St. Kitts and Nevis is a beautiful twin-island nation located in the Caribbean. The country is known for its stunning beaches, rich culture, and welcoming people.
St. Kitts and Nevis has the world's first and most popular Citizenship by Investment (CBI) program, which permits individuals to obtain citizenship and a second passport in exchange for a substantial financial investment in the country. Since 1984, the CBI program has been operating successfully, attracting many wealthy individuals and investors who seek visa-free travel, international mobility, and business opportunities. Investors participating in the CBI program benefit from zero taxation in Saint Kitts and Nevis.
In this comprehensive guide, we will explore the tax system in St. Kitts and Nevis, including personal income tax, corporate tax, value-added tax, property tax, and other taxes. We will also discuss tax residency, tax planning, and the St. Kitts and Nevis Citizenship by Investment (CBI) program.
Tax System in St. Kitts and Nevis
St. Kitts and Nevis has a simple and straightforward tax system. The country levies various taxes on individuals and businesses.
Individual taxation in this country is considered to be among the best in the world. Personal income, inheritance, wealth, and gifts are not taxable in this jurisdiction. Capital gains tax (at a rate of 20%) is only levied if the asset is sold within 12 months of its acquisition date.
St. Kitts and Nevis has developed a reputation as an offshore financial center, offering various financial services and incentives to international businesses and investors. These include tax incentives for offshore banking, insurance, and international trusts. The offshore sector is regulated by the Financial Services Regulatory Commission.
Tax Residency in St. Kitts and Nevis
If you are planning to move to St. Kitts and Nevis, you should understand the concept of tax residency. Tax residency is a crucial factor that determines your tax obligations in St. Kitts and Nevis.
Tax residency is determined based on the individual's physical presence in the country. The tax residency rules are as follows:
- Resident Individual: An individual is considered a tax resident in St. Kitts and Nevis if they spend 183 days or more in the country during a calendar year. The days do not need to be consecutive but are cumulative throughout the year. As a tax resident, you are required to pay taxes on your worldwide income.
- Non-Resident Individual: If an individual spends fewer than 183 days in St. Kitts and Nevis during a calendar year, they are considered a non-resident for tax purposes. Non-residents are generally not subject to personal income tax on their worldwide income earned outside of St. Kitts and Nevis.
You can be a non-resident even if you hold Saint Kitts and Nevis citizenship and a passport.
It is worth noting that St. Kitts and Nevis has signed double taxation agreements with several countries to avoid double taxation of income. If you are a tax resident of a country that has a double taxation agreement with St. Kitts and Nevis, you may be eligible for tax relief. Additionally, residents may be eligible for certain tax benefits and incentives available under the local tax laws.
Personal Income Tax in St. Kitts and Nevis
- There are no individual income taxes in St. Kitts and Nevis, regardless of tax residency.
- Tax residents are not required to pay any taxes on dividends or royalties received from within Nevis or St. Kitts, whereas non-residents must pay 15% taxes on dividends or royalties received from within Nevis or St. Kitts. Nothing imported from other countries will be taxed.
- Individuals working in St. Kitts and Nevis must pay a 5% tax to the social security fund on their salaries earned in the country. However, such payment shall not exceed XCD (East Caribbean Dollars) 6,500.
Corporate Tax in St. Kitts and Nevis
The company tax rate in St. Kitts and Nevis is a flat 33% and is based on a company's net profit. There are also other types of taxes that are related to legal entities. Please see the table below.
*Tax resident companies: companies that are incorporated in St. Kitts and Nevis and managed by local directors;
*Non-resident companies are companies that are registered and managed outside St. Kitts and Nevis.
Value Added Tax (VAT) in St. Kitts and Nevis
The current VAT rate in St. Kitts and Nevis is 17%. VAT is collected on taxable supplies made to their customers, and businesses are allowed to claim input VAT credits for VAT paid on their business-related purchases.
When selling goods (both retail and wholesale), you must register for VAT.
- At the end of any period of 12 months or less, your total value of taxable supplies exceeds $150,000; or
- At the beginning of any period of 365 calendar days, there are reasonable grounds to expect that the total value of your taxable supplies will exceed $150,000.
When providing services (professionals and those involved in commercial and time-share property for lease), you must register for VAT:
- You render services, and the dollar value of fees charged exceeds $96,000 within a period of 12 months or 365 days at the end of any period of 12 months or fewer months.
There are three rates of VAT, depending on the services and goods provided by the businesses. The rates are:
- Standard: 17%
- Reduced: 10% (hotel accommodation and restaurants)
- Zero: 0%
While most goods and services are subject to the standard VAT rate of 17%, certain supplies may be exempt or subject to a zero rate. Exempt supplies are not subject to VAT, while zero-rated supplies are taxed at a rate of 0%.
Examples of exempt supplies can include certain financial, educational, transportation, insurance, etc. services, whereas zero-rated supplies may include exports of goods and services, depending on the product itself. Such goods as flour, sugar, milk (not condensed, chocolate, cream, or soy), rice (white and brown), oats, and bread are zero-rated.
Property Tax in St. Kitts and Nevis
St. Kitts and Nevis has a property tax system. Property tax is levied on the market value of real estate in St. Kitts and Nevis. Property tax is generally imposed on land and buildings owned by individuals, businesses, or other entities within St. Kitts and Nevis. This includes residential properties, commercial properties, vacant land, and rental properties.
The tax rate ranges from 0% to 0.3%, depending on the value of the property and its location. Property owners are required to file their tax returns by March 31 of each year.
There is also a stamp duty of about 6–10% when transferring ownership of the property.
Investors who apply for the CBI program through real estate purchases are exempt from paying taxes on the transfer of ownership.
Other Taxes in St. Kitts and Nevis
St. Kitts and Nevis may impose the following taxes:
- Environmental Levy: This tax is levied on certain goods that have an environmental impact, such as plastic bags and Styrofoam containers. The rate of the environmental levy varies depending on the type of goods. The rate is typically expressed as a percentage of the value of the goods.
- Gaming tax: This tax is levied on gambling activities in St. Kitts and Nevis.
- Hotel accommodation tax: This tax is levied on hotel accommodation in St. Kitts and Nevis.
- Excise tax: St. Kitts and Nevis does not levy an excise tax on specific goods such as alcohol, tobacco, or petroleum products compared to other Caribbean countries.
Tax Incentives for businesses in St. Kitts and Nevis
St. Kitts and Nevis offers several tax incentives for businesses, including:
- Tax holidays: New businesses are eligible for a tax holiday of up to 15 years.
- Duty-free imports: Businesses are eligible for duty-free imports of raw materials and equipment.
- Investment tax credits: Businesses are eligible for investment tax credits of up to 50% of their capital expenditures.
Benefits of Becoming a Tax Resident in St. Kitts and Nevis
Becoming a citizen of St. Kitts and Nevis has several tax benefits, including:
- Access to a friendly and welcoming community;
- No inheritance tax;
- No capital gains tax;
- No wealth tax;
- No personal income tax rates;
- Low taxes on property;
- VAT exemption schemes;
- No global income tax for non-resident companies;
- Favorable tax incentives for businesses.
Filing Taxes in St. Kitts and Nevis
The tax year in St. Kitts and Nevis runs from January 1 to December 31. The government has implemented a modern and efficient tax system that makes it easy for individuals and businesses to file their taxes online.
In St. Kitts and Nevis, the deadlines for filing tax returns can vary depending on the specific tax type and the taxpayer's circumstances.
Personal Income Tax:
- For individuals on a calendar year basis, the deadline for filing personal income tax returns is usually on or before March 31st of the year following the tax year.
- Self-employed individuals may have different filing deadlines, typically within three months after the end of their fiscal year.
- Failure to file personal income tax returns by the deadline may result in penalties and interest charges.
Corporate Income Tax:
- Companies in St. Kitts and Nevis are required to file their corporate income tax returns within four months after the end of their fiscal year.
- The specific deadline can vary based on the company's fiscal year-end.
- The annual interest rate on overdue payments is 12%. You must pay a 5% penalty plus an additional 1% for each month that you are late in filing your return.
Value Added Tax (VAT):
- VAT returns in St. Kitts and Nevis are typically required on a monthly or quarterly basis, depending on the taxpayer's turnover threshold.
- The deadline for filing VAT returns and making any VAT payments is usually on or before the 15th day of the month following the reporting period.
- Failure to file VAT returns and remit the VAT owed by the deadline may result in penalties and interest charges.
Overview of the St. Kitts and Nevis Citizenship by Investment (CBI) program
The St. Kitts and Nevis Citizenship by Investment (CBI) program allows foreign nationals to obtain citizenship by investing in the country and enjoy all tax benefits.The program was established in 1984 and is one of the oldest and most reputable CBI programs in the world.
Here is an overview of the St. Kitts and Nevis CBI program:
The program offers two main investment options for obtaining citizenship:
- Sustainable Growth Fund (SGF): Applicants can make a non-refundable contribution of at least S150,000 to the SGF, which supports various sectors of the St. Kitts and Nevis economy, including healthcare, education, infrastructure, and tourism
- Real Estate Investment: Applicants can invest in designated real estate projects worth at least $200,000, such as luxury resorts, hotels, or villas. The investment must be held for a specified period, typically five years.
To qualify for the St. Kitts and Nevis CBI program, applicants must meet certain criteria, which may include:
- Minimum age requirement for the main applicant and dependents.
- Good character and reputation.
- No criminal record.
- Proof of source of funds for the investment.
- Compliance with health and medical requirements.
Processing and Due Diligence:
All applicants undergo a thorough due diligence process, which involves background checks and vetting procedures to ensure the integrity of the program. This process is conducted by the government or authorized agencies.
Benefits of Citizenship:
- Citizenship: Successful applicants and their eligible family members are granted full citizenship of St. Kitts and Nevis, including the right to live, work, and study in the country
- Visa-free Travel: St. Kitts and Nevis citizens enjoy visa-free or visa-on-arrival access to many countries worldwide, including the Schengen Area and the United Kingdom.
- Tax Advantages: St. Kitts and Nevis offers several tax advantages, including no wealth, inheritance, or capital gains taxes.
- Dual Citizenship: St. Kitts and Nevis permits dual citizenship, allowing individuals to retain their current citizenship while obtaining citizenship through the CBI program.
The application process for the St. Kitts and Nevis CBI program involves submitting the necessary documents, forms, and supporting evidence and takes about 2-6 months. The entire process is handled online by Golden Harbors.
- Is the St. Kitts and Nevis passport widely recognized?
Yes, St. Kitts and Nevis passport is widely recognized and accepted for visa-free or visa-on-arrival travel to over 157 countries worldwide. Including the EU, UK, Hong Kong, and Singapore.
- How long does it take to obtain St. Kitts and Nevis citizenship and a passport?
It will take approximately six months to obtain a passport from Saint Kitts and Nevis. St. Kitts and Nevis offers an accelerated application process that, for an additional $25,000, expedites the passport application process to 45-60 days.
- Is there a requirement to reside in St. Kitts and Nevis after obtaining citizenship?
No, there is no requirement to reside in St. Kitts and Nevis before, during, or after the citizenship application process. To become a tax resident of St. kitts and Nevis you have to live there 183 days or more per year.
- Can I include my family members in my application?
Yes, the St. Kitts and Nevis CBI program allows for the inclusion of family members, including your spouse, dependent children, and dependent parents or grandparents.
- Is getting citizenship in St.Kitts and Nevis confidential?
Yes. The participants in St. Kitts and Nevis' CBI program are not the subject of any reports or publications. Therefore, if the nation of your first citizenship forbids dual citizenship, you need not fear losing your first passport. St. Kitts will also make sure that your second passport is kept secret if that is something you prefer.
Secure your future today with St. Kitts and Nevis citizenship by investment program together with Golden Harbors. Contact our team right now.