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Trinidad And Tobago's Budget Focused At Companies

by Mike Godfrey, Tax-News.com, Washington

31 December 2019


Caribbean territory Trinidad and Tobago announced changes to corporate tax breaks in its 2020 Budget, in which it committed to clear the almost TTD4.5bn (USD664m) in unpaid VAT refunds.

The territory's Ministry of Finance, Colm Imbert, explained that the territory "inherited" TTD4.5bn in VAT arrears when it assumed office in September 2015. It has committed to begin clearing these refunds, in part through tradable, interest-bearing government bonds worth TTD3bn, which will earn interest at 1.5 percent per year. Further details are to be released in the Finance Act in December 2019.

The Government announced a number of tax changes for companies and enforcement iniatives to fund the repayments. The new Trinidad and Tobago Revenue Authority (TTRA) will be launched in fiscal year 2020, with extra resources and freedoms, and the Government will focus efforts to improve property tax and gambling sector receipts, Imbert said.

The salient tax changes for companies include:

  • A reduction in the capital allowance for energy companies involved in exploration and development, to 20 percent per year, to be computed on a straight-line basis over five years. Currently, the allowance is 50 percent in the first year, 30 percent in the second, and 20 percent in the third year;
  • Natural gas and oil exploration and development companies' loss relief rate will be reduced from 100 percent to 75 percent; and
  • There will be an increase to the investment tax credit for energy companies from 20 percent to 25 percent. The Government said the increase will give companies the ability to claim 25 percent of the expenditure on development activity for mature fields and enhanced oil recovery projects as a credit against their Supplemental Petroleum Tax Liability.

Finally, the Budget will increase the solar water-heating equipment tax credit from 25 percent to 100 percent, up to a maximum of TTD10,000.

These measures will take effect from January 1, 2020.

TAGS: Finance | tax | investment | value added tax (VAT) | property tax | interest | energy | Trinidad and Tobago | enforcement | gambling | tax breaks | VAT refunds | Tax

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