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VAT Introduced In Saint Lucia

by Amanda Banks, Tax-News.com, London

02 October 2012


A last minute concession was secured by St. Lucian hoteliers prior to the introduction of a value-added tax (VAT) regime in the island on October 1, 2012.

Hotels, representing a significant proportion of the businesses that will be required to levy VAT, had threatened to shut up shop just prior to its introduction if an exemption from the levy was not secured for 'service charges' received by hotel industry workers, which serve to top up their wages. In meetings just days before the VAT's introduction, the government gave in to pressure to introduce an exemption.

With the introduction of VAT on October 1 - one month later than originally scheduled - St Lucia becomes the final independent territory in the Caribbean Community to introduce such a levy. With a headline rate of 15%, St Lucia's VAT regime will be comparatively less punitive than in other CARICOM territories. Presently only Haiti and Belize have lower headline rates at 10% and 12.5%, respectively, although the Turks and Caicos Islands is due to introduce an 11% VAT from April 2013. The government of St. Lucia earlier agreed to a concessionary rate of 8% for the hotel industry.

The VAT registration threshold has been set at XCD180,000 (USD66,000). The levy replaces the island's consumption tax, environmental protection levy, motor vehicle rental fee, mobile cellular telephone tax, and hotel accommodation tax.

TAGS: tax | business | value added tax (VAT) | Saint Lucia | law | travel and tourism

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