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Nevis: Domestic Corporate Taxation

Introduction

There is no net worth tax, gift tax, turnover tax, or estate duty in Nevis. Corporate Income Tax and Withholding Tax apply to domestic companies, but not to entities carrying on business solely with non-residents of the Federation. See Tax-Efficient Sectors for details.

A 17% value-added tax was introduced by the government in 2010. Entities with gross annual taxable income in excess of ECD150,000 (USD55,900) are required to register for VAT, which came into force on November 1, 2010, consolidating 12 existing taxes, the Consumption Tax, the Hotel Accommodation and Restaurant Tax, the Cable TV Tax, the Vehicle Rental Levy, the Insurance Premium Tax, the Export Duty, the Public Entertainment Tax, the Lotteries Tax, the Gaming Machine Tax, the Traders Tax, the Telecommunications Levy, the Island Enhancement Fund and the Parcel Tax.

Zero-rated items include: disposable diapers, bread, flour, fuel, infant formula, milk, oats, rice, the sale of commercial property from one VAT registrant to another, and sugar.

Exempt supplies include: supply of basic construction services on a residential home; a supply of medicines for chronic diseases approved by the Chief Medical Officer; a supply of printed matter, articles, books, newspapers and pamphlets; the supply of certain agricultural inputs; fibre-glass and wooden boats, anchors, GPS sets, compasses, VHF Radios; bus & taxi fees; education services; electricity; insurance; interest on loans; locally produced agricultural produce grown in the Federation; medical services; residential rent and residential water.

A law passed by the St. Kitts and Nevis National Assembly in October 2010 allows the Nevis Island Administration to collect corporate tax from companies or branches of companies which carry on business in the Island of Nevis.
The legislation, known as the Income Tax (Amendment) Bill, 2010, also makes provision for the tax when collected to be paid into the Consolidated Fund of the Nevis Island Administration for its use.

In April 2008, the Nevis Island Assembly approved new property tax legislation entitled the Nevis Property Tax Ordinance 2007. This historic Ordinance modernises the valuation property taxes of Nevis through the introduction of market value as the validation standard for most properties on the island. It will be payable by both local and foreign property owners. See Nevis Personal Taxation for more detail.

The Premier of Nevis, Joseph Parry has vowed to place greater emphasis on ensuring that Nevis is less dependent on external economic forces. Nevis will accomplish this through diversifying its economy and improving tax collection methods.

During the Premier’s 2009 New Year’s Message, he urged all banking, financial institutions and telecommunications companies on Nevis to pay their share of taxes to the Nevis treasury in 2009: “We anticipate that by the end of 2009, all banking and financial institutions which make a profit by doing business on the island of Nevis will return what is due to the people of Nevis.”

The Premier praised the finance ministry for enforcing property taxes and announced that some expatriate homeowners would pay tax on their properties for the first time in the history of Nevis.

Further to the Premier’s announcement, on January 6, Chief Finance Secretary in the Ministry of Finance, Laurie Lawrence stated that the Nevis Island Administration was looking to invest in technology to streamline tax collections and reduce government expenditure with the implementation of a ‘Cash and Call Accounting system’.

 

 

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