Trinidad and Tobago
The Finance (No. 2) Act, 2021 (“Act”) was assented on 17 December, 2021 in Parliament. The Act implements several measures announced by the Government of Trinidad and Tobago during the 2022 financial year’s budget presentation. The following amendments are effective 1 January 2022:
Withholding tax rates on distributions - Part II of Schedule 3 of the Income Tax Act is amended to reduce the withholding tax rates on distributions from 10% to 8% when paid to individuals and other companies and from 5% to 3% when paid to a parent company.
Small and Medium Enterprise (“SME”) listed companies- rate of business levy. The business levy rates for Small and Medium Enterprise (SME) companies listed on the Trinidad and Tobago Stock Exchange, within the first ten (10) years from its listing on such stock exchange is broken down and calculated into five (5) year periods as follows:-
- Zero percent (0%) for the first five (5) years from listing;
- Fifty percent (50%) of the rate of the business levy for the next five (5) years immediately following the previous period and thereafter at the standard rate.
The Corporation Tax Act has been amended with regard to the tax exemption period on interest income generated on loans granted under the SME Loan Guarantee programme for relief from Covid-19 restrictions by First Citizens Bank Ltd, RBC Royal Bank (Trinidad and Tobago) Ltd, Scotiabank Trinidad and Tobago Ltd and Republic Bank Ltd, has been extended by two years from 2026 to 31 December 2028.
Research and development allowance - where a company incurs expenditure from engagement in research and development, in ascertaining the chargeable profits of the company for a year of income, the company shall be allowed as a deduction, an allowance equal to forty percent (40%) of the actual expenditure incurred, up to a maximum of three million dollars (TT$3,000,000).
Conservation or preservation of property of interest allowance - where a company incurs expenditure in the conservation or preservation of a property of interest, as certified by the Minister, in ascertaining the chargeable profits for that year of income, the company shall be allowed as a deduction, an allowance equal to one hundred and fifty percent (150%) of the actual expenditure incurred, up to a maximum of one million dollars (TT$1,000,000).
Manufacturing companies - rate of corporation tax - the First Schedule of the Corporation Tax Act was amended to provide that for the income years 2022 and 2023, a company engaged in the business of manufacturing shall be subject to corporation tax at the rate of twenty-five percent (25%) per annum on the first one hundred thousand dollars (TT$ $100,000.00) expended on investments in projects related to:
- information technology;
- digitisation; or
- technology development,
to advance growth in the manufacturing industry.
Core business activity: technology solution and digitisation - rate of corporation tax - the First Schedule of the Corporation Tax Act was amended with regard to companies whose core business activity is technology solution and digitisation. Such companies shall be subject to corporation tax at a rate of fifty per cent (50%) of the rate specified in paragraph 1 of the First Schedule:
- On the first one hundred thousand dollars (TT$100,000.00) of chargeable income for income year 2022; and
- On the first two hundred thousand dollars (TT $200,000.00) of chargeable income for income year 2023.
Value Added Taxes Act – Schedule 2 – zero rated items -Schedule 2 of the Value Added Tax Act is amended to add:
New electric motor vehicle, imported for private use; and
- Used electric motor vehicle, imported for private use, which is not older than two years from the year of manufacture.
The rate of the Green Fund Levy for Small and Medium Enterprise (SME) companies listed on the Trinidad and Tobago Stock Exchange shall be calculated as follows:
- Zero percent, for the first five years from listing;
- Fifty percent of the rate of the Green Fund Levy, for the next five years immediately following the period referred to in paragraph (a); and
- At the rate of the Green Fund Levy set out in section 62, for the years immediately following the period referred to in paragraph (b).