pays state fees and duties. Their amount also depends on the number and age of relatives.

St Kitts and Nevis сitizenship gives the investor several opportunities: to travel without visas to 156 countries of the world, obtain a tourist visa to the United States for ten years, facilitate doing business abroad, and optimise taxes.