Trinidad and Tobago
Foreign tax credit
Double taxation is avoided or mitigated by means of foreign tax credits.
Fiscal Incentives Act, 1979
An approved enterprise, which must be a locally incorporated resident corporation, may be granted an exemption from corporation tax for a period of up to ten years, depending on the category under which it is approved. Exemption may be total or partial. Subject to approval, profits may be distributed tax free to shareholders, except in the case of certain non-resident shareholders, where the relief is restricted to the amount of tax that exceeds their liability in their country of residence. Net losses during the tax holiday period (i.e. the excess of total losses over total profits) may be carried forward for set-off without limitation for five years from the end of the tax holiday period, after which the normal set-off provisions for losses apply. As of 1 January 2007, the tax holiday in respect of corporation tax is no longer granted.
Approved tourism projects
Under the Tourism Development Act 2000, approved tourism development projects, including hotels, are granted a tax holiday for periods of up to seven years. In addition, a carryover from a tax exemption period is permitted of any loss arising out of the operation or renting of an approved tourism project to be written off against profits in accordance with normal income tax loss provisions, subsequent to the tax holiday period. An approved tourism project means a project declared to be so by the government.
Approved mortgage and other companies
The profits of an approved company are exempt from corporation tax. The exempt profits, when distributed to shareholders, are exempt from corporation tax and income tax. Expenses incurred in the course of the approved mortgage business remain fully deductible.
Special Economic Zones
The former Free Zone regime has been replaced by a Special Economic Zone regime. Benefits under designated Special Economic Zones include zero rating for VAT purposes of goods supplied to the Zone and custom duties exemption on importation of all approved capital goods, spare parts, raw materials, stock in trade, and other articles used in the Zone. For particular types of Zones, a reduction in the corporation tax rate and an exemption from property tax is also available.
Investment in tech start-up and new-tech business allowance
Expenditure incurred investing in a tech start-up or a new-tech business is tax deductible, and an allowance equal to 150% of the actual expenditure incurred in relation to such investment is also available, up to a maximum of TTD 3 million. For the purposes of this allowance, 'tech start-up' or 'new-tech business' is defined as a company incorporated within three years from 1 January 2020 whose purpose is to provide digital technology products or services.
Engaging in technology solution and digitisation allowance
Expenditure incurred engaging in technology solution and digitisation is tax deductible, and an allowance equal to 150% of the actual expenditure incurred is also available, up to a maximum of TTD 3 million. For the purposes of this allowance, 'technology solution' is defined as a set of related software programmes or services that are sold as a package.
Creating youth employment in the technology industry allowance
Expenditure incurred in creating employment in a technology industry where the employees comprise a majority of young people is tax deductible, and an allowance equal to 150% of the actual expenditure incurred in relation to creation of such employment is also available, up to a maximum of TTD 3 million.
Capital expenditure by approved property development company allowance
In ascertaining the chargeable profits of an approved property development company, there shall be deducted from any capital expenditure incurred by that company in the construction of a building that is to be used for commercial or industrial purposes by the company or a purchaser or lessee thereof:
- an amount equal to 15% in the case where construction of the building is proved to the satisfaction of the BIR to have commenced before 31 December 2005 and is completed on or before 31 December 2007 or to have commenced on or after 1 January 2008 and is completed on or before 31 December 2014, or
- an amount equal to 20% in the case where construction of the building is proved to the satisfaction of the BIR to have commenced on or after 1 January 2015 and is completed on or before 31 December 2024.
Research and development (R&D) allowance
Expenditure incurred from engagement in R&D is tax deductible, and an allowance equal to f40% of the actual expenditure incurred is also available, up to a maximum of TTD 3 million.
Conservation or preservation of property of interest allowance
Expenditure incurred in the conservation or preservation of a property of interest, as certified by the Minister, is tax deductible, and an allowance equal to 150% of the actual expenditure incurred is also available, up to a maximum of TTD 1 million.
Manufacturing companies’ incentive
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 25% per annum on the first TTD 100,000 expended on investments in projects related to information technology, digitisation, or technology development to advance growth in the manufacturing industry.
This does not apply to petrochemical companies (i.e. companies that produce chemicals from the cracking or processing of petroleum oil, natural gas, or methane).
Technology solution and digitisation incentive
Companies whose core business activity is technology solution and digitisation are subject to corporation tax at a rate of 50% of the standard rate:
- on the first TTD 100,000 of chargeable income for income year 2022 and
- on the first TTD 200,000 of chargeable income for income year 2023.
Carbon capture and storage and enhanced oil recovery allowance
An allowance equal to 30% of the actual expenditure incurred investing in carbon capture and storage and enhanced oil recovery is available, up to a maximum of TTD 500,000.
Promotional expenses incurred by local firms to promote the expansion of existing markets and/or the creation of new ones for the export of specified services or locally produced goods are tax deductible as an expense at 150% of the actual outlay. Tax-deductible promotional expenses are defined as those expenses incurred in respect of specified services or goods produced in Trinidad and Tobago. This includes such items as advertising in foreign markets and participation in trade fairs and missions.
Companies can deduct the actual expenses incurred in granting scholarships to nationals who are not employees, directors, or associates of directors of the company for tertiary education.
Production company allowance
An allowance equal to 150% of actual expenses incurred in respect of the company's own audio, visual, or video productions for educational or local entertainment, or local culture, is available.
Allowances are granted in respect of each of the following activities, based on the actual expenditure incurred but not exceeding TTD 12 million in aggregate:
- Art and culture allowance.
- Sportsman/sporting activity allowance.
- Audio, visual, or video production allowance.
- Promoting the fashion industry.
Child care/Home work facility
A deduction is allowed for the actual cost incurred in setting up a facility for dependents of employees who are minors, up to a maximum of TTD 500,000 for each facility, subject to an aggregate sum of TTD 3 million in any year.
Wear and tear allowances
A 130% wear and tear allowance is available for expenditure incurred in acquiring plant, machinery, and equipment (excluding installation) for providing compressed natural gas (CNG) kit and cylinder installation service.
A 150% wear and tear allowance is available on the expense incurred in the acquisition of solar heaters, wind turbines, and photovoltaic systems.
A company is allowed to claim as a deduction 150% of expenses incurred in the training and retraining of the employees of the company.
Allowance for engagement of energy service companies
Where a company incurs expenditure in engaging another company certified as an energy service company for the purpose of carrying out an energy audit for the design of energy saving systems and the installation of the energy saving systems, the company shall be entitled to an allowance equal to 150% of the expenditure actually incurred.
Where the certified energy service company has acquired plant and machinery for the purpose of conducting energy audits, they shall be allowed an allowance of 75% of the cost incurred in the year of acquisition.