Legislative Update: July 2019 : IBC Act amendment: Tax Election for pre-2019 IBCs
- As a result of the enactment of the IBC Amendment Act No 13 of 2018, readers were advised of some of the key effects as follows:
- IBCs incorporated pre-1 December 2018 continue to be subject to the 'old' law until 30 June 2021.
- IBCs incorporated post 2018:
- Registered Agents to file a statutory declaration with incorporation documents. Template for Memorandum of Association revised.
- Post 2018 IBCs are deemed as resident under the Income Tax Act and will be required to file annual tax returns based on unaudited financial statements.
- Post 2018 IBCs can no longer elect to be exempt from tax or to pay tax at 1%.
- Post 2018 IBCs will not be restricted from doing business with residents and may own immovable property.
- IBCs will be subject to Aliens (Licensing) Act. After June 30, 2021 all IBCs incorporated prior to December 1, 2018 with majority alien shareholders or directors and which hold majority shares in companies owning immovable property in Saint Lucia will need to be aware of the likelihood of forfeiture for breach under the Aliens Act. Licences or exemptions under the Aliens Act may need to be applied for.
- IBCs may be subject to the Trade Licences Act, Cap 13.04 if deemed to be an alien company; provided the IBC wishes to trade with residents.
- Exemptions from withholding taxes have been modified.
- Stamp duty on transfer of shares and other property may apply but exemption available provided some conditions are met. Stamp duty exemption allowed only if -the transfers of shares and other property - does not have the legal effect of changing the beneficial ownership of property in Saint Lucia. This means that all IBC charges, mortgages, transfers etc which are to be filed will need to be assessed by the IRD and stamped as appropriate whether or not the IBC chooses to file the charges etc., in the IBC Registry.
- Liability to tax - Pre-2019 IBCs
- Parliament has enacted changes to the IBC Act in order to allow pre-2019 IBCs to elect to be eligible for the same tax treatment as IBCs incorporated from January 1, 2019. The International Business Companies (Amendment) No. 2) Act, No. 17 of 2019 and the Income Tax (Amendment) (No. 2) Act, No. 16 of 2019 are currently in force.
Note: The IBC amendment acts can be found at www.saintluciaifc.com/legislation/legislation.htm.