Trinidad and Tobago
ey.com/globaltaxguides
Port-of-Spain GMT -4
EY
Street address:
Mail address: 5-7 Sweet Briar Road
P.O. Box 158
St. Clair, Port-of-Spain
Port-of-Spain Trinidad Trinidad
Executive and immigration contacts
Wade George
+1 (868) 628-5185
Email: wade.george@tt.ey.com
Gregory Hannays +1 (868) 622-1364
Email: gregory.hannays@tt.ey.com
Colin Ramsey +1 (868) 822-5016
Email: colin.ramsey@tt.ey.com
Alicia Pereira +1 (868) 822-6163
Email: alicia.pereira@tt.ey.com
Delon Frederick +1 (868) 822-6169
Email: delon.frederick@tt.ey.com
A. Income tax
Who is liable. Individuals ordinarily resident in Trinidad and Tobago are subject to tax on their worldwide income. Individuals not ordinarily resident in Trinidad and Tobago are taxable on income accruing in or derived from Trinidad and Tobago and on foreign income remitted to or received in Trinidad and Tobago.
Individuals are considered resident in Trinidad and Tobago if they are physically present in Trinidad and Tobago for a period of more than six months in the income year. The concept of ordinary residence is expanded under common law jurisprudence and examines various factors that determine the individual’s habitual place of abode.
Income subject to tax. Taxable income is the aggregate of worldwide income from all specified sources after allowing for appropriate deductions and exemptions.
Employment income. Taxable income includes the value of employerprovided benefits, including accommodation, transportation and tax equalization.
Self-employment and business income Taxable income consists of the aggregate amount of income from all sources, including self-employment and business income, after allowing the appropriate deductions.
Directors’ fees Directors’ fees and amounts paid by a company for expenses to any of its directors are subject to tax.
Married persons are taxed separately, not jointly, on all types of income. No community property or other similar marital property regime applies.
Investment income. Dividends received from a resident company (other than preferred dividends) are exempt from tax. Interest
received by resident individuals on bank deposits and certificates of deposit held at financial institutions in Trinidad and Tobago and interest on bonds and similar instruments that are issued in Trinidad and Tobago are exempt from tax. Rental income and royalties are taxed as ordinary income.
For nonresidents, a final withholding tax is levied at source at a rate of 15% on interest, royalties and management fees. A final withholding tax is imposed at a rate of 3% on dividends paid to a parent company. For other dividends paid to nonresidents, the final withholding tax rate is 8%. These withholding tax rates may be modified or eliminated under the provisions of a tax treaty (see Section E).
Capital gains. Long-term capital gains are not subject to tax.
Any gain realized on the disposition of certain assets within 12 months after acquisition is taxable as ordinary income. Persons domiciled in Trinidad and Tobago are taxed on gains derived from sales of capital assets acquired and disposed of within a 12-month period.
The following assets are exempt from tax:
• Currency acquired for personal expenditure abroad by the taxpayer or his or her family or dependents
• Sums obtained as compensation or damages for any wrong or injury suffered by an individual in his or her personal life or profession or vocation
The following gains are exempt from tax:
• Gains accruing on the disposal of any security in Trinidad and Tobago
• Gains accruing on the disposal of personal automobiles, household goods or owner-occupied houses if these assets are disposed of for TTD5,000 or less
• Gains that are specifically exempt from tax under the law
The following deductions are allowed:
• The cost (money or money’s worth) of an asset, together with other expenses incidental to acquisition
• Any expenditure incurred wholly and exclusively for enhancing the value of an asset (maintenance expenses are not allowable expenses)
• Costs incurred wholly and exclusively in disposing of an asset, including legal fees and agent’s fees
Taxation of employer-provided stock options and profit-sharing schemes. No specific provisions in Trinidad and Tobago regulate the taxation of employer-provided stock options. Therefore, the tax treatment is based on general principles and case law.
Ordinarily, an option is taxed on its market value at the time of grant if the option gives the employee an irrevocable right to acquire shares. An option is not taxed at the time it is exercised. In general, any gains derived from the subsequent sale of the shares acquired under the option are exempt from tax. If a vesting period must elapse before the employee obtains an irrevocable right to acquire shares, the taxing date is the date of vesting.
Specific provisions apply to profit-sharing schemes approved by the Board of Inland Revenue. An employer that establishes an
employee share ownership plan (ESOP) must contribute at least 25% of the annual bonus distribution to the plan’s trustee for the purchase of company shares. When shares are granted to employees, the shares have already been purchased on behalf of the employees. Contributions by the employer to the plan are not considered income to the employee and are not taxable. Distributions received by an employee from the shares held in trust are not subject to tax. If the shares are transferred to an employee under either of two specified conditions, the market value of all the shares transferred is deemed to be income accruing to the beneficial owner of the shares on the date of transfer and is included in the income of the individual for that income year. The following are the specified conditions:
• The employee is still employed by the employer, and the shares are transferred after five years from the date of allocation of the shares.
• The employee ceases to be employed by the employer for a reason other than retirement or death, and the shares are transferred after the employment ends.
Deductions
Allowances and deductible expenses. The following table lists allowances and deductible expenses.
Allowances and deductible expenses Amount
Personal allowance
Contribution to approved pension or retirement fund deferred annuity and 70% of contribution to the
National Insurance Scheme (NIS)
Tertiary education expenses
First-time homeowner allowance
Maintenance or alimony (under court order)
TTD90,000
TTD60,000
TTD72,000
TTD30,000
Amount paid (unlimited)
Donations under deed of covenant Up to 15% of total income
Purchase and installation of CNG kit
Purchase of solar water heating equipment
Purchase of National Tax Free Savings Bonds not exceeding TTD5,000 in value
Tax credit of 25% of cost (up to TTD10,000)
Tax credit of 100% of cost (up to TTD10,000)
Tax credit of 25% of the face value of the bonds
Traveling expenses wholly, exclusively and necessarily incurred by an employee in the performance of his or her duties with respect to his or her employment are deductible for tax purposes to the extent that the expenses have not been reimbursed by the employer.
Business deductions. The following expenses incurred wholly and exclusively in the production of income are deductible:
• Wear-and-tear allowance: A tax depreciation allowance is available for assets used in a business. The rates range from 10% to 40%, depending on the class of the asset.
tax increase. If this requirement is not met, interest is charged at a rate of 20% a year on the underpayment.
Nonresidents must file tax returns for any year in which they derive income from Trinidad and Tobago sources. To file returns, nonresidents follow the administrative rules that apply to residents.
E. Double tax relief and tax treaties
Unilateral relief. In the event that no double tax treaty is in place, unilateral relief may be available at the following rates:
• In the case of prescribed Commonwealth countries, the credit is limited to one-half of the double tax relief on foreign-source income calculated according to applicable rules.
• In the case of other countries, the credit is limited to onequarter of the double tax relief on foreign-source income calculated according to applicable rules.
Relief under double tax treaties. Trinidad and Tobago has entered into double tax treaties with the following jurisdictions:
Brazil India Switzerland
Canada Italy United Kingdom
China Mainland Luxembourg United States
France
Germany
Spain Venezuela
Sweden
In addition, the treaty with the CARICOM states (Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia and St. Vincent) provides reduced rates of withholding tax.
F. Entry visas
Only Trinidad and Tobago nationals and residents have the right to enter the country freely. Nonresidents are subject to varying entry requirements, depending on whether a temporary visa or resident status is required. General entry visas are not required for nationals of countries that are members of the following:
• CARICOM
• European Union (EU)
• British Commonwealth
Certain exceptions apply to the European Union and the British Commonwealth.
Obtaining a visa for entry into Trinidad and Tobago does not ensure that entry will be permitted. The immigration officer makes the final decision on whether to allow entry. Under the Immigration Act of 1969, an officer may allow entry to the following classes of persons:
• Diplomatic or consular officers of any country, representatives of the United Nations or any of its agencies, and officials from international organizations in which Trinidad and Tobago participates, who are entering the country to carry out official duties or to pass through in transit
• Tourists and visitors
• Persons passing through the country to another country
• Clergy, priests or members of religious orders entering to carry out religious duties
• A person who, by reason of education, employment, training, skills or other qualifications, has established, or is likely to establish, a successful profession, trade, self-operating business or agricultural enterprise in Trinidad and Tobago and who has sufficient means of support while in the country
A person who has been a continuous resident of Trinidad and Tobago must apply for resident status to the Permanent Secretary of the Ministry of National Security and must present the circumstances of his or her particular case. In determining the suitability of an applicant, the Ministry of National Security must receive proof that the applicant entered the country legally, be satisfied that the person is not categorized within a prohibited class, and receive a good character certificate for the applicant from the police in Trinidad and Tobago. If an application for resident status is refused, the applicant may reapply one year after the date of receipt of the refusal.
I. Family and personal considerations
Family members. Any family member of a working expatriate wishing to work in Trinidad and Tobago must obtain his or her own work permit. The children of a working expatriate need student visas to attend schools in Trinidad and Tobago.
Marital property regime. No community property or other similar marital property regime applies in Trinidad and Tobago.
Driver’s permits. Foreign nationals may drive legally in Trinidad and Tobago with their home country driver’s licenses for 90 days after their date of arrival. A driver must keep a valid passport and license in his or her possession at all times. If the foreign national’s period of stay is more than 90 days, he or she is required to apply for a Trinidad and Tobago driver’s license.
To obtain a local Trinidad and Tobago driver’s license, a foreign national must take an eye test, a written examination and a practical driving examination.