Home Business Antigua and Barbuda Tax Guide: Everything You Need to Know

Antigua and Barbuda Tax Guide: Everything You Need to Know

Antigua and Barbuda is a country in the Caribbean that attracts not only with its beauty but also with tax incentives. Residents of the island nation do not pay capital gains tax, inheritance tax, wealth tax, dividends, and even income tax. At the same time, foreigners can obtain citizenship through investment and enjoy all the charms of the Antigua and Barbuda passport.

How to obtain citizenship in Antigua and Barbuda through investment? 

Evgeniya Morozova, Ph.D. in law at the Immigrant Invest agency, claims that the application process is one of the fastest in the world, taking only 3-6 months. Foreigners can apply for Antiguan citizenship under the following conditions:

  • At least 200,000 US dollars invested in real estate or shares of resorts in the country.
  • Investment in an approved business of at least USD 1,500,000.
  • Minimum $100,000 non-refundable contribution to the National Development Fund.
  • A donation to the University of the West Indies Foundation (UWIF) of at least US$150,000.

How to get tax residency in Antigua and Barbuda?

To obtain resident status, you must live six months a year in the country. The state legislation states that foreign citizens wishing to obtain insurance against the turbulence of life are offered a permanent residence program. In such a case, the foreign citizen is obliged to pay taxes every year. What does it take to get this opportunity?

  • At least 1 month must be spent in Antigua and Barbuda.
  • The annual income is more than 100,000 USD.
  • $20,000 must be paid per year as fixed taxes.
  • The address of residence must be in the territory of Antigua and Barbuda.

Property taxes in Antigua and Barbuda

Real estate is taxed at a rate of 0.2% – 0.5% of the market value of the property. For residential buildings, the current rate is 0.30%. The real estate purchase and sale transaction is also accompanied by the payment of taxes: buyers pay 2.5%, and sellers — 7.5%. Owners of undeveloped land without resident status pay between 10% and 20% of the value of the land.

Income tax in Antigua and Barbuda

The country’s population is completely exempt from income tax. This decision was made by the state government in 2016. This move has led to an increased interest of foreigners in the citizenship of the country and, accordingly, to increased investment in the growing business of Antigua and Barbuda.

Corporate tax in Antigua and Barbuda

One of the main points that can both attract and scare away businessmen is the corporate tax. This type of tax in Antigua and Barbuda must be paid every year at a rate of 25%. The same rate applies to the branches of the company. If a business is registered in Antigua and Barbuda, it is exempt from capital gains tax. There are no foreign benefits with rare exceptions.

Business people can use some tricks to reduce taxable income. For example, it is possible to carry forward losses for up to six years. If the company is not a resident of Antigua and Barbuda, only income received in that country is taxed. Depending on the activities of commercial enterprises, incentives for doing such business are determined.

ABST sales tax (VAT)

Antigua and Barbuda has had a sales tax (VAT) since 2007. Usually, the rate is 15%, but some types of businesses have the opportunity to reduce it to 12.5%. We are talking about hotels. In addition, there is a reduced VAT, which is 0%. Of course, not all companies can count on such a rate.

Legal entities must be registered for sales tax if:

  • The minimum taxable level of activity for 12 months is 300,000 XCD (1 USD = 2.70 XCD).
  • The company provides professional services, organizes public entertainment, is the owner of public entertainment venues, is a government organization, or carries out commercial supplies or business activities.

Exceptions are not provided. An ABST tax return must be filed each year with the Department of Internal Revenue. Payment occurs within a month after the end of the tax period. The tax period is the period in respect of which the taxable person must report and pay any ABST to the Department of Internal Revenue. Each return must be filed on the last day of the month following the end of the tax period, regardless of whether tax is payable in respect of that period.

Unincorporated businesses pay tax from 0 to 25%. Unlike ABST, such taxes in Antigua and Barbuda are paid once every three months. Foreign companies are advised to appoint a tax representative depending on the taxable services. If the foreign company’s taxable supplies are below the XCD 300,000 threshold, registration is not required.

If a business supplies goods to Antigua and Barbuda, it is required to pay ABST even if it is not a resident of the country. Deliveries in the territory of Antigua and Barbuda include telecommunications services initiated by a person physically located in Antigua, any services related to a land object in the territory of the state, and any other services that are physically performed in the country by a person located in Antigua.

What happens if a company does not pay taxes in Antigua and Barbuda?

Late filing of a tax return will result in a penalty, which is greater than XCD 500 or 5% of the amount of tax due for every 30 days that the return remains unpaid. Late payment carries a penalty of 20% of the tax amount. Tax audits are carried out regularly, so it makes no sense to hope to avoid punishment. In addition to having invoices in electronic form, a physical copy of the invoices may also be required during the audit. Invoices, documents, and other records cannot be kept abroad.

Stamp Duties and Customs Duties

When selling and buying shares, sellers pay 5% and buyers pay 2.5% stamp duty. Customs duties apply to all imports and are set in accordance with the CARICOM Common External Tariff. Revenue Recovery Charge (RRC) at a rate of 10% and environmental levy is also paid.

Other taxes in Antigua and Barbuda

Individuals do not have to pay taxes on inheritance, wealth, and withholding. Also, citizens of the island nation are exempt from all fees for registered technical services, interest, dividends, and royalties. Exports and other supplies of goods/services for consumption outside the country do not need to be taxed.

Conclusion

All taxes in Antigua and Barbuda are clearly defined and do not create pitfalls for businesses or ordinary citizens of the country. Doing business on the territory of the islands is beneficial since many taxes popular in other countries are absent. Moreover, some types of businesses receive additional incentives from the state, which makes Antigua and Barbuda an even more attractive place.

The citizens of the two islands also have a lot of benefits compared to many Europeans and Americans. The system of obtaining citizenship through investment allows everyone to win: foreigners receive a passport with pleasant prospects, and the state receives additional finances to support business, tourism, education, healthcare, and other areas. Antigua and Barbuda is a place worth visiting at least once in a lifetime. The nature of the Caspian islands is no less attractive than the tax conditions.

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He is currently Editor at Inferse.com. He is a political columnist for the Finger Lakes Times, Eiram.org, and is the co-founder of InFocus.co. His passions include politics, golf, the media, and gadgets.