Country Name: Antigua and Barbuda
Currency: East Caribbean Dollar (XCD)
Primary Tax Authority: Inland Revenue Department (IRD)
Key Legislation:
- Income Tax Act
- Value Added Tax Act
- Corporate Tax Act
Fiscal Authority Allocation
Centralized Fiscal System:
Antigua and Barbuda operates a centralized tax system, with the Inland Revenue Department (IRD) responsible for administering and collecting taxes, including corporate income tax (CIT), personal income tax (PIT), and value-added tax (VAT). Local governments have minimal taxing authority, with most revenues collected by the central government.
Corporate Income Tax (CIT)
Standard Rate: 25%
Antigua and Barbuda levies a corporate income tax rate of 25% on net taxable income for resident companies. Non-resident companies are taxed on Antigua and Barbuda-sourced income.
Corporate Forms and Taxation:
- Corporation (Company): The most common corporate form in Antigua and Barbuda, subject to the 25% CIT rate.
- International Business Company (IBC): IBCs conducting business outside Antigua and Barbuda are exempt from corporate income tax on foreign-sourced income.
- Branches of Foreign Companies: Taxed at the same 25% CIT rate on Antigua and Barbuda-sourced income.
Exemptions and Incentives:
- Tax Holidays: Companies in key sectors, such as tourism, agriculture, and manufacturing, may qualify for tax holidays of up to 15 years.
- Investment Incentives: The government offers various incentives for foreign and local investment in strategic industries, including CIT reductions, customs duty exemptions, and VAT exemptions.
Goods and Services Tax (GST) / Value-Added Tax (VAT)
Standard Rate: 15%
Antigua and Barbuda applies a VAT rate of 15% on most goods and services. VAT is levied on the sale of goods, provision of services, and imports.
Reduced Rate: 12.5% for certain tourism-related services.
Exemptions: Basic food items, educational services, healthcare services, and certain financial services are exempt from VAT. Exports are zero-rated, allowing businesses to reclaim VAT on inputs used in export production.
Personal Income Tax (PIT)
No Personal Income Tax:
Antigua and Barbuda does not levy personal income tax on individuals, making it an attractive jurisdiction for expatriates, retirees, and high-net-worth individuals.
Additional Mandatory Contributions
Social Security Contributions:
Employers and employees must contribute to Antigua and Barbuda’s social security system, which provides pensions, healthcare, and unemployment benefits.
- Employer Contribution: 5% of gross salary.
- Employee Contribution: 3% of gross salary.
Withholding Taxes
- Dividends: 15% for non-residents (exempt for residents).
- Interest: 25%
- Royalties: 25%
Withholding tax rates may be reduced under Antigua and Barbuda’s double taxation agreements (DTAs).
Transfer Pricing Rules
Antigua and Barbuda does not have formal transfer pricing regulations, but related-party transactions are expected to be conducted at arm’s length and comply with international standards.
Special Tax Regimes
- International Business Companies (IBCs): IBCs conducting business outside Antigua and Barbuda are exempt from CIT, capital gains tax, and withholding taxes on foreign-sourced income, making the jurisdiction attractive for offshore financial services.
- Tourism Incentives: Companies investing in the tourism sector can benefit from tax holidays, reduced import duties, and VAT exemptions for tourism-related projects and equipment.
- Renewable Energy Incentives: Antigua and Barbuda offers tax incentives for renewable energy projects, including CIT exemptions, VAT reductions, and customs duty exemptions on qualifying energy projects.
Other Taxes
- Real Estate Tax: Property taxes are levied annually, generally ranging from 0.1% to 1% of the property’s assessed value, depending on its location and use.
- Capital Gains Tax: Antigua and Barbuda does not impose a separate capital gains tax. Gains from the sale of property or shares are included as part of ordinary income and taxed at the applicable CIT rate.
- Excise Taxes: Excise duties are imposed on specific products, such as alcohol, tobacco, and fuel.
Double Taxation Agreements (DTAs)
Antigua and Barbuda has signed several double taxation agreements, primarily with CARICOM member states and other countries. These agreements help reduce withholding taxes on dividends, interest, and royalties and prevent the double taxation of cross-border income.
Local Taxes
Local governments in Antigua and Barbuda collect property taxes and some minor fees. However, the Inland Revenue Department (IRD) administers most major taxes, including income tax and VAT.
Compliance and Reporting
Annual Filing:
Corporate tax returns must be filed by March 31st of the following year. The tax year in Antigua and Barbuda follows the calendar year. Individuals do not need to file personal income tax returns due to the absence of PIT.
Penalties for Late Filing:
Penalties for non-compliance or late filing include interest on overdue taxes and fines. Interest on unpaid taxes is generally set at 1% per month, with additional penalties for significant delays.
Recent Developments
Digital Services Tax:
Antigua and Barbuda is exploring the potential of implementing a digital services tax on foreign digital platforms that provide services to local consumers. This would align with global trends toward capturing revenue from the digital economy.
Tourism Sector Growth:
With tourism being the key driver of Antigua and Barbuda’s economy, the government continues to promote investments in this sector through generous tax incentives, including VAT reductions and tax holidays for tourism infrastructure projects.
Renewable Energy Push:
To combat the effects of climate change and reduce reliance on fossil fuels, Antigua and Barbuda is offering tax breaks and incentives for investments in renewable energy projects, such as solar and wind power. These include VAT and import duty exemptions on renewable energy equipment.
Citizenship by Investment (CBI) Program:
Antigua and Barbuda’s Citizenship by Investment (CBI) program remains popular, offering foreign investors citizenship in exchange for investments in real estate or the national development fund. Investors in the CBI program can benefit from tax exemptions on CIT, VAT, and import duties.
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