St Lucia Budget Announced

by Amanda Banks, Tax-News.com, London

04 May 2010

Saint Lucia’s Prime Minister and Minister for Finance, Stephenson King has announced a number of tax measures as part of the 2010 budget.

The measures include:

• Introducing a 15% withholding tax on interest paid to non-residents
• The tightening of stamp duty regulations regarding the conveyance, transfer, sale or otherwise of the debenture stock, debt or shares of any company or corporation to prevent opportunities for tax avoidance
• A change in the property tax assessment regime to an open market system from the current regime based on annual rental values; and
• An increase in the cellular tax on mobile phones from 10% to 15% from May 1, 2010.

Discussing the island’s International Financial Centre (IFC) in the budget document, King said that the area of the island’s economy remained small in comparison to neighbouring jurisdictions, and disclosed that it experienced little growth during the downturn. According to the budget document, 355 new International Business Companies (IBCs) were registered during 2009, compared with the 584 in 2008. However, re-registrations of IBCs increased significantly to 2,105 compared with 1,882 in 2008.

“Despite the recent turmoil in the international financial sector, Saint Lucia has embarked on an ambitious program to strengthen and expand this sector. In partnership with the Caribbean Financial Action Task Force (CFATF), ECCB (Eastern Caribbean Central Bank), and other regulatory agencies, Saint Lucia undertook a series of initiatives to ensure that the country remains a reputable jurisdiction,” King said in his budget address.

“In response to the second mutual evaluation conducted by the Caribbean Financial Action Task Force, a new and upgraded Money Laundering Act (the Money Laundering Prevention Act of 2010), and amendments to other critical legislative instruments including the Proceeds of Crime Act, Anti Terrorism Act, among others, have been enacted, allowing Saint Lucia to be fully compliant with international standards,” King added.

King also noted the signing of several tax information exchange agreements (TIEAs), which he said will further shore up the island’s international reputation. The territory is nearing placement on the Organization for Economic Cooperation and Development's white list of territories that have substantially implemented the internationally agreed standard in transparency and tax information exchange, and King disclosed that the territory would soon be signing agreements with Aruba, Germany, the seven Nordic countries and Canada. Saint Lucia already has TIEAs with the United Kingdom, France, Australia, Ireland, Belgium, the Netherlands, the Netherlands Antilles and Denmark.

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