Welcome to the world of St Lucia taxes. As a responsible St Lucia citizen or resident, understanding the country’s tax system is crucial. St Lucia, located in the Eastern Caribbean, offers a favorable business environment for tax optimization.
St Lucia relies on taxes to fund public services, infrastructure development, and to maintain economic stability. This guide explores all aspects of St Lucia’s tax system, including how to become a tax resident and the benefits of tax residency in St Lucia.
Whether you are a business owner, an employee, or an individual interested in the tax structure of St Lucia, this guide provides valuable insights into the country’s tax landscape.
Taxes in St Lucia: Key Takeaways
Overview of St Lucia Taxes
When it comes to St Lucia, the rules are pretty straightforward. Citizens are exempt from capital gains, dividends, and inheritance taxes, while legal entities are exempt from paying taxes on capital gains, dividends, and sometimes value-added tax (VAT).
To be considered a tax resident of St Lucia, an individual must spend a minimum of 183 days in the country each year. In order for a company to be considered a tax resident, it must be registered in St Lucia’s jurisdiction or managed through permanent missions. Tax residents can benefit from some reduced tax rates.
If you do not meet these requirements, you will not be considered a tax resident in St Lucia and will have to pay income tax on any income earned on the island. The Inland Revenue Department (IRD) is the government agency responsible for collecting Caribbean taxes and enforcing St Lucia tax laws.
Taxes for Individuals
There are four main taxes paid by individuals in St Lucia, namely personal income tax, interest, social contributions, and tax on royalties. On the flip side, individuals do not pay taxes on capital gains or inheritance in the country.
In St Lucia, income tax is levied on the following:
- Business income
- Interest
- Labor activity
- Rent
- Royalty
Furthermore, St Lucia taxation is progressive, meaning individuals with more wealth pay higher tax rates. For both tax residents and non-residents, income up to EC $18,400 is not subject to St Lucia payroll taxes, and amounts above this are taxed at fixed rates.
Income tax rates on annual income in St Lucia
| Income amount (EC $) | Income tax rate |
|---|---|
| $0 to $18,400 | Tax exempt |
| $18,401 – $28,400 | 10 percent |
| $28,401 – $38,400 | 15 percent |
| $38,401 – $48,400 | 20 percent |
| $48,401 and above | 30 percent |
Social contributions
For both residents and non-residents of St Lucia, social contributions are five percent of your monthly income. Your social contributions are paid on your behalf by your employer to the National Insurance Corporation. The NIC then distributes them to disability allowances, pensions, and sickness benefits.
Tax rate on interest and royalties
The tax rate you pay on interest and royalties will depend on your status as a resident. Residents of St Lucia or the Caribbean Community (CARICOM – the trade and economic union of the Caribbean countries that is made up of 15 countries) pay a reduced rate in comparison to non-residents.
| Tax Type | Residents of St Lucia | Residents of CARICOM | Non-residents |
|---|---|---|---|
| Interest | 10 percent | 15 percent | 25 percent |
| Royalties |
Taxes for Legal Entities
A company must be registered in St Lucia or generate income there to be considered a tax resident. Both resident companies and non-resident companies pay 33.3 percent corporate income tax.
VAT: Companies with an annual turnover over EC $400,000 (~$148,000) pay value-added tax (VAT) at the standard rate of 12.5 percent. VAT exemptions apply to educational, financial, insurance, medical, and transport services.
Interest and royalties tax: Resident companies pay tax on interest and royalties at a rate of ten percent. Resident companies of CARICOM pay a rate of 15 percent, while non-resident companies pay 25 percent.
Excise tax: Excise tax is levied on four categories of goods manufactured or imported into St Lucia: Liquor, fuel, beer, and cigarettes. Most are taxed at a specific rate. Imported goods may be subject to customs duties.
International Business Companies
In accordance with the International Business Companies (IBCs) Act, the St Lucia IBC tax is a flat rate of 30 percent. IBCs are exempt from exchange controls and stamp duty on the transfer of any property, assets, shares, debt obligations, or other securities.
Withholding tax is not levied on the remittance of dividends and distributions, royalties, interest, management fees, or other income paid by IBCs to individuals outside St Lucia. Supplies to an IBC are considered exports, and a zero percent VAT rate applies.
How to Become a Tax Resident of St Lucia
A foreigner is considered a tax resident in St Lucia if they spend 183 or more days in the country in a 12-month period. In order to spend this amount of time in the country legally, obtaining a temporary or permanent residence permit or St Lucia citizenship is required.
The St Lucia Citizenship by Investment Program is the fastest way to get St Lucia tax residency. Foreign nationals can invest in St Lucia through real estate, a business, donate to the government fund, or buy government bonds.
- Non-refundable contribution: Obtain St Lucia citizenship by donating $240,000 to the National Economic Fund.
- Real estate investment: Obtain St Lucia real estate citizenship by investing at least $300,000 in approved real estate.
- Business investment: Obtain St Lucia citizenship through a sole business investment valued at least $3.5 million or a joint investment valued at $250,000 in a $6 million venture.
- Buying government bonds: Obtain citizenship by acquiring at least $300,000 worth of St Lucia government bonds.
Filing Tax Returns in St Lucia
Individuals: You must complete the forms under St Lucia codes TD4 or TD5, which you can obtain from your employer. You must collect receipts that confirm your expenses in order to receive a tax deduction. You can submit your documents and complete a St Lucia tax filing online using the nation’s digital platform for online tax services. The deadline to file your tax returns is 31 March.
Legal entities: You must complete the TD4, TD5, TD6, and contractor forms and create a list of your company’s employees. You must then submit your documents in a sealed envelope to the tax office by 31 January. Late submissions will be fined for each month that submissions are delayed.
Property Taxes
Buying St Lucia real estate requires paying the following taxes:
Property transfer tax: Buyers pay a two percent transfer tax.
Stamp duty: Both buyers and sellers pay stamp duty. Buyers pay a two percent stamp duty, while the seller’s stamp duty rate will depend on their residency status. The value of the real estate will define the rate paid by tax residents, while non-residents pay a flat ten percent rate.
St Lucia stamp duty rate
| Real estate value (EC $) | Residents | Non-residents |
|---|---|---|
| $50,000 – $75,000 | 2.5 percent | 10 percent |
| $75,001 – $150,000 | 3.5 percent | |
| $150,001 and above | 5 percent |
Annual property tax
For residential property, the annual residential property tax rate is 0.25 percent. For commercial property, the tax rate is 0.4 percent. This rate is the same for companies and individuals, whether you are a resident or not.
St Lucia Double Taxation Agreements
As a member of the Caribbean Community (CARICOM), St Lucia has double taxation agreements with the following countries:
- Antigua and Barbuda
- Barbados
- Belize
- Dominica
- Grenada
- Guyana
- Jamaica
- Montserrat
- St Kitts and Nevis
- St Vincent and the Grenadines
- Trinidad and Tobago
Benefits of St Lucia Tax Residency
There are a number of benefits to being a tax resident in St Lucia:
- Individuals do not pay income tax on their yearly earnings under EC $18,400.
- Tax residents in St Lucia (individuals and businesses) pay a 10 percent tax on interest and royalties, whereas non-residents pay 15 to 25 percent.
- Companies with a turnover of less than EC $400,000 are exempt from VAT.
- St Lucia passport holders and residents pay a 2 to 5 percent stamp duty on property sales, whereas non-resident sellers pay ten percent.
- St Lucia complies with EU good-governance standards for taxes, remains off the EU blacklist of jurisdictions, and allows tax residents to benefit from international credibility and smoother financial services.
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