Nevis Domestic Corporate Taxation

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On this Page:

- Nevis Introduction
- Nevis Corporate Income Tax
- Unincorporated Business Tax
- Nevis Capital Gains Tax
- Nevis Withholding Tax
- Nevis Property Taxes
- Nevis Import Taxes

Nevis 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 Regimes and 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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Nevis Corporate Income Tax

Corporate Income Tax has been reduced in the last few years from 40% to 35%. Many businesses may qualify for development and tax concessions under the fiscal incentives act. See Nevis Country and Foreign Investment Regime for more detail.

Taxation is based on financial statements adjusted for inflation. Royalties, exchange losses and interest paid to foreign affiliates are fully deductible without restrictions.

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Unincorporated Business Tax

The Unincorporated Business Act 2010 was passed by the Federation National Assembly on October 26, 2010 and received the Governor General’s assent on October 28. The legislation imposes a 4% tax on every person carrying on business in St. Kitts and Nevis.

Part I of the Act stipulates that the tax does not apply to a company registered under the Companies Act or to a partnership which is treated as a company for purposes of the Income Tax Act, Cap. 20. 22, and is liable to tax under that Act.

The tax applies to any business, profession, trade, venture or undertaking, provision of personal services or technical and managerial skills, and any adventure or concern in the nature of trade, but does not include employment.

The tax base in relation to the supply of goods for a calendar month is the gross takings derived from the supply of goods for the month, reduced (but not below zero) by ECD12,500. In relation to the supply of services for a calendar month, the tax base is the gross takings derived from the supply of services for the month, reduced (but not below zero) by ECD2,000.

The Act further states that for the purposes of subsection (2), gross takings shall be taken into account for the month in which the goods or services are considered to be supplied for purposes of the value-added tax (or would be considered to be supplied for purposes of the value-added tax if the person making the supply were registered for VAT).

In the case of a business carried on by a partnership, each partner is liable for tax relating to the partner’s share of the gross receipts. The partnership may designate one partner to file the returns and pay the tax on behalf of the partners.

Every person carrying on business in Saint Kitts and Nevis who is liable to pay tax under the provisions of section 4 of the Act must, within fifteen days after the end of each calendar month, file a return with the Comptroller in a form to be approved by the Comptroller accompanied by payment of the tax due for that month.

The legislation also states that the provisions of the Tax Administration and Procedures Act, No. 12/2003, relating to the collection and payment of taxes, fees in nature of taxes, and fines or penalties, and such other related matters shall apply to this Act.

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Nevis Capital Gains Tax

There is a capital gains tax of 20% on profits or gains derived from a transaction relating to assets located in the Federation which are disposed of within one year of the date of their acquisition.

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Nevis Withholding Tax

Individuals and ordinary companies remitting payments to persons outside of the Federation must deduct 10% withholding tax from profits, administration, management or head office expenses, technical service fees, accounting and audit expenses, royalties, non-life insurance premiums and rent.

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Nevis Property Taxes

The Nevis Property Tax Ordinance 2007 was passed by the Nevis Island Assembly in April 2008.

The Ordinance modernises the valuation property taxes of Nevis through the introduction of market value as the validation standard for most properties on the island.

Under the Ordinance all property owners - foreign or local – must pay the tax, unless they fall into the exempt category. Any properties of the government; and properties of a statutory body other than a prescribed statutory body are exempt from the property tax. Property owned or leased by or held in trust for a religious body on which is located a building used exclusively for religious worship is also exempt.

• Residential: Improvements 0.156%; Land 0.075%
• Commercial: Improvements 0.3%; Land 0.2%
• Accommodation: Improvements 0.3%; Land 0.2%
• Certified Farming: Improvements 0%; Land 0.01%
• Institutional: Improvements 0.2%; Land 0.15%

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Nevis Import Taxes

Nevis has adopted the common external tariff of CARICOM which ranges from 5% to 20%.

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