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Laws of Saint Christopherand NevisIncome Tax ActCap 20.221Revision Date: 31 Dec 2002ST CHRISTOPHER AND NEVISCHAPTER 20.22INCOME TAX ACTand Subsidiary LegislationRevised Editionshowing the law as at 31 December 2002This is a revised edition of the law, prepared by the Law Revision Commissioner under theauthority of the Law Revision Act, No. 9 of 1986This edition contains a consolidation of the following laws:Income Tax ActAct 17 of 1966 in force 1st January, 1967Amended by Act 20 of 1966Act 12 of 1970Act 5 of 1972Act 19 of 1972Act 13 of 1974Act 13 of 1976Act 13 of 1977Act 14 of 1980
2Cap 20.22Income Tax ActLaws of Saint Christopherand NevisRevision Date: 31 Dec 2002Act 3 of 1982Act 3 of 1988Act 7 of 1992Act 2 of 1994Act 9 of 1996Act 1 of 1998Act 1 of 2000Act 2 of 2001.Income Tax (Approved Mortgages) Regulations – Section 7 (4) – SRO 28 of 1972Income Tax (Evasion of Tax Payment) (Prevention) Rules – Section 39 – SRO 41of 1966Amended by SRO 63 of 1976Income Tax (Approved Institutions) Order – Section 29 (7) – SRO 17 of 1979
Laws of Saint Christopherand NevisIncome Tax ActCap 20.223Revision Date: 31 Dec 2002CHAPTER 20.22INCOME TAX ACTARRANGEMENT OF SECTIONSPART I – PRELIMINARY . 71.Short title . 72.Interpretation. 7PART II – IMPOSITION OF INCOME TAX . 93.Charge of income tax . 94.Basis of Assessment . 10PART III – EXEMPTIONS . 115.Exemptions . 116.Government loans . 137.Approved Mortgagees. 138.Relief to hotel proprietors and pioneer manufacturers from income tax . 14PART IV – COMPUTATION OF ASSESSABLE INCOME . 159.Deductions allowed . 1510. Special deductions for capital expenditure . 1611. Deductions not to be allowed. 1912. Right to carry forward losses . 2113. Insurance and Shipping Companies . 2114. Trading by non-residents . 2215. Approved pension funds and employees contribution . 2316. Constitution of Pensions Fund (Investments) Board . 2417. Books of account to be kept . 25PART V – PERSONS ASSESSABLE. 2518. Wife’s income . 2519. Deceased person . 2520. Partnerships . 2621. Chargeability of trustees, etc. . 2622. Chargeability of agent of person residing out of the State . 2623. Acts etc. to be done by trustees . 2724. Agents etc. of non-residents to be assessed . 2725. Indemnification of representative . 2726. Income derived from property transferred to minors . 2727. Income of property transferred in trust to be income of transferor in certaincases . 2728. Apportionment of profits of certain companies among members . 28
4Cap 20.22Income Tax ActLaws of Saint Christopherand NevisRevision Date: 31 Dec 2002PART VI – PERSONAL ALLOWANCES. 2929. Allowances for individuals . 2930. Special exemption . 33PART VII – RATES OF TAX ETC . 3331. Imposition of tax . 3332. Deduction of tax from dividends of companies . 3433. Setting off of tax deducted . 3434. Deduction of tax from Government stock . 3535. Imposition of with-holding tax . 3536. Deduction of tax from payments to residents . 35PART VIII – ADMINISTRATION . 3637. Appointment of Administrative Authority . 3638. Official secrecy . 3639. Making rules . 3640. Signature on notices . 3741. Service of notices . 3742. Refusal or neglect to accept letters . 3743. Assessments not void by reason of errors . 3844. Time limits. . 38PART IX – RETURNS AND ASSESSMENTS . 3845. Returns of personal incomes . 3846. Returns by employers. 3847. Official information and official secrecy . 3948. Power of Comptroller to require accounts and returns . 3949. Lists to be prepared by representative or agent . 3950. Returns of interest . 3951. Manager of corporate bodies of persons . 4052. Comptroller to make assessments . 4053. Penalty for late submission of returns . 4054. Transactions designed to avoid liability to tax . 4055. Appointment of agent in the United Kingdom . 4156. Omissions and undercharges to be rectified . 4157. Comptroller or Commissioners may require a person to attend . 4158. Lists of persons assessed . 4359. Notices to be served on persons assessed . 4360. Relief in respect of error or mistake . 43PART X – OBJECTIONS AND APPEALS . 4361. Objections and Appeals. 4362. Procedure at appeals. 4463. Appeal on point of law . 44
Laws of Saint Christopherand NevisIncome Tax ActCap 20.225Revision Date: 31 Dec 200264. Adjustment of assessment after determination . 44PART XI – COLLECTION AND RECOVERY OF TAX . 4465. Payment of tax . 4466. Payment of tax by instalments . 4567. Filing of Declarations . 4668. Deduction on payment of emoluments . 4669. Definition of emoluments for purposes of sections 39, 67 and 68 . 4870. Tax Tables . 4871. Tax in arrear. 4872. Penalty for non-payment of tax. 4873. Recovery by levy on goods . 4974. Priority of claim for tax . 4975. Sale to be by public auction . 4976. Commission to Provost Marshal . 4977. Committal to prison . 5078. Recovery of tax in certain cases. 5079. Repayment of tax . 5180. Power to remit tax . 51PART XII – PENALTIES. 5181. Penalty for offences . 5182. Penalty for incorrect returns . 5283. Penalty for false statements and returns. 5284. Time limit for proceedings . 5385. Savings for criminal proceedings. 53PART XIII – DOUBLE TAXATION RELIEF . 5386. Relief for tax paid in the Commonwealth . 5387. Double Taxation arrangements . 5488. Tax Credits . 5489. Time limit for claims . 5590. Adjustment of tax deducted from dividends and of set-off . 56FIRST SCHEDULE . 57SECOND SCHEDULE . 61THIRD SCHEDULE. 62
Laws of Saint Christopherand NevisIncome Tax ActCap 20.227Revision Date: 31 Dec 2002CHAPTER 20.22INCOME TAX ACTAN ACT to make provision for the imposition of a tax on incomes, and toprovide for the taxation of certain capital gains and to regulate the collection of thattax; and to provide for related or incidental matters.PART I – PRELIMINARY1.Short title.This Act may be cited as the Income Tax Act.2.Interpretation.(1)In this Act, unless the context otherwise requires,“approved pension fund” means a pension, provident or superannuation fundor scheme established by an employer for the benefit of his or heremployees or their dependants, subject to the following conditions:(a)contributions made by the employer and by the employee arealienated from the employer and placed under the control oftrustees who shall include representatives of both the employerand employees and at least one trustee who is neither theemployer nor an employee;(b)the manner of investing the accumulated contributions hasbeen approved by the Pension Fund (Investments) Board;(c)the trust under which the fund is created ensures(i) that the contributions accumulated in the fund shall in nocircumstances be returnable to the employer; and(ii) the benefit of the contributing employee shall normallytake the form of a pension or annuity upon retirement;and(d)the fund has been approved by the Minister of finance “as anapproved pension fund” for the purposes of this Act;[Inserted by Act 13/1974]“assessable income” means the income from the sources described in section3 computed in accordance with the provisions of Parts II, III, IV andV of this Act;“body of persons” means any body politic, corporate, or collegiate and anycompany, fraternity, fellowship, or society of persons whethercorporate or not corporate;“capital expenditure” means the net expenditure after deducting any grants,subsidies or other payments received from third parties on accountthereof;
8Cap 20.22Income Tax ActLaws of Saint Christopherand NevisRevision Date: 31 Dec 2002“chargeable income” means the aggregate of the assessable income less anyallowances due under section 29;“Collector” means the Comptroller or any officer acting for or deputed byhim or her;“Commissioners” means the Commissioners of Income Tax;“the Commonwealth” shall be deemed to include those territories and theirdependencies which are prescribed;“Commonwealth income tax” means any income tax charged under any lawin force in any part of the Commonwealth other than the UnitedKingdom;“company” means any company incorporated or registered under any law forthe time being in force in the State or any company incorporated orregistered outside the State;“Comptroller” means the Comptroller of Inland Revenue;“Double Taxation Relief” means any relief or credit given in respect ofIncome Tax in any other State;“Governor-General” means the Officer for the time being administering theGovernment of the State, and includes the Minister during such timeas that office exists;“land” includes all tenements and hereditaments and also all messuages,houses, buildings or other construction whether the property of anycompany or of any individual, and all trees growing or standingthereon;[Inserted by Act 5/1972]“Minister” means the Minister responsible for the subject of Finance;“Pension Fund (Investments) Board” means the Pension Fund (Investments)Board constituted under this Act;[Inserted by Act 13/1974]“person” includes a body of persons;[Inserted by Act 13/1976]“plant or machinery” excludes expenditure on loose plant, tools, containers,cases, china, glass, soft furnishings and similar objects of a short lifeor for which the cost of renewals is a deduction allowed in computingthe profits;“prescribed” means prescribed by rules or regulations under this Act;“State” means the State of Saint Christopher and Nevis;“tax” means the income tax imposed by this Act;“trade” means any trade, manufacture, business, and any adventure orconcern in the nature of trade, and shall include farming, marketgardening, husbandry and the occupation of land for any commercialpurpose;“year of assessment” means the period of twelve months commencing on thefirst day of January in each year.
Laws of Saint Christopherand NevisIncome Tax ActCap 20.229Revision Date: 31 Dec 2002(2)References in this Act to “the Corporation rate of tax” or to “the income taxrate of tax” shall be construed and read as references to “the corporation rate of tax” or to“the income tax rate of tax”, as the case may be, prescribed by section 31 of this Act or toany rate of tax substituted for one or the other of such rates of tax by any amendment orreplacement of the said section.[Inserted by Act 13/1976]PART II – IMPOSITION OF INCOME TAX3.Charge of income tax.(1)Income tax shall, subject to the provisions of this Act, be payable at the rateor rates specified hereafter for the year of assessment commencing on the 1st day ofJanuary, 1967, and for each subsequent year of assessment upon the income of any personaccruing in or derived from the State or elsewhere and whether received in the State or notin respect of(a)gains or profits from any trade, profession, or vocation, for whateverperiod of time such trade, profession or vocation may have beencarried on or exercised;(b)gains or profits from any employment, including the estimated annualvalue of any quarters or board or residence or of any other allowanceor benefit, but excluding passages to or from the State, granted inrespect of employment, whether in money or otherwise:Provided that in the case of passages granted for overseas leavethis exemption shall not apply more often than once in every twoyears;(c)the annual value of land and improvements thereon used by or onbehalf of the owner or used other than at full rental value by theoccupier, for the purpose of residence or enjoyment, and not for thepurpose of gain or profit, such annual value to be ascertained in themanner prescribed:Provided that there shall be exempted the annual value of anewly constructed house, during such time as the house is occupiedas a residence by the owner thereof(i) but this exemption shall not be granted to, and does not apply inrespect of, any one person for more than one house at the sametime, and moreover shall only apply in respect of a house thecost of construction of which, in the opinion of the Comptroller,having regard to normal building costs prevailing at the time ofits construction, would not exceed twenty-five thousand dollars,exclusive of the cost or value of the land;(ii) and this exemption, when applicable, shall be operative for aperiod of fifteen years beginning with the date of thecompletion of the newly constructed house:And further provided that the exemption granted under the firstproviso to this paragraph shall cease to apply in respect of a house
10Income Tax ActCap 20.22Laws of Saint Christopherand NevisRevision Date: 31 Dec 2002where, in the opinion of the Comptroller, the cost of repairs,alterations or improvements made to the house when added to thecost of construction as determined under the said proviso exceedstwenty-five thousand dollars exclusive of the cost or value of theland;(d)dividends, interest or discounts;(e)any pension, charge or annuity;(f)rents, royalties, premiums and any other profits arising from property;(g)any annual gains or profits not falling under any of the foregoingheads:Provided that in the case of income arising outside of the Statewhich is earned income and which arises to a person who is notordinarily resident in the State, or not domiciled in the State, the taxshall be payable on the amount received in the State:Provided also that tax shall not be payable in respect of anyincome arising outside of the State and accruing to any person who isin the State for some temporary purpose only and not with anyintention to establish his or her residence therein and who has notactually resided in the State at one or more times for a period equal inthe whole to six months in the basic year; but so however that whereany trade, profession or vocation is carried on or exercised partlywithin and partly outside the State by a resident individual whosehome is in the State, the whole of the gains or profits from such trade,profession or vocation shall be deemed to have accrued in or to havebeen derived from the State.[Substituted by Act 12/1970](2)Where the gain or profit is of a capital nature not being a gain or profitwhich falls within subsection (1) of this section or not being a gain or profit accruing froma trade, profession, vocation, office or employment and derives from a transaction relatingto assets which are disposed of within one year of the date of acquisition of such assetssuch gain or profit shall be declared at the same time that a return of income is made andshall be subject to one half the rate of tax at which it would have been charged if such gainor profit were aggregated with any income chargeable under subsection (1) of this section:Provided however that the maximum rate of tax on such gain or profit shall notexceed 20%.[Inserted by Act 5/1972](3)This section shall not apply to income which accrues on or after 1st May,1980 to any person (other than a company) liable under this section.[Inserted by Act 14/1980]4.Basis of Assessment.(1)Tax shall be assessed for each year of assessment upon the total assessableincome of any person for the basic year.
Laws of Saint Christopherand NevisIncome Tax ActCap 20.2211Revision Date: 31 Dec 2002(2)Subject to the provisions of sections 67 and 68 the basic year shall be theperiod of twelve months ending on the 31st December immediately preceding the year ofassessment:Provided that where the Commissioners are satisfied that any person usually makesup the accounts of his or her trade, to some date other than the 31st day of December, theymay permit the profits of that trade to be computed for the purposes of this Act upon theincome of the year terminating on such date and that year shall accordingly be deemed tobe the basic year:Provided also that where such permission has been given in respect of any year ofassessment the profits for each subsequent year of assessment shall be computed byreference to a basic year terminating on a like date:Provided also that where any change occurs in the date to which accounts are madeup the Commissioners may make such adjustment for any year as in their opinion is justand reasonable.[Amended by Act 20/1966](3)Subject to the provisions of this Act, tax shall be assessable and assessed forany year of assessment for which income arose in the basic year from the sourcesdescribed in section 3 notwithstanding that no such income arose in the year of assessment.PART III – EXEMPTIONS5.Exemptions.(1)There shall be exempt from the tax(a).[Omitted due to cut off date][Repealed by Act 6 of 2006](b)the income of any local authority, trade union, or friendly society inso far as such income is not derived from a trade carried on by suchlocal authority, trade union or friendly society;(c)the income of any statutory or registered building society;(d)the income of any ecclesiastical, charitable or educational institutionof a public character in so far as such income is not derived from atrade carried on by such institution:Provided that where a trade is carried on by a charity the profitsof such trade shall be exempt if the profits are applied solely to thepurposes of the charity and either(i) the trade is exercised in the course of the actual carrying out ofa primary purpose of the charity, or(ii) the work in connection with the trade is mainly carried on bybeneficiaries of the charity;(e)the emoluments payable to members of the permanent consularservices of foreign countries in respect of their offices or in respect ofservices rendered by them in their official capacity;
12Cap 20.22Income Tax ActLaws of Saint Christopherand NevisRevision Date: 31 Dec 2002(f)(g)(h)(i)(j)the emoluments payable from United Kingdom Government funds tomembers of Her Majesty’s Forces and to persons in the permanentservice of the United Kingdom Government in the State in respect oftheir offices under the United Kingdom Government;wound and disability pensions granted to members of Her Majesty’sForces;gratuities granted to members of Her Majesty’s Forces in respect ofservices rendered during war;the income of the Government Savings Bank;Interest received by an individual resident in the State from the SaintChristopher Nevis and Anguilla National Bank Limited or from theNevis Co-operative Banking Company Limited in respect of depositsof money received by any of the aforesaid banks for the benefit ofsuch individual;[Inserted as paragraph (ii) by Act 13/1974](k)(l)(m)the income of any Electricity Authority;the incomes of Ministers of Religion derived from their occupation assuch;the sum of one thousand five hundred dollars from the allowance paidto members of the National Assembly and pensions paid to formermembers and officers of the National Assembly;[Inserted by Act 5/1972](n)the income of any approved Pension Fund;[Substituted by Act 13/1974. Originally paragraph (m)](o)(p)the income of the following funds established under section 5 of theSugar Export Cess Act:(i) the Sugar Industry Price Stabilization Fund;(ii) the Sugar Industry Rehabilitation Fund; and(iii) the Sugar Industry Labour Welfare Fund;benefits (including assistance or lump sum payments) paid out of anyaccount of the Social Security Fund established under section 40 ofthe Social Security Act;[Inserted by Act 13/1977](q)profits arising from the investment of the Social Security Fund;[Inserted by Act 13/1977](r)the income of any other fund or body approved by the Minister;(s)any sum received by way of gratuity on termination of a contract ofemployment;income arising from the business of shipping carried on by a personnot resident in the State provided that the Comptroller is satisfied thatan equivalent exemption from income tax is granted by the country inwhich such person is resident to persons resident in the State and, ifthat country is a country other than the United Kingdom, to personsresident in the United Kingdom.[Inserted by Act 5/1972](t)
Laws of Saint Christopherand NevisIncome Tax ActCap 20.2213Revision Date: 31 Dec 2002(2)The expression “business of shipping” in subsection (1) (t) means thebusiness carried on by an owner of ships, and for the purposes of this definition theexpression “owner” includes charterer.(3)For the purposes of subsection (1) (t), a company shall be deemed to beresident in the country in which the central management and control of its business issituate:Provided that nothing in this section shall be construed to exempt in the hands ofthe recipients any dividends, interests, bonuses, salaries or wages paid wholly or in part outof the income so exempted.6.Government loans.The Governor-General may, by Order published in the Gazette, provide that theinterest payable on any loan charged on the public revenue of the State shall be exemptedfrom the tax, either generally or only in respect of interest payable to persons not residentin the State and such interest shall as from the date and to the extent specified in the orderbe exempt accordingly.7.Approved Mortgagees.(1)Notwithstanding any provisions to the contrary in this Act, there shall beexempted from income tax during the prescribed period any interest paid to an approvedmortgagee on loans provided for the erection of hotels or dwelling houses in the State.(2)In this section,(a)“prescribed” means prescribed by regulations made under theprovisions of this section;(b)“approved mortgagee” means a mortgagee or mortgagees approvedfor the purpose by the Minister and under the terms and conditionsprescribed by regulations made under this section.(3)The Governor-General may, by Order published in the Gazette, exempt fromincome tax the interest on any loan made to the Government of the State by any Bank orother Financial Institution for the purpose of providing mortgage finance for the buildingof hotels or dwelling houses.(4)The Governor-General may make regulations prescribing(a)the terms and conditions under which a mortgagee may become anapproved mortgagee;(b)the period during which interest on loans provided for the erection ofhotels or dwelling houses may in any case be exempted from incometax;(c)the returns to be made and the information to be given by approvedmortgagees;(d)the m
8 Cap 20.22 Income Tax Act Laws of Saint Christopher and Nevis Revision Date: 31 Dec 2002 "chargeable income" means the aggregate of the assessable income less any allowances due under section 29; "Collector" means the Comptroller or any officer acting for or deputed by him or her; "Commissioners" means the Commissioners of Income Tax;
