This article looks at St. Kitts and nevis tax residence, how to become tax resident there and the benefits that St. Kitts and Nevis tax residency bestows.
The Caribbean nation of St. Kitts and Nevis is a popular offshore jurisdiction for banking and offshore trusts, but there are also some notable tax benefits to be had.
Looking for an offshore jurisdiction that best suits your needs but not sure which one to choose? Talk to the experts at Nomad Capitalist and we’ll help you to go where you’re treated best.
Tax residents in Saint Kitts and Nevis do not have to pay individual income tax or capital gains tax. There is no inheritance tax or gift tax either. With a personal income tax rate of 0% and capital gains tax rate of 0%.
It also helps that the official language of St. Kitts and Nevis is English, making dealings with the Inland Revenue Department more straightforward.
In addition, the legal currency of St. Kitts and Nevis is the East Caribbean Dollar, with a fixed exchange date with the dollar at a rate of $1 USD to $2.70 XCD.
While neither residents nor non-residents are liable to pay income tax, tax residents are not obligated to pay taxes on dividends or royalties. In contrast, non-residents will have to fork out to meet the 15% tax rate on dividends or royalties received in St. Kitts and Nevis.
No personal income tax is one of the factors that has seen the rich flock to St. Kitts and Nevis.
Regarding real property tax, the amount of property tax is determined by the market value of the real property. Property tax also depends on the location and type of property. There is no capital gains tax on the sale of real estate.
However, property taxes do incur stamp duty and land tax. Stamp duty is paid by those selling real estate, while the land ownership license, 10% of the purchase price, has to be acquired by the buyer.
St. Kitts island’s agricultural and institutional properties are exempt from taxes.
However, there is an onus on St. Kitts and Nevis property owners to pay building tax.
The tax system in St. Kitts and Nevis is one of the most favorable in the world.
There is no withholding tax for tax residents of Saint Kitts and Nevis to pay.
Non-tax residents of the islands pay withholding taxes. As a tax resident, you don’t have to pay withholding tax. Corporations will need to file an income tax return, however.
If you want to join the tax residents in Saint Kitts and Nevis, you must reside in St. Kitts and Nevis for a minimum of 183 days a year.
Once you obtain St. Kitts and Nevis tax residency, you are governed by the Income Tax Act. As mentioned, St. Kitts and Nevis does not levy any personal income tax but does operate a worldwide system of corporate income tax, meaning that companies considered tax resident are taxable on a global basis. In contrast, non-resident companies are solely taxable on their income that is sourced within St. Kitts and Nevis.
St. Kitts and Nevis is a Commonwealth jurisdiction that interprets tax residents as companies that are managed and controlled there. So, if a company’s Board of Directors holds meetings in St. Kitts and Nevis, they are residents.
Equally, where the Board of Directors meets outside St. Kitts and Nevis, St. Kitts and Nevis Government will deem them non-residents.
There are certain situations where legal entities can be tax residents in St. Kitts and Nevis and other jurisdictions.
In such circumstances, double tax treaties (including the CARICOM Double Taxation Agreement) provide a tie-breaker test to determine which entity should be deemed tax resident of the two countries.
Domestic companies pay a corporate income tax of 33% on their global income, but companies established by the International Business Companies Act are 100% tax-exempt.
The corporate tax rate is a relatively high 33%. But if Saint Nevis and Kitts resident companies do business with non-resident companies of St. Kitts and Nevis, they are exempt from paying this corporate income tax.
While the tourism sector is subject to a 10% Value Added Tax, there is no VAT on some goods and services. This includes most medical services.
You can get offshore banking with St. Kitts and Nevis tax residency. Offshore banking could be a solution to various tax issues.
The tax rates experienced by investors participating in the citizenship-by-investment program in St. Kitts and Nevis are even more beneficial. This will see you become tax-exempt once you obtain citizenship.
However, you need to factor in a non-refundable contribution through due diligence fees and processing charges.
Tax residency is not the same as St. Kitts and Nevis citizenship. The latter does not require a license to own land or need to pay 10% of the property’s value if they become property owners.
St. Kitts and Nevis citizenship by investment is the oldest investment program of its kind in the world, having been launched in 1984.
For the first half of 2023, this already attractive program introduced a Limited Time Offer of a $25k discount on CBI donations. The temporary amounts are:
- $125k for a single applicant
- $150k for a main applicant and spouse
- $175k for a family of four.
Our seven- and eight-figure entrepreneur and investor clients are typically liable to pay large sums of income tax. However, we advise them on how to legally reduce their income tax obligations.
St. Kitts and Nevis tax residence can certainly help to alleviate these tax woes, but as always, getting the right advice upfront is vital.
So if you’re looking for ways to enjoy significant reduction on your taxes, that are fully compliant and not overly complicated, talk to our team today.