Returns must cover a 12-month period, which may be changed only with the Comptroller’s permission.
Tax returns must be filed within three months of the company’s fiscal year-end. An extension of the filing date may be obtained.
Financial statements must be submitted with the returns, together with a schedule reconciling taxable income with book income and various other schedules of additional information.
The system is one of self-assessment. Upon receipt of the returns, the IRD examines the information provided and issues a notice of assessment at any time, subject to the statute of limitations. The Revenue Department may also issue assessments in the absence of returns.
Payment of tax
Tax is payable in instalments on 25 March, 25 June, and 25 September in each year of income, based on the preceding year’s income. Any remainder is payable within three months of the end of the fiscal year.
Penalties and interest
The following civil penalties and interest, which are non-deductible, are imposed:
- For late filing or for failure to file: 5% of the tax charge at filing date.
- For late payment: 10% of the unpaid tax at the due date.
- On tax and penalties unpaid: Monthly interest at a rate of 1.04%.
- Tax knowingly evaded or sought to be evaded: 100% of the tax.
Within 30 days after the date of service of a notice of assessment or reassessment, the taxpayer may submit a written objection to the Revenue Department on any matters in such assessment or reassessment. If the Revenue Department confirms its assessment, the taxpayer may file an appeal with the Appeal Commission, which comprises seven persons appointed by the Minister of Finance. A decision by that body may be further appealed to the Saint Lucia High Court within 30 days. An appeal against an order from this Court may be made to the Court of Appeal.
Tax audit process
The IRD carries out audits of a selection of tax returns, usually at the taxpayer’s place of business. Audits may be carried out at any time prior to the expiration of the statute of limitations, whether or not notices of assessment have been issued. The Revenue Department has wide powers in determining the information it requires for these audits.
Statute of limitations
Assessments are not final until six years after the end of the income year, within which period assessments may be made at any time. In cases of misrepresentation or failure to disclose any material fact, a reassessment can be made at any time.
Topics of focus for tax authorities
The tax authorities in Saint Lucia often focus on the deductibility of related-party expenses during the completion of tax audits and WHTs on head office or management charges.