Antigua and Barbuda is a small country in the Caribbean, known for its beautiful beaches and warm climate. In this article, we will explain how the taxation system works in Antigua and Barbuda, whether the country offers any double taxation agreements, the main taxes expats need to be aware of, any special tax breaks that could apply to expats, how and when to file a tax return as an expat, and the tax exit procedures for anyone leaving Antigua and Barbuda to move abroad.
The Taxation System in Antigua and Barbuda
Antigua and Barbuda has a territorial taxation system, meaning that only income earned in Antigua and Barbuda is subject to taxation. The tax system in Antigua and Barbuda is divided into two main types of taxes: direct taxes and indirect taxes.
Direct taxes are taxes paid on income and wealth, and they are paid by individuals and companies. The main direct taxes in Antigua and Barbuda are the personal income tax (PIT) and the corporate tax (CT). The personal income tax is based on a progressive scale that ranges from 0% to 25%, depending on the amount of income earned. The corporate tax, on the other hand, is a flat rate of 25% on profits.
Indirect taxes, on the other hand, are taxes paid on goods and services. These taxes are paid by consumers, and they include the value-added tax (VAT) and excise duties. The VAT in Antigua and Barbuda is currently set at 15%, which is one of the highest in the Caribbean.
Double Taxation Agreements
Antigua and Barbuda has signed several double taxation agreements with other countries to avoid double taxation for individuals and companies. These agreements ensure that income is not taxed twice in both countries, which can result in a significant tax burden for taxpayers. Some of the countries that have signed double taxation agreements with Antigua and Barbuda include the United Kingdom, Canada, and the United States.
Main Taxes in Antigua and Barbuda
As an expat in Antigua and Barbuda, there are several taxes that you need to be aware of. The main taxes include the personal income tax, the corporate tax, and the value-added tax.
Personal income tax (PIT)
The personal income tax in Antigua and Barbuda is based on a progressive scale that ranges from 0% to 25%, depending on the amount of income earned. The tax year in Antigua and Barbuda runs from January 1st to December 31st. As an expat, you are required to pay personal income tax on any income earned in Antigua and Barbuda. This includes income from employment, self-employment, and any other source of income.
Corporate tax (CT)
The corporate tax in Antigua and Barbuda is a flat rate of 25% on profits. Companies are required to file their tax returns by the end of April of the following year. The tax year for companies in Antigua and Barbuda runs from January 1st to December 31st. As an expat, if you own a company in Antigua and Barbuda, you are required to pay corporate tax on any profits earned.
Value-added tax (VAT)
The value-added tax in Antigua and Barbuda is currently set at 15%, which is one of the highest in the Caribbean. The VAT is applied to the sale of goods and services in Antigua and Barbuda, and it is paid by consumers. As an expat, you will need to pay VAT on any goods and services that you purchase in Antigua and Barbuda.
Special Tax Breaks for Expats
Antigua and Barbuda offers several tax breaks for expats who live and work in the country. One of the main tax breaks is the personal allowance, which is a tax credit that can be claimed by individuals to reduce their tax liability. The personal allowance is currently set at XCD 36,000 per year, and it is available to both residents and non-residents of Antigua and Barbuda.
Additionally, Antigua and Barbuda offers a Citizenship by Investment program that allows individuals to obtain citizenship by making a significant investment in the country. This program can offer several tax advantages for expats, including exemption from personal income tax on foreign income and exemption from inheritance tax on assets located outside of Antigua and Barbuda.
Filing a Tax Return in Antigua and Barbuda
As an expat in Antigua and Barbuda, you are required to file a tax return if you have earned income in the country. The tax year in Antigua and Barbuda runs from January 1st to December 31st, and tax returns must be filed by the end of March of the following year. For example, the tax return for the year 2022 must be filed by March 31, 2023.
To file your tax return in Antigua and Barbuda, you will need to obtain a tax identification number (TIN) from the government. You will also need to gather all the necessary documentation, including income statements and receipts for any deductions. The tax return can be filed online through the government’s tax portal, or it can be filed in person at the tax office.
Tax Exit Procedures for Leaving Antigua and Barbuda
If you are an expat leaving Antigua and Barbuda to move abroad, you will need to follow certain tax exit procedures. The first step is to inform the government that you are leaving the country and that you are no longer a tax resident. You will need to provide a letter of departure to the tax authorities, which should include your personal details, the date of departure, and your new country of residence.
Once you have informed the tax authorities of your departure, you will need to file a tax return for the year up to the date of departure. This return must be filed within three months of leaving Antigua and Barbuda. If you have any outstanding tax liabilities, you will need to settle them before leaving the country.
Antigua and Barbuda has a territorial taxation system, meaning that only income earned in the country is subject to taxation. The main taxes that expats need to be aware of in Antigua and Barbuda include the personal income tax, the corporate tax, and the value-added tax. Expats can take advantage of several tax breaks, including the personal allowance and the Citizenship by Investment program. If you are leaving Antigua and Barbuda to move abroad, you will need to follow certain tax exit procedures, including informing the government of your departure and filing a tax return for the year up to the date of departure.