In this article on taxes in Antigua and Barbuda, we will answer all your questions about becoming a tax resident and the benefits in our comprehensive tax guide.
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Before giving you the lowdown on Antigua and Barbuda’s tax regime, let’s look at these two Caribbean islands.
Antigua and Barbuda – Country Overview
Antigua and Barbuda is an independent country made up of two namesake islands and several smaller islands, with miles of reef-lined beaches. But the beaches are just the beginning.
In 1967, Antigua and Barbuda became a self-governing state within the British Commonwealth and became independent in 1981.
Antigua and Barbuda is one of the wealthiest nations in the Caribbean. This success is thanks to both its tourism industry, but also its offshore financial services.
Once financially struggling, the island nation has been transformed into a competitive financial services economy and a high standard of living. The currency is the Eastern Caribbean dollar which is pegged to the US dollar at a rate of $1 USD to $2.70 XCD.
Would you like to become a tax resident here? Would you like to learn more about Antigua and Barbuda taxes? What are the tax incentives? Our Antigua and Barbuda tax guide covers its taxes, including sales, value-added, and wealth taxes.
Antigua and Barbuda Personal Taxes
There is no personal income tax in Antigua and Barbuda. This tax was abolished as of April 2016 as part of tax reforms.
You won’t have to pay capital gains or inheritance tax in this jurisdiction. Another tax benefit of being an Antigua and Barbuda tax resident is the absence of wealth tax.
However, gifts may be subject to transfer tax.
Antigua and Barbuda’s tax benefits have made it an attractive destination for business and lifestyle.
Antigua and Barbuda, however, is not tax-free, and if you are a US citizen, you will still have to declare any worldwide income to the IRS, including any income accrued on the islands.
How to Get Tax Residence in Antigua and Barbuda
The appeal of Antigua and Barbuda as a tax residency is its 0% personal income tax. So if you’re looking for a favorable tax system, this Caribbean country is a good place to start.
You can apply for tax residence online once you meet specific requirements. You can choose from two options to enjoy tax-free status on these islands. The first one includes spending 183 days a year in Antigua and Barbuda.
If your schedule doesn’t allow you to spend much time on a tropical island, Antigua and Barbuda does have a second option for you. You must maintain a place of residence in Antigua and Barbuda (leased or owned), spend at least 30 days a year there, and pay a flat tax of $20,000 annually.
Keep in mind, however, that you can not establish a tax residence anywhere else if you wish to stay tax residents in the islands.
This second type of Antigua and Barbuda tax residency works best if you are a wealthy entrepreneur or a perpetual traveler. Ensuring you are exempt from being taxed on your worldwide income.
After applying to become a tax resident in Antigua and Barbuda, it takes one to four months to complete the process and receive your tax ID number.
By signing up for this investment program, you can avoid double taxation in countries with which this pair of islands has taxation treaties, like fellow Caribbean states and the United Kingdom. In addition, a foreign tax credit is available to those who have paid or are liable for British Commonwealth income tax.
How to Pay Tax in Antigua and Barbuda Through Residence and CBI
To become a tax resident in Antigua and Barbuda you must reside in the country for 183 days. This means that you must first establish residence status in the country allowing you to legally reside in the country.
Through Residence in Antigua and Barbuda
To obtain permanent residency in Antigua and Barbuda, fill in the Permanent Residence Scheme application form and return it to the Ministry of Legal Affairs. Sections include:
- name, permanent address, business address
- type of business, annual gross income, and source of gross income
- Antigua and Barbuda residential address, contact info
- passport details
- date and place of birth, nationality, marital status, sex
- name of spouse and names of children under 18, and dates of birth
- names and addresses of two referees
- status of application and name and address of any agent
- criminal record
You will need to submit the following documents with your application:
- certified copy of your birth certificate
- certified copy of your passport biometrics page
- two passport-sized photographs
- original police report for the past two years
- original bank reference letter
- testimonials from your two referees
- original medical reports, signed and stamped by the physician
- certified copy of the Certificate of Naturalization (if applicable)
- lease or title to the property in Antigua and Barbuda
Citizenship of Antigua and Barbuda
Another way of gaining tax residency includes becoming a citizen.
Citizenship can be acquired via the citizenship by investment program, which consists of investment in real estate, the National Development Fund, or the University of West Indies Fund.
As a Nomad Capitalist client we can talk you through the different options to help find the best solution for your needs.
Antigua and Barbuda Corporate Taxes
The corporate tax rate in Antigua and Barbuda is 25%.
A company is considered a resident company and liable for corporate tax if it is:
- managed and controlled in Antigua and Barbuda
- operates in Antigua and Barbuda
- incorporated in Antigua and Barbuda
- receives income from Antigua and Barbuda
- owns assets in Antigua and Barbuda that are used to generate income
Unincorporated businesses tax is applied on a sliding scale with rates ranging from 0% to 25% of gross income, whether it is local or worldwide income derived from other countries.
Non-resident companies are liable to unincorporated business taxation on income derived from within Antigua and Barbuda only. Unincorporated business tax is due quarterly instead of annually.
What is the Sales Tax on the Islands?
Antigua sales tax is similar to VAT. Antigua and Barbuda sales tax (ABST) is generally fixed at 15%. There are exceptions to this Antigua tax, however. Sales tax lowers to 10.5% when it comes to hotels and holiday accommodations incur a 12.5% sales tax. These are exempt supplies.
Do You Have to Pay Property Tax to the Inland Revenue Department?
Yes and no. Yes, you do have to pay property tax on the market value of any residential purchases in Antigua. No, you do not have to pay property tax on the market value if you buy a residence in Barbuda. It is a uniquely Antigua tax.
Is There a Stamp Duty Levied on the Islands?
Yes, stamp duty is applied to real estate transactions. The seller pays 7.5% of this stamp tax, and the buyer contributes 2.5% of the taxable value.
What is the Tax Period in Terms of Tax Year and Tax Return?
The tax year is based on the company’s fiscal year-end, and the due date for tax returns is March 31. There are no tax holidays. The tax return date is final.
What are the Controlled Foreign Corporation rules in Antigua and Barbuda?
Antigua and Barbuda doesn’t have any Controlled Foreign Corporation rules in place. Ownership of the offshore company by a person resident in Antigua and Barbuda will have no impact on that company’s tax status except if that company is managed and controlled from Antigua and Barbuda.
What Are the Consequences of Trading With an Antigua and Barbuda Resident Company?
If an offshore company makes money from a company based within the islands, that money will be considered coming from Antigua and Barbuda and will be subject to taxes there. Companies registered, incorporated, or continued in Antigua and Barbuda must pay a 25% tax on all their profits.
What is Considered an International Business Corporation in Antigua and Barbuda?
An International Business Corporation (IBC) is a tax-exempt company requiring only one shareholder and one director who can be the same person or legal entity from any country. Foreigners may own all of the corporate shares in an IBC.
There is a 50-year tax exemption for IBCs in Antigua and Barbuda. This tax liability exemption applies to most forms of income, dividends, interest, and royalties paid by and to foreigners.
While there is no requirement to file audited accounts or annual returns with the authorities, a company is required to keep financial records, which should reflect the financial position of a company.
Antigua and Barbuda IBCs cannot trade within Antigua and Barbuda or own real estate there. An IBC cannot offer its shares for sale to the public.
An Antigua and Barbuda IBC cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship, the rendering of investment advice, or any other activity that would suggest an association with the banking or insurance industries. This refers to all financial institutions.
What Benefits Do International Business Corporations Enjoy in Antigua and Barbuda?
Entirely Foreign Shareholders
All of the shareholders can be foreigners.
Tax-Free
IBCs pay no taxes of any kind. However, U.S. taxpayers and everyone subject to global income taxation must report all income to their governments.
Privacy
The names of beneficial owners and shareholders are never included in any public records.
Asset Protection
The IBC’s assets are never disclosed in public records and are owned by the IBC as an independent legal body from the shareholders.
Fast Formation
An IBC can be formed and registered within one day.
One Shareholder/One Director
Only one shareholder is required who may be the sole director for total control of the IBC.
No Minimum Capital
There is no minimum authorized capital requirement.
Avoid Securing Corporate Residence and Tax Residence in the Same Location
You can avoid paying corporate tax by not working in Antigua and Barbuda. Even better, appoint a nominee director and employ at least one employee offshore if you wish to live in Antigua and Barbuda.
You can avoid paying corporate tax by not working in Antigua and Barbuda. Even better, appoint a nominee director and employ at least one employee offshore if you wish to live in Antigua and Barbuda.
In summary, residents of Antigua and Barbuda benefit from no capital gains tax, no estate taxes, and no personal income tax rates. There is no VAT, but there is a sales tax instead of a value-added tax.
There are more options than you might think when setting up a lifestyle that allows you to pay zero or very low taxes. We’re here to help you get it right.
There is a tax residency out there just for you. At Nomad Capitalist, we are experts in identifying the right jurisdiction for our clients. We draw on years of specialist experience to help you benefit from the lowest tax rates.
