28 July 2022

Understanding Taxes and Tax Residency In St Lucia

St Lucia adheres to the 183 day rule where individuals can obtain tax residency in St Lucia by simply residing in the country for more than 6 months in the fiscal year. Unlike with St Kitts & Nevis citizenship-by-investment (CBI) program, St Lucia does not automatically confer tax residency upon a successful completion of the St Lucia CBI program. St Lucia´s Inland Revenue Department defines tax residents by the following categories:

  • Individuals resident or ordinarily resident in St Lucia are subject to personal income tax on global income
  • Individuals resident but not ordinarily resident are subject to personal income tax on their St Lucia source income and foreign-source income remitted to the country
  • Individual non-residents are taxed on their income from St Lucia sources and income from foreign-sources remitted to the country

St Lucia requires an annual tax return to be filed, however they have streamlined the process to make it easier for residents and non-residents.

The currency used in St Lucia is the Easter Caribbean Dollar (XCD).

Taxes in St Lucia

Capital Gain, Dividends, Inheritance, Wealth, Gift and Withholding Tax

St Lucia does not impose any taxes on capital gains, inheritance, wealth, gifts or withholding tax for residents or non-residents.

Income Tax

St Lucia imposes a progressive income tax scale:

St-Lucia-Income-Tax

Social Contributions

Employees are subject to 5% social security contributions and employers are required to match 5% of the employee´s wage.

Interest & Royalties

St Lucia imposes the following tax rates on any interest and royalties generated within St Lucia:

St-Lucia-interest-royalties

Withholding Tax

St Lucia does not impose any withholding taxes on residents or non-residents whereas corporations may be subject to withholding tax.

Corporate Tax

St Lucia companies are not subject to any capital gains or dividend tax.

Resident companies will be subject to a corporate tax rate of 30% on global income, with 10% tax rate imposed on interest and royalties.

Non-resident companies are tax exempt on all foreign sourced income, however will be subject to 25% withholding tax on local income and 15% on interest/p>

St Lucia companies are required to file income tax returns, even if the corporation did not conduct any transactions during the year.

VAT

The standard VAT is 12.5% with a reduced VAT 10% for hotel and restaurants and 0% for certain goods and services such as education and medical services and essential food items such as milk and bread.

Stamp Duty

St Lucia imposes a stamp duty of 2-10% depending on the type of instrument being transferred as well as the tax residency status of the seller.

Property Tax

St Lucia imposes property taxes accordingly:

st-lucia-property-tax

Regulatory

CRS requires financial institutions to identify customer tax residencies and report financial accounts held directly or indirectly by foreign tax residents to local tax authorities. It also requires tax authorities (in participating countries) to exchange this information. St Lucia currently holds a bilateral agreement with: Aruba, Australia, Belgium, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Iceland, Ireland, Netherlands, Netherlands Antilles, Norway, Portugal, Sweden, and the UK. Please refer to OECD´S website for more information on CRS reporting and TIEAS.

Individuals with accounts and other assets in Financial Institutions operating within St Lucia, may have their account and asset information reported to the United States Internal Revenue Service (IRS) where that individual meets the criteria of a U.S. Person, and where the account meets the criteria as a Reportable Account under FATCA.

Double Taxation Treaties

St Lucia has signed double taxation treaties with CARICOM member countries.

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