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Antigua and Barbuda, a twin-island country in the Caribbean, has a tax system that is relatively simple and straightforward. Whether you are a resident, a non-resident, or a legal entity operating in Antigua and Barbuda, you are required by law to pay taxes on your income and assets. However, the tax rates and rules might differ depending on your status and the type of income or assets you have. In this article, we will provide you with a simplified explanation of how the tax system in Antigua and Barbuda works, including the tax rates, compliance requirements, exemptions, incentives, and planning tips.
The tax system in Antigua and Barbuda is based on the principle of territoriality, which means that only income and assets generated within the country are subject to taxation.
Since the tax law was passed in 2016, Antigua and Barbuda have become a good place for investors and expats alike. Under this law, people who live in the country and people who do not live in the country do not have to pay personal income tax on income earned inside the country's borders. This has made Antigua and Barbuda more attractive to foreign investors and also made it more likely for highly skilled professionals to move there.
The country's personal income tax rate of 0% makes it one of the few places in the world where there is no personal income tax. Moreover, there is no tax on wealth, inheritance, or capital gains. This gives individuals and businesses a better tax situation. Putting this tax law into effect has definitely helped the country's economy and made it an even more desirable place to do business and live.
In Antigua and Barbuda, an individual is considered a tax resident if they meet the following criteria:
If you meet either of these criteria, you will be deemed a tax resident of Antigua and Barbuda and will be subject to taxation on your worldwide income. This means that income earned both within and outside Antigua and Barbuda will be subject to taxation.
The tax rates in Antigua and Barbuda are relatively low compared to other countries in the region. There are some exemptions and deductions that you can claim to reduce your taxable income, such as charitable donations, medical expenses, and pension contributions.
Legal entities, such as companies, are subject to taxation in Antigua and Barbuda. Taxation depends on the company's tax residency status.
A company is considered a tax resident of Antigua and Barbuda if it is incorporated under the laws of the country or if its management and control are exercised within the country. Tax-resident companies are subject to taxation on their worldwide income.
A company that is not incorporated in Antigua and Barbuda and does not have its management and control within the country is considered a non-tax resident company. Non-tax-resident companies are generally subject to taxation only on their income derived from within Antigua and Barbuda.
In relation to taxes for companies, the following tax rates are applicable:
It is important to note that tax incentives and special rates may apply to certain sectors or industries, such as tourism or manufacturing, to promote economic development and investment in the country. For example, the corporate tax rate for banks is 22.5%, while the rate for oil, telecommunications, and insurance companies is 10%.
Antigua and Barbuda do not impose a personal income tax. In addition, tax residents are not taxed on dividends, royalties, or interest. Only non-tax residents pay a withholding tax of 25%.
Value Added Tax (VAT) is a consumption tax that is levied on the supply of goods and services in Antigua and Barbuda. If you operate a business in Antigua and Barbuda, you are required to register for VAT if your annual turnover exceeds a certain threshold, which is currently set at EC$300,000. Once registered, you are required to charge a rate of 15% on your goods and services and remit the VAT to the government on a quarterly basis.
The companies that operate restaurants and hotels have to pay 14% VAT.
If you are a consumer in Antigua and Barbuda, you are required to pay VAT on the goods and services that you purchase, unless they are exempt or zero-rated. Some of the goods and services that are exempt from VAT include basic food items, educational materials, and medical supplies. Zero-rated goods and services include exports, international transport, and certain financial services.
Property tax is a tax that is levied on the market value of real estate owned by individuals and legal entities in Antigua and Barbuda. The tax rate varies depending on the type and location of the property, and it is payable annually to the government. Property tax is assessed by the Valuation Department, which uses a formula based on the market value of the property, the location, and the type of use.
In Antigua and Barbuda, property taxes may apply to buyers, sellers, and owners of real estate. However, please note that tax laws and regulations can change, so it's important to consult with a tax professional or refer to the official tax authorities for the most up-to-date and accurate information regarding property taxes in Antigua and Barbuda.
If you are a resident of Antigua and Barbuda, you are required to pay taxes on your worldwide income, including the income generated outside of the country. However, if you are a non-resident, you are only required to pay taxes on the income generated within Antigua and Barbuda. Therefore, if you have foreign income, such as dividends, interest, or capital gains, you are required to declare it in your tax return and pay taxes on it at the applicable rate.
Antigua and Barbuda has signed double tax treaties with several countries, including the United States, Canada, and the United Kingdom, to avoid double taxation of income. These tax treaties may provide provisions regarding the taxation of foreign income, including rules for determining residency, the allocation of taxing rights, and relief from double taxation. If you are a resident of one of these countries, you may be entitled to a tax credit or exemption for the taxes paid in Antigua and Barbuda, depending on the provisions of the treaty.
Tax compliance is an important aspect of the tax system in Antigua and Barbuda, as failure to comply with the tax laws can result in penalties and interest charges. If you are required to file a tax return, you must do so by the deadline, which is usually March 31st of the following year. If you are required to pay taxes, you must do so by the due date, which is usually April 30th of the following year.
If you fail to file the tax return or pay the taxes on time, you may be subject to penalties and interest charges, which can accumulate over time. In addition, the Inland Revenue Department may take legal action to recover the taxes owed, such as garnishing your wages, seizing your assets, or placing a lien on your property.
Antigua and Barbuda provides various tax exemptions and incentives to promote economic development, attract investment, and support specific sectors or activities. Here are some common examples:
Tax planning is an important aspect of managing your finances in Antigua and Barbuda, as it can help you reduce your tax liabilities and maximize your after-tax income. Some of the tax planning tips for individuals and businesses in Antigua and Barbuda include:
The Citizenship by Investment (CBI) program in Antigua and Barbuda is a government initiative that allows eligible individuals and families to obtain citizenship and become tax residents in exchange for making a qualifying investment in the country.
A passport from Antigua and Barbuda does not automatically make its holder a resident for tax purposes. A citizen must spend more than 183 days in the country each year to qualify as a tax resident.
Antigua and Barbuda
Residence Permit Advantages
Antigua and Barbuda
Citizenship
Processing Time and Terms
Enter your estimated application start date for Antigua and Barbuda citizenship and receive a clear timetable for the entire procedure
1
Sign a service agreement, fill out application forms, and pay the initial service and due diligence fees.
14
We compile a document package and submit it for due diligence performed by Antigua and Barbuda CBI unit
90
Due diligence and background check conducted by the state
30
We submit your citizenship application once we receive the approval, and you make payment of the outstanding investment amount, government fees, stamp duty, and other fees.
14
We supervise the issuance of your passport by Antigua and Barbuda and send your Certificate of Citizenship and passport by DHL Express.
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Victoria
Lead Attorney at Golden Harbors
Victoria
Lead Attorney at Golden Harbors