Antigua and Barbuda tax system guide

Tax rates depend on the tax residency of payers.

Individuals become Antigua and Barbuda tax residents if they:

• legally reside in the country for at least 183 days a year;

• have a registered address;

• carry out social, economic, or cultural activities in Antigua and Barbuda.

Staying in Antigua and Barbuda legally for more than 183 days is possible if you have residence permit or citizenship.

Foreigners can obtain Antigua and Barbuda citizenship by investing in the country’s economy. The minimum investment amount is $100,000. Investors can choose one of four options: contributions to a state or university fund, real estate purchases or business investments.

Vladlena Baranova,

Head of Legal & AML Compliance Department, CAMS, IMCM

The Antigua and Barbuda passport does not automatically make the holder a tax resident. To become one, a citizen must live in the country for more than 183 days a year.

Legal entities become tax residents if they are registered and managed in Antigua and Barbuda.

Non-residents could be individuals and legal entities. They pay taxes in Antigua and Barbuda if they have income sources in the country.

Tax collection and enforcement of the Tax Administration and Procedure Act is the Inland Revenue Department’s (IRD) responsibility of the Antigua and Barbuda Ministry of Finance.

The IRD levies taxes on:

• individuals,

• trusts,

• corporations and partnerships,

• companies,

• state-run enterprises,

• and the Barbuda Council.

Antigua and Barbuda tax residents do not pay taxes on wealth, inheritance and capital gains. For example, the income tax rate can reach 45% in Germany and the UK. In Canada, tax residents pay 29% of income tax.

The tax is levied on the purchase of real estate and land. Foreigners who buy property in the country pay a licence fee. But foreign investors who obtain Antigua and Barbuda citizenship by investment do not pay it.

There is a flat corporate tax rate of 25%. A reduced corporate tax rate of 10% is fixed for commercial banks, insurance, oil and telecommunications companies.

The ABST (Antigua and Barbuda Sale Tax) is an analogue of VAT, which is included in the cost of goods and services. It has a fixed rate of 15%.

Personal income, dividends, royalties, interest, inheritance, wealth, and capital gains are not taxed for Antigua and Barbuda residents.

If non-residents gain dividends, interest, or royalties in Antigua and Barbuda, they pay a withholding tax of 25%.

The underlying taxes for individuals are social contributions and property taxes and fees — when owning, buying, and selling real estate or land.

If individuals sell goods or provide services for more than EC$300,000 per year (about $111,000), they must register as payers of the Antigua and Barbuda sales tax (ABST).

Underlying taxes and fees for individuals in Antigua and Barbuda

Tax residents are individuals who live in Antigua and Barbuda for more than 183 days a year.

Non-residents are individuals who earn income in Antigua and Barbuda.

The government of Antigua and Barbuda has been implementing tax reforms in recent decades to make the economic environment conducive to business and to attract companies and investors.

How to legally reduce a tax burden

Legal entities, the country’s tax residents, do not pay taxes on dividends, interest, and royalties. There are no taxes on capital gains, wealth, and inheritance.

The main taxes for legal entities in Antigua and Barbuda are corporate tax, sales tax, and taxes on ownership, purchase, and sale of real estate. Branches are taxed in the same way as subsidiaries.

The corporate tax, or company income tax, is paid by organisations registered and operating in Antigua and Barbuda. The rate is fixed at 25% of the company’s income.

Banks pay corporate tax at a lower rate of 22,5%. Banks must provide mortgage loans and maintain an interest rate no higher than 7% during the year to get a reduced rate.

Insurance, oil, and telecommunication companies pay corporate tax at a beneficial rate of 10%.

If a company is an Antiguan tax resident, it pays corporate tax on profits gained from all sources worldwide. Non-resident companies pay the tax only on profits earned in Antigua and Barbuda.

The Antigua and Barbuda Sales tax (ABST) is 15%. The rate is lower for hotel and restaurant services — 14%. Some activities are taxed at 0% — for example, export, food supply, electricity, fuel, and water for domestic use.

Taxes on the purchase, ownership and sale of real estate are paid by residential and commercial properties or landowners. Ownership tax rates are the same for tax residents and non-residents: 0.1—0.5% of the assessed property value.

Withholding tax at 25% is levied if a non-resident company gains dividends, interest, and royalties from sources in Antigua and Barbuda. Companies pay the tax on money transfers to foreign branches.

Tax residents are companies registered or managed in Antigua and Barbuda.

Non-residents are foreign companies, operating in Antigua and Barbuda.

When buying, selling, and owning real estate in Antigua and Barbuda, taxes are calculated as a percentage of the assessed property value.

Caribbean real estate: prices, income, and expenses

The assessment reflects the market property value at the time of purchase. It is carried out by an authorised valuer when preparing real estate or land for sale.

Purchase. When buying residential or commercial real estate, the future owner pays:

• a stamp duty of 2,5%;

• an insurance fee of 0,2%;

• a land ownership licence fee of 5%. It is paid if a non-resident buys a land plot. The fee doesn’t apply to the real estate purchase under the citizenship by investment program.

Ownership. Owners of residential or commercial real estate or land pay property tax. The Property Tax Act No. 15 of 2000 provides tax calculation and payment rules.

The exception is foreign non-residents who own undeveloped land. For them, the tax rate is higher and depends on the land ownership period: 10% to 20%.

If a building is on the land that belongs to another owner, the landowner pays the land tax, and the building owner pays the property tax. The building owner and the landowner can sign an agreement for the joint tax payment by one owner. In this case, the second one is exempt from paying taxes.

If the previous real estate owner didn’t pay property taxes, the new owner has to pay them upon transfer of ownership.

Property tax can be paid in two instalments of 50%. The first instalment is paid before March 31st, and the balance is paid no later than June 30th of the year for which the tax is calculated. If the claim for payment arises later than March 31st, the tax must be paid no later than June 30th.

If the tax is not paid for more than 60 days, a fine is charged — 5% of the tax amount. If the fine is not paid before the end of the calendar month from the accrual date, the interest of 2% per month is added to the total debt and fine amount.

The court can decide to legally compensate any accrued fines and interest on the owner’s property. In this case, the property can be arrested and sold at an auction.

Sale. If the owner wants to sell a house or apartment in Antigua and Barbuda, they pay only a stamp duty of 7,5%. They don’t have to pay tax on the income received from the sale.

Non-resident sellers pay the Appreciation Tax of 5% of the assessed property value.

Examples of properties in Antigua and Barbuda

Antigua & Barbuda, Saint Philip

$350,000 — $400,000

Apartments in a hotel complex by the sea

1

1

Antigua & Barbuda, Saint Philip

$300,000 — $2,850,000

Share, apartements, townhouse or villa in a resort on the coast of the island

56 m² — 619 m²

1—5

1—5

Antigua & Barbuda, Saint Philip

$400,000 — $450,000

Villa in a five-star resort complex

120 m²

2—3

1—2

The ABST is an indirect tax, which is an analogue of VAT. The ABST is included in the final price and is collected from buyers when purchasing goods, services, or import products at customs. Therefore, ABST payers are everyone who purchases goods and services.

Reporting and registration. Suppose a person or legal entity provides services or sells goods worth more than EC$300,000 per year. In that case, they must register with the Antigua and Barbuda Inland Revenue Department and file sales tax returns.

The ABST must be filed at the very beginning of a business if it is expected that the amount of sales of goods or services will exceed EC$300,000 per year. Or, during the four months of the tax year, goods were sold, or services were provided for over EC$100,000.

Sales tax reporting is submitted monthly, no later than the end of the month following the reporting month. For example, if the tax return is filled out for September, the reporting must be submitted no later than October 31st.

A company or individual must indicate the sales tax registration number in all settlement documents. For example, in an invoice, check, or waybill.

A complete list of activities with tax rates can be found in the Antigua and Barbuda Sales Tax Act and Amendments.

Exempt supplies are goods and services that the ABST does not cover. Exempt supplies include:

• financial and insurance services,

• medical services, including dental, optical, and veterinary services,

• medications sold in pharmacies and medical institutions,

• ongoing care services in nursing homes,

• educational services, private or public,

• rental of housing and sale of residential real estate,

• textbooks approved by the Ministry of Education,

• daycare services,

• transportation of passengers by land, sea, or air within Antigua and Barbuda,

• international transport services,

• funeral home services,

• gambling and lotteries held by non-profit organisations,

• agricultural products not processed by the manufacturer,

• export of unprocessed agricultural products.

Entry tax refund. Sales tax accrued for the reporting period can be reduced by the amount of sales tax on goods and services that the company or individual purchased for its activities.

For example, a company provides legal services for EC$150,000 per month. The sales tax charged on the services rendered will be EC$115,000 × 15% ÷ 115% = EC$15,000.

The same company bought office supplies worth EC$11,500 for work. The purchase amount includes a sales tax of EC$1,500, which can reduce the tax payable.

The total sales tax amount to be paid will be EC$15,000 — EC$1,500 = EC$13,500.

Two forms of legal entities are most often registered in Antigua and Barbuda:

• IBC — an international business company that has its shares. A mandatory requirement for such a company is an office or a licensed representative in the country.

• LLC — a limited liability company that does not issue company shares. Registering an LLC is enough to appoint a director and a shareholder.

The Antigua and Barbuda International Business Corporation Act provides a simple registration procedure for international corporations, minimum reporting requirements, and strict confidentiality for owners.

There is no minimum authorised capital amount for an IBC, except for companies subject to licensing. The currency control requirements do not apply; it is allowed to carry out banking operations worldwide.

To register a company in Antigua and Barbuda, you need to fill out a form and upload scans of documents to the state portal:

1. Company charter.

2. Memorandum of association.

3. Copies of shareholders' passports.

4. Minutes of the shareholders' meeting.

5. Confirmation of the shareholders’ registration addresses.

6. Proof of the declared authorised capital.

7. Bearer share certificate.

8. Certificate of directors' composition.

9. Company name approval.

Documents must be notarized and translated into English.

The company must have at least two founders with Antigua and Barbuda citizenship or residence. One of which is to work as a lawyer or attorney in court.

The applicant receives the company registration certificate by email. Application processing time is one to three business days.

The law exempts an IBC from paying taxes for 50 years, including corporate tax and tax on income from real estate, securities, assets, dividends, and interest.

IBCs pay an annual licence fee, which depends on the authorised capital size. For example, an IBC with a registered capital of $60,000 will pay $6,000 as a fixed fee.

If an entrepreneur has several citizenships, they must pay taxes only in the country where they are recognized as a tax resident.

Sometimes income can be taxed twice. Double taxation occurs when a person must pay taxes on income at their current residence, tax residence, and the country of their citizenship — for example, taxes on rental income, royalties, or dividends.

National governments sign double-tax treaties (DTTs) to avoid double taxation. If the investor has the citizenship of a country that has not entered into a DTT with Antigua and Barbuda, a condition for double taxation may arise. For example, an investor lives in Antigua and Barbuda, and the business is conducted in the country of first citizenship.

If an investor becomes an Antigua and Barbuda tax resident but does not transfer the business there, they will pay tax on the income in both countries in total.

Like other Caribbean countries, Antigua and Barbuda exchanges information within the Common Reporting Standard (CRS) automatic system.

Caribbean countries that exchange tax information

• Anguilla

• Antigua and Barbuda

• Aruba

• Bahamas

• Barbados

• Cayman Islands

• Curacao

• Dominica

• Grenada

• Montserrat

• Saint Kitts and Nevis

• Saint Lucia

• Saint Vincent and the Grenadines

• Sint Maarten

• Trinidad and Tobago

• Virgin Islands

A residence permit, permanent residence, or citizenship is required to become a tax resident and live in Antigua and Barbuda for at least 183 days a year. The fastest way is to get citizenship by investment in 3—6 months.

Guide on Antigua and Barbuda citizenship

Cosmopolitans can get a passport for investments from $100,000. The program allows the investor’s spouse, children, parents, and siblings to participate. The process is remote. No proof of language proficiency is required.

The government of Antigua and Barbuda offers four investment options:

• From $100,000 — a contribution to the National Transformation Fund.

• From $200,000 — purchase of shares in government-approved real estate. The minimum ownership period is 5 years.

• From $150,000 — a contribution to the University of the West Indies Fund for families of six or more people. One family member under 29 gets a year of free education at the university.

• From $1,500,000 — investments in Antigua and Barbuda business projects. Collective investments from $5 million reduce the amount per investor to $400,000.

In return for investment, cosmopolitans can enjoy tax breaks in Antigua and Barbuda and travel without visas to Schengen countries and the UK. With an Antigua and Barbuda passport, getting a US visa for 10 years and a visa to Canada, Australia, and Singapore is easier.