Trinidad and Tobago 2012 - invesTT

Taxation
• Interest earned by resident individuals in accounts held with
local banks and financial institutions
• Severance payments due to redundancy or retirement and
certain other payments on termination of office or employment
are exempt to a maximum of TT$300,000.00
Territorial Rules
An individual is taxable in respect of income accruing in or derived
from Trinidad and Tobago. The resident individual is subject to tax
on his world income.
In the case of income arising outside of Trinidad and Tobago to
persons who are not ordinarily resident or not domiciled in Trinidad
and Tobago, tax is payable on the amount received in Trinidad
& Tobago; but where the employment or office of such person
is exercised in Trinidad and Tobago, gains or profits from such
employment are taxed in Trinidad and Tobago whether received in
Trinidad and Tobago or not.
Taxation of Employment Income
Salary and emoluments are subject to a withholding tax called Pay-
As-You-Earn (PAYE), which is deducted by the employer at time of
payment. Salaries of non-residents also attract PAYE. The section
assumes that the employer is a resident or has a tax presence in
Trinidad and Tobago, which makes him subject to the jurisdiction of
the Act. The normal withholding tax provisions referred to above do
not apply to salary and emoluments.
Other Matters Impacting Employment Income
Pension fund plans, individual retirement plans, savings plans and
profit-sharing plans, which are not approved by the Board of Inland
Revenue, do not legally secure employee tax benefits.
An individual may claim up to TT$30,000 in the aggregate as
deductions in respect of pensions and/or deferred annuities and
National Insurance contributions. Interest on investment loans,
subject to exceptions, is a deductible expense (in ascertaining an
individual’s taxable income). Interest on a loan taken to acquire
shares in companies quoted on the Stock Exchange is not an
allowable deduction.
A person who became a first time homeowner between the period
January 1, 2003 and December 31, 2005 is entitled to an allowance
of TT$10,000.00 per year for the first five (5) years commencing
from the year in which the house was acquired. Effective January
1, 2011, an individual who acquires a home (for the first time) is
entitled to an allowance of TT$18,000.00.
Obtaining an Income Tax File Number
An Income Tax File Number is obtained through the Board of Inland
Revenue (BIR), which falls under the Ministry of Finance. This
number is used to submit income tax payments, as well as health
surcharge payments. An application for BIR Number Form must
be completed and accompanied by a listing of individual directors’
names, addresses and personal BIR income tax numbers, and
the original (plus a copy) of Certificate of Incorporation for the
said company. All employees of the company must submit health
surcharge payments. The numbers used for such payments are
their income tax file numbers.
Other Taxes
VAT
Value Added Tax (VAT) is essentially a consumption tax that was
introduced in Trinidad and Tobago on January 1, 1990. This is a tax
levied at the rate of 15% on the value of imports and the value of
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