Trinidad and Tobago
Port-of-Spain
EY
Mail address:
Street address:
P.O. Box 158 5-7 Sweet Briar Road
Port-of-Spain
Port-of-Spain
Trinidad Trinidad
Indirect tax contacts
Gregory Hannays +1 (868) 622-1364 gregory.hannays@tt.ey.com
Nassim Mohammed +1 (868) 822-5022 nassim.mohammed@tt.ey.com
Colin Ramsey +1 (868) 822-5016 colin.ramsey@tt.ey.com
A. At a glance
Name of the tax
Local name
Value-added tax (VAT)
Value-added tax (VAT)
Date introduced 1 January 1990
Trading bloc membership Caribbean Community (CARICOM)
Administered by Board of Inland Revenue (BIR)
VAT rates
Standard
Other
ey.com/GlobalTaxGuides
GMT -4
Value-Added Tax Administration Center (VAT Center) (www.ird.gov.tt)
12.5%
Zero-rated (0%) and exempt
VAT number format 999999 (6 digits)
VAT return periods
Thresholds
Bimonthly or otherwise determined
Registration TTD600,000 (approx. USD89,600)
Recovery of VAT by non-established businesses No
B. Scope of the tax
VAT is charged on the entry of goods imported into Trinidad and Tobago and on the commercial supply of goods or prescribed services by a registered person. In Trinidad and Tobago, taxable supplies are referred to as “commercial supplies.”
Effective use and enjoyment. To avoid instances of non-taxation or double taxation, jurisdictions can apply “use and enjoyment” rules that allow a service that is “used and enjoyed” in the jurisdiction to be taxed or prevent a service that is “used and enjoyed” outside the jurisdiction from being taxed. If a service is taxed in the jurisdiction under the “use and enjoyment” provisions, a non-established supplier of the service may be required to register for VAT in every jurisdiction where it has customers that are not taxable persons. In Trinidad and Tobago, no services are subject to the “use and enjoyment” provisions.
In the case of a non-established business, the VAT registration application form must be signed by the directors, notarized and apostilled. Also copies of the passports of the company directors must be notarized and apostilled.
Deregistration. A taxable person who is not required by the VAT Act to be registered may apply to the BIR to have their registration canceled. The BIR may refuse to cancel the registration on the grounds that the person has, within the last two years, made supplies requiring them to be registered.
Changes to VAT registration details. As per section 28 (1) of the VAT law, a taxable person must, within 21 days, give the BIR notice in writing of any of the following changes:
• Any change affecting the accuracy of the particulars provided by their application to be registered for VAT
• The business for which the person is registered is closing down
• Any other matter of which they are required by the regulations to give the BIR notice
If a taxable person dies; becomes bankrupt, goes into liquidation or receivership or becomes a party to an amalgamation, the taxable person or the person responsible for the affairs of the taxable person must, within 21 days, give the BIR notice in writing thereof.
D. Rates
The term “commercial supplies” refers to supplies of goods and prescribed services that are made liable to a rate of VAT, including the zero-rate.
The VAT rates are:
• Standard rate: 12.5%
• Zero-rate: 0%
The standard rate of VAT applies to all supplies of goods or services unless a specific measure provides for the zero rate or an exemption.
Examples of goods and services taxable at 0%
• Exported goods
• Medicines
• Certain equipment to be used in the energy sector
• Water and sewerage services supplied by a public authority
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and that do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Financial services
• Medical services
• Residential property rentals
• Real estate brokerage
• Public postal services
• Prescribed bus and taxi services
• Betting and gaming
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Trinidad and Tobago.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” In general, the tax point for goods and services supplied by a taxable person is the earliest of the following events:
• The date of issuance of the invoice by the supplier
• The date of receipt of payment for the supply
• The date on which the goods are made available to the recipient, or the services are performed
A taxable person must account for VAT in the VAT period in which the tax point occurs, regardless of whether payment is received. A taxable person may recover input tax indicated on the tax invoices received.
Deposits and prepayments. For deposits and prepayments, a supply of goods or services takes place when payment is made for the supply. The rule does not vary for refundable or nonrefundable amounts or if the supply does not take place.
Continuous supplies of services. Where a supply of services is continuous (e.g., electricity and telecommunications), the supply takes place when an invoice for the supply is issued by the supplier, but only to the extent of the supply to which the invoice relates.
Where services are supplied under an agreement (e.g., property rental) that expressly provides for the consideration to be paid in periodic payments, whether or not the services are provided periodically, the services are regarded as being successively supplied at the times when the periodic payments are made or become due, whichever is earlier, to the extent that an invoice for the services is not issued by the supplier.
Where goods are supplied progressively or periodically under an agreement that provides for the consideration for the supply to be paid from time to time upon the supplier issuing invoices, the goods are regarded as being supplied at the time when:
• An invoice for the supply of the goods is issued by the supplier
• Payment for the supply of the goods is made Or
• Payment for the supply of the goods becomes due
Goods sent on approval for sale or return. Where goods are supplied to a person under an agreement whereby the recipient has an option to return the goods to the supplier, the supply takes place when the goods are made available to the recipient.
Reverse-charge services. In Trinidad and Tobago, the reverse charge for services does not apply. As such, there are no special time of supply rules.
Leased assets. Where goods are supplied under an agreement for hire purchase or lease with an option to purchase, the supply takes place when the goods are made available to the recipient.
Imported goods. VAT on the entry of imported goods becomes due and payable at the time when the goods have entered. The importer of record is liable to account for the tax and must pay it.
F. Recovery of VAT by taxable persons
The VAT paid on goods and services that are acquired for the purpose of making taxable supplies is deductible as input tax. Input tax is offset against output tax, which is the tax charged on the making of commercial supplies. Input tax is deductible when the goods and services are acquired.
Goods or services are deemed to be for the purpose of making commercial supplies if the supplier acquired, imported or produced the goods or services for any of the following purposes:
• Their supply or resupply as a taxable supply
• Their consumption or use (whether directly or indirectly or wholly or partly) in producing goods or services for supply as a taxable supply
• Their consumption or use (whether directly or indirectly or wholly or partly) with respect to a commercial enterprise
Supplies to nontaxable persons. Invoices are required to be issued for supplies made to all persons, except fast-food outlets, gas stations and cinemas are exempted from the requirement to issue a tax invoice, unless one is requested by the recipient of the supply.
Records. In Trinidad and Tobago, examples of what records must be held for VAT purposes include tax invoices, proforma invoices and certificates of waiver given to them and copies of tax invoices and proforma invoices given by them. Every taxable person must keep at its principal place of business in Trinidad and Tobago, or such other place as the board may approve, such books and records, expressed in the English language and the currency of Trinidad and Tobago, as are appropriate to enable the board to ascertain the liability of that taxable person to tax.
In Trinidad and Tobago, VAT books and records can be held outside of the country. Records may be held outside of Trinidad and Tobago, if such records can be provided in a timely manner to the BIR upon request and the records of approval are granted by the BIR.
Record retention period. Books and records are to be kept for six years from the end of the VAT period, except where the person ceases to exist, and the affairs of the person have been wound up.
Electronic archiving. Electronic archiving is not allowed in Trinidad and Tobago. Archiving must be made in paper form only.
I. Returns and payment
Periodic returns. The tax year is divided for taxable suppliers into two-month tax periods, and suppliers are required to submit a VAT return covering all taxable transactions up to and including the last day of each tax period. For administrative convenience, the total number of registrants is divided into two basic categories and an ad hoc category, whose tax periods are as follows:
• Category A: Two-month periods ending with the last day of January, March, May, July, September and November
• Category B: Two-month periods ending with the last day of February, April, June, August, October and December
• Category C: Tax periods as determined by the Board of Inland Revenue
Every registrant is required to submit a VAT return on the prescribed form to the Board of Inland Revenue by the 25th day of the month following each tax period.
Periodic payments. Every taxable person is required to pay the amount of VAT due to the Board of Inland Revenue by the 25th day of the month following each tax period. Payment of VAT must be done by bank transfer or check. In 2021, electronic payment was introduced. The BIR accepts payment of taxes via “TransACH” for transactions between TTD100,000 and TTD499,999 and “safe-tt” for transactions TTD500,000 and over through the Central Bank of Trinidad and Tobago.
Electronic filing. Electronic filing is mandatory in Trinidad and Tobago for all taxable persons. Filing should be done through the e-Tax system. The website address to access the e-Tax system is etax.ird.gov.tt. Taxable persons can file VAT returns online using the logged-in services or non-logged-in service. However, to access logged-in services (which offer more services) the taxable person must register to obtain a TTConnect ID. To obtain a TTConnect ID, the taxable person must have two forms of Trinidad and Tobago national identification.
Payments on account. Payments on account are not required in Trinidad and Tobago.
Special schemes. No special schemes are available in Trinidad and Tobago.
Annual returns. Annual returns are not required in Trinidad and Tobago.
Supplementary filings. No supplementary filings are required in Trinidad and Tobago.
Correcting errors in previous returns. Where a taxable person has filed a VAT return and wishes to make amendments to the return, the taxable person is required to write to the BIR requesting the amendments to the return.
Digital tax administration. There are no transactional reporting requirements in Trinidad and Tobago.
J. Penalties
Penalties for late registration. A penalty of TTD15,000 and other penalties can be imposed for failure to register. A penalty of TTD6,000 can be imposed for a failure to notify the tax authorities of changes relating to the registration. For further details, see the subsection Changes to VAT registration details above.
Penalties for late payment and filings. Penalties are assessed for errors and omissions with respect to VAT accounting. A fine of TTD1,000 is imposed for the late submission of a VAT return on summary conviction. In addition, a penalty of 8% and interest at the rate of 2% per month or part of a month is charged on late payments of VAT.
Penalties for errors. There are no specific penalties in Trinidad and Tobago for errors. The penalties for late payment and filings above apply.
Penalties for fraud. Where a person who makes a supply and:
• Falsely represents that tax is charged on that supply
• Falsely represents the amount of tax charged on that supply Or
• Recovers or seeks to recover an amount represented to be in respect of tax, the board may assess that person as being liable to pay an amount of tax on the basis of so much of the amount that it appears to the board was represented to be charged as tax, or was recovered or sought to be recovered in respect of tax, as exceeds the amount, if any, that he is authorized by the VAT law, to recover in respect of the supply and, where the person is not registered, the assessment shall be made as if that person were registered and its tax period had been such period as the board may determine
If an assessment of the tax payable by a person is made or amended under this section wholly or in part as a result of any act or omission of that person that constitutes an offense against the VAT Act, the assessment may include such additional amount by way of penal tax as the board sees fit, but so that the additional amount does not exceed three times the amount of tax (other than penal tax) that is included in the assessment or amendment as a result of the act or omission that constitutes the offense.
Personal liability for company officers. The VAT law provides that where a company commits an offense, every director or other officer concerned in the management of the company is guilty of the offense unless they prove that the offense was committed without their consent or connivance and that they exercised all such diligence to prevent the commission of the offense.
Statute of limitations.. An assessment by the BIR cannot be made, amended or vacated after six years from the end of the tax period to which the assessment relates or three years from the date of filing of the return to which the assessment relates, whichever is later.