Income Tax Act, 1989 (Chapter 15.02), Saint Lucia, WIPO Lex

Main text(s)

English Income Tax Act, 1989 (Chapter 15.02)

Income Tax Act, 2008 (Chapter 15.02)

SAINT LUCIA

CHAPTER 15.02

INCOME TAX ACT

Revised Edition

Showing the law as at 31 December 2008

This is a revised edition of the law, prepared by the Law Revision Commissioner under the authority

of the Revised Edition of the Laws Act.

This edition contains a consolidation of the following laws—

INCOME TAX ACT

Act 1 of 1989 in force: section 25(1)(j)(i): 1 June 1987

remainder: 1 January 1988

Amended by Act 18 of 1990 in force 26 January 1991

Amended by Act 7 of 1994 in force 25 September 1994

Amended by Act 8 of 1996 in force 25 September 1994

Amended by Act 24 of 1996 in force 9 May 1990

Amended by Act 11 of 1998 in force 2 May 1998

Amended by Act 12 of 1999 in force 27 March 1999

Amended by Act 9 of 2001 in force 23 June 2001

Amended by Act 14 of 2003 in force 22 April 20031

1 Act 14 of 2003 applies in respect of income year 2002. See section 2 and 3 of Act 14 of

2003.

Amended by Act 15 of 2003 in force 22 April 20032

Amended by Act 7 of 2006 in force 6 February 2006

Amended by Act 11 of 2007 in force 17 September 2007

Amended by S.I. 86/1995 in force 29 December 1995

Amended by S.I. 78/1990 in force 1 January 1988

Amended by S.I. 56/1996 in force 26 October 1996

Amended by S.I. 26/1997 in force 26 April 1997

Amended by S.I. 38/1997 in force 17 May 1997

Amended by S.I. 102/1997 in force 27 December 1997

Amended by S.I. 34/1999 in force 22 May 1999

Amended by S.I. 69/2000 in force 25 March 2000

Amended by S.I. 141/2000 in force 1 January 2000

Amended by S.I. 232/2000 in force 25 November 2000

Amended by S.I. 84/2001 in force 8 September 2001

Amended by S.I. 98/2001 in force 13 October 2001

Amended by S.I. 136/2001 in force 1 December 2001

Amended by S.I. 12/2003 in force 10 February 2003

Amended by S.I. 19/2003 in force 3 March 2003

Amended by S.I. 59/2003 in force 21 July 2003

Amended by S.I. 64/2003 in force 25 August 2003

Amended by S.I. 4/2004 in force 9 February 2004

Amended by S.I. 60/2004 in force 9 August 2004

Amended by S.I. 75/2004 in force 1 November 2004

Amended by S.I. 82/2004 in force 29 November 2004

Amended by S.I. 4/2007 in force 12 February 2007

Amended by S.I. 40/2007 in force 8 June 2007

Amended by S.I. 172/2007 in force 29 October 2007

Amended by S.I. 100/2008 in force 3 November 2008

INCOME TAX (EVASION OF TAX PAYMENT) (PREVENTION) RULES – Section 151

Statutory Instrument 18/1971 in force 26 June 1971

Amended by S.I. 19/1977 in force 9 April 1977

Amended by S.I. 38/1993 in force 3 July 1993

Amended by S.I. 32/1998 in force 1 May 1998

INCOME TAX (EXEMPTIONS) PROCLAMATIONS – Section 25

Statutory Instrument 5/1924 and 93/1941

2 Amendments to Schedule 2 by Act 15 of 2003 takes effect in respect of income year

2002. See section 5(2) of Act 15 of 2003.

INCOME TAX (DOUBLE TAXATION RELIEF) (UNITED KINGDOM) ORDER – Section

Statutory Instrument 33/1949 in force:

Paragraph 6(3) of Schedule: 7 September 1968

Paragraphs 13(1) and 13(2) of Schedule: 1 January 1968

Remainder: 28 May 1949

Amended by S.I. 33/1951

Amended by S.I. 25/1968 in force 7 September 1968

INCOME TAX (DOUBLE TAXATION RELIEF) (CANADA) ORDER – Section 60

Statutory Instrument 19/1953 in force 4 April 1953

INCOME TAX (DOUBLE TAXATION RELIEF) (SWEDEN) ORDER – Section 60

Statutory Instrument 50/1954 in force 31 December 1954

INCOME TAX (DOUBLE TAXATION RELIEF) (DENMARK) ORDER – Section 60

Statutory Instrument appearing in volume 7, page 1106 of the 1957 Revision of the Laws of

Saint Lucia

INCOME TAX (DOUBLE TAXATION RELIEF) (NORWAY) ORDER – Section 60

Statutory Instrument appearing in volume 7, page 1119 of the 1957 Revision of the Laws of

Saint Lucia

INCOME TAX (DOUBLE TAXATION RELIEF) (U.S.A.) ORDER – Section 60

Statutory Instrument 42/1958 in force 27 December 1958

INCOME TAX (DOUBLE TAXATION RELIEF) (SWITZERLAND) ORDER – Section 60

Statutory Instrument 16/1965 in force 28 August 1965

INCOME TAX FORMS RULES – Section 151

Statutory Instrument 42/1949 in force 30 July 1949

INCOME TAX APPEALS AGAINST ASSESSMENTS RULES– Section 151

Statutory Instrument 14/1924

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Revision Date: 31 Dec 2008

CHAPTER 15.02

INCOME TAX ACT

ARRANGEMENT OF SECTIONS

Section

PART 1 11

PRELIMINARY 11

1. Short title and application................................................................................... 11 2. Interpretation...................................................................................................... 11

PART 2 18

ADMINISTRATION 18

3. Comptroller of Inland Revenue .......................................................................... 18 4. Delegation by Comptroller.................................................................................. 18 5. Indemnity against liability for acts done ............................................................. 18 6. Secrecy .............................................................................................................. 18

PART 3 20

IMPOSITION OF INCOME TAX 20

Division 1 — Charge to Tax ................................................................................... 20

7. Charge to tax: general........................................................................................ 20 8. Scope of charge to tax ....................................................................................... 21 9. Income accrued: meaning of.............................................................................. 21 10. Income deemed to have accrued from sources in Saint Lucia........................... 22 11. Basis of assessment .......................................................................................... 23

Division 2 — Persons Chargeable to Tax .............................................................. 24

12. Persons chargeable: general ............................................................................. 25 13. Married women .................................................................................................. 25 14. Minor children: dispositions to............................................................................ 25 15. Settlements and wills ......................................................................................... 25 16. Revocable dispositions ...................................................................................... 26 17. Deceased persons ............................................................................................. 27 18. Estates of deceased persons............................................................................. 27 19. Incapacitated persons........................................................................................ 28 20. Insolvent persons............................................................................................... 28 21. Partnerships....................................................................................................... 29 22. Non-resident persons......................................................................................... 29 23. Transactions involving liability to tax .................................................................. 30

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24. Responsibility of representative taxpayers..........................................................31

PART 4 31

EXEMPT INCOME 31

25. Exemptions .........................................................................................................31 26. Exemption: hotels ...............................................................................................38 27. Exemption: income from residential accommodation....................................... 38A 28. Exemption: interest from housing mortgages....................................................38b 29. Exemption: interest paid on approved borrowings by mortgage companies .......39 30. Comptroller may require Company to keep special account...............................39 31. Exemption: approved enterprises for fiscal incentive relief .................................40

PART 5 40

ASCERTAINMENT OF ASSESSABLE INCOME 40

Division 1 — Gains or Profits forming Assessable Income ....................................40

32. Assessable income: general ...............................................................................40 33. Business income.................................................................................................41 34. Employment income ...........................................................................................42 35. Loans or advances by a controlled company to a shareholder, director or

higher paid employee..........................................................................................43 36. Rental income.....................................................................................................44

Division 2—Deductions allowable in ascertaining assessable income ..................45

37. Deductions allowable : general ...........................................................................45 38. Deductions allowable : specific ...........................................................................45 39. Restrictions on deductions: management charges and certain payments

by controlled companies to shareholder .............................................................50 40. Capital allowance............................................................................................. 40B 41. Deduction for losses ...........................................................................................51 41A. Interpretation in respect of sections 41B to 41J ..................................................52 41B. Determination of subsidiary company .................................................................53 41C. Claim for group relief...........................................................................................54 41D. Companies joining group ................................................................................. 54A 41E. Relief obtainable once for the same amount.................................................... 54A 41F. Aggregate of claim........................................................................................... 54B 41G. Capital Allowances........................................................................................... 54B 41H. Tax recovery .................................................................................................... 54B 41I. Exempt companies .......................................................................................... 54B 41J. Profits and losses and distribution or charge on income vis-a-vis group

relief ................................................................................................................. 54C 41K. Exemption from stamp duty ............................................................................. 54C 42. Deductions not allowable under more than one provision................................54C 43. Expenditure for which no deduction allowable .................................................54D

PART 6 54E

ASCERTAINMENT OF CHARGEABLE INCOME : DEDUCTIONS AND ALLOWANCES 54E

44. Concessional deductions: general ................................................................... 54E 45. Personal allowance to individuals .................................................................... 54E 46. Allowance for spouse....................................................................................... 54E 47. Deduction for maintenance or alimony................................................................55

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48. Deduction for maintenance of children............................................................... 55 49. Deduction for education of certain children........................................................ 56 50. Deduction for higher education .......................................................................... 56 51. Allowance for housekeeper................................................................................ 57 52. Allowance for dependent relative ....................................................................... 58 53. Deduction for contributions to life assurance, or other retirement benefits......... 58 54. Deduction for mortgage interest, rates and insurance on owner occupied

property.............................................................................................................. 60 55. Deduction for gifts for certain approved purposes.............................................. 61 56. Deduction for medical expenses ........................................................................ 61 57. Deductions for payments to co-operative or building society ............................. 63 58. Deduction for interest on student loan ............................................................... 63 59. Deductions for purchase of new shares in a Resident Public Company ............ 64

PART 7 64

SPECIAL PROVISIONS RELATING TO CERTAIN TAXPAYERS 64

Division 1 – Variation of Normal Bases of Taxation............................................... 64

60. International agreement for the avoidance of double taxation............................ 64 61. General insurance companies and associations of underwriters ....................... 65 62. Life assurance companies ................................................................................. 66 63. Approved pension funds .................................................................................... 67 64. Deductions dependent on place where fund established ................................... 71 65. Interpretation of this Part.................................................................................... 72 66. Applications for registration................................................................................ 72 67. Conditions subject to which registration may be granted ................................... 72 68. Permitted provisions in annuity contracts........................................................... 73 69. Registration........................................................................................................ 74 70. Change in annuity contracts............................................................................... 74 71. Withdrawal of registration................................................................................... 75 72. Comptroller to be notified of payments under annuity contract and to be

provided with returns.......................................................................................... 75 73. Allowable deductions ......................................................................................... 75 74. Deductions for payments to a RHOS plan ......................................................... 75 75. Tax Credit in respect of Foreign Currency from Income Year 2001

onwards ............................................................................................................. 76

Division 2 — Withholding Tax on Payments to Non-Residents and Deduction of Tax by Employers, by Companies and from Payments to Contractors .............................................................................................. 77

76. Deduction of tax from payments made to non-resident...................................... 77 77. Deduction of tax by employers........................................................................... 78 78. Deduction of tax from payments to contractors.................................................. 78 79. Indemnification for tax paid to Comptroller......................................................... 79

PART 8 79

ASCERTAINMENT OF TAX PAYABLE 79

80. Rates of tax........................................................................................................ 79 81. Credit for tax deducted or paid........................................................................... 80 82. Credit for tax paid outside Saint Lucia ............................................................... 80 83. Calculation of tax credit for foreign tax ............................................................... 81

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PART 9 81

RETURNS AND NOTICES 81

84. Returns of income: general.................................................................................81 85. Returns of income: cessation of income during any year of income ...................83 86. Returns of income: where no return furnished ....................................................83 87. Further return or information, production of books and giving of evidence

to Comptroller .....................................................................................................83 88. Examination of business records ........................................................................85 89. Powers of entry...................................................................................................86 90. Maintenance of proper records of transactions, methods of accounting

and preservation of books of account and records .............................................87 91. Submission of accounts with return of income and certificate relating to

preparation of accounts ......................................................................................88 92. Principal officer of company................................................................................89 93. Precedent partner of partnership ........................................................................90 94. Returns deemed to be furnished by due authority and in full knowledge of

contents ..............................................................................................................91 95. Returns: method of furnishing.............................................................................91 96. Returns: extensions of time for furnishing...........................................................91

PART 10 92

ASSESSMENT OF TAX 92

97. Assessments ......................................................................................................92 98. Additional assessment ........................................................................................92 99. Transactions designed to avoid liability to tax.....................................................93 100. Reduced assessments........................................................................................93 101. Determination of assessed loss ..........................................................................94 102. Time limits for assessments................................................................................95 103. Notice of assessment..........................................................................................95 104. Record of assessment ........................................................................................96 105. Finality of assessment ........................................................................................96

PART 11 97

OBJECTIONS AND APPEALS 97

106. Objection to assessment.....................................................................................97 107. Decision by Comptroller on objection..................................................................98 108. Appeal Commissioners .......................................................................................98 109. Appeal from decision by Comptroller ..................................................................99 110. Hearing by Appeal Commissioner.....................................................................100 111. Right of further appeal ......................................................................................101 112. Payment of tax suspended by objection or appeal ...........................................101

PART 12 102

PAYMENT, RECOVERY AND REFUND OF TAX 102

113. Advance payment of tax ...................................................................................102 114. When tax is due and payable............................................................................103 115. Interest on unpaid tax .......................................................................................104 116. When tax deducted from remuneration, payments to contractors or

payments to non-residents is due and payable.................................................104 117. Interest on unpaid tax deductions .....................................................................105 118. Recovery of tax by court action.........................................................................105

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119. Recovery of tax by distraint.............................................................................. 105 120. Obstruction of officers ...................................................................................... 106 121. Recovery of tax as privileged debt by registration as judgement debt ............. 107 122. Recovery of moneys from persons leaving Saint Lucia.................................... 107 123. Recovery of tax from assets of certain dispositions ......................................... 108 124. Recovery of tax from representative taxpayer.................................................. 108 125. Right of representative tax payer to indemnity ................................................. 109 126. Personal liability of representative taxpayers ................................................... 109 127. Recovery of tax from persons holding money for another person.................... 110 128. Priority of tax debt upon bankruptcy or liquidation ........................................... 111 129. Refund of tax overpaid ..................................................................................... 111 130. Remission of tax .............................................................................................. 112

PART 13 112

OFFENCES 112

Division 1 – Civil Penalties ................................................................................... 112

131. Penalties: general ............................................................................................ 112 132. Penalties: failure to furnish return of income .................................................... 113 133. Penalties: failure to furnish correct return of income ........................................ 113 134. Penalties: failure to pay tax by due date .......................................................... 114 135. Penalties: failure to deduct tax or account for tax deducted............................. 114 136. Penalties: failure to comply with notice to give information, produce

documents or give evidence to Comptroller ..................................................... 114 137. Notice of intention to impose penalty to be given............................................. 115

Division 2 – Criminal Proceedings ....................................................................... 115

138. Sanction for prosecution .................................................................................. 115 139. Offences: breach of secrecy ............................................................................ 115 140. Offences: failure to comply with requirements of the Act ................................. 116 141. Offences: intent to evade liability to tax............................................................ 117 142. Offences: deduction of withholding tax and tax from payments to

contractors ....................................................................................................... 117 143. Offences: by employers or employees ............................................................. 118 144. Offences: evasion of tax in relation to deduction of tax by employer ............... 119 145. Aiding or abetting an offence ........................................................................... 119 146. Mitigation of penalties and compounding of offences ...................................... 120 147. Time limits for proceedings to be taken............................................................ 121

PART 14 121

MISCELLANEOUS 121

148. Forms of notices and returns ........................................................................... 121 149. Service of notices or documents ...................................................................... 122 150. Change of address for service of notice........................................................... 123 151. Regulations ...................................................................................................... 124 152. Amendment of Schedules and rates specified in the Act ................................. 125 153. Saving.............................................................................................................. 125

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SCHEDULE 1 126

SCHEDULE 2 128

SCHEDULE 3 143

SCHEDULE 4 147

SCHEDULE 5 157

SCHEDULE 6 158

SCHEDULE 7 159

SCHEDULE 8 161

11Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

CHAPTER 15.02

INCOME TAX ACT

(Acts 1 of 1989, 18 of 1990, 7 of 1994, 8 of 1996, 24 of 1996, 11 of 1998, 12 of 1999, 9 of

2001, 14 of 2003, 15 of 2003, 7 of 2006, 11 of 2007 and S.I. 86/1985, 78/1990, 56/1996,

26/1997, 38/1997, 102/1997, 34/1999, 69/2000, 141/2000, 232/2000, 84/2001, 98/2001,

136/2001, 12/2003, 19/2003, 59/2003, 64/2003, 4/2004, 4/2007, 40 of 2007, 172/ 2007

and 100/2008)

AN ACT to revise and consolidate the law relating to income tax.

Commencement [Section 25(l)(j)(i):1 June 1987]

[Remainder:1 January 1988]

PART 1 PRELIMINARY

1. SHORT TITLE AND APPLICATION

(1) This Act may be cited as the Income Tax Act.

(2) Subject to subsection (3), this Act applies to—

(a) the income year 1988 and subsequent years of income;

and

(b) the deduction of withholding tax from payments made on

or after 1 January 1988.

(3) Sections 58 and 65 to 74 inclusive apply to tax on income

derived in the year 1998 and each subsequent income year.

(Amended by Act 12 of 1999)

2. INTERPRETATION

(1) In this Act, unless the context otherwise requires—

―agent‖ includes any partnership, company or body of persons

which is acting as an agent;

―appeal commissioners‖ means the Appeal commissioners

appointed under section 108;

12 Cap.15.02 Income Tax Act Laws of Saint Lucia

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―approved pension fund‖ means a pension fund approved for

the purposes of this Act under section 63;

―assessable income‖ means assessable income as defined in

section 8 and as ascertained in accordance with Part 5;

―assessment‖ in relation to any person—

(a) means a determination by the Comptroller—

(i) of the amount of chargeable income and the

tax chargeable thereon,

(ii) of the amount of any loss allowable as a

deduction, or

(iii) that no tax is chargeable; and

(b) includes, where the context so requires, an

additional assessment or a reduced assessment;

―body of persons‖ means any association of persons,

howsoever described, but does not include an

incorporated company or a partnership;

―business‖ means any profession, trade, venture or undertaking

and includes the provision of personal services or

technical and managerial skills and any venture or

concern in the nature of trade, but does not include any

employment;

―chargeable income‖ means chargeable income as ascertained

in accordance with Part 6;

―child‖ in relation to an individual, includes a step-child, a

child born out of wedlock or an adopted child;

―commercial building‖ means a building that is used or is

purchased, constructed, reconstructed, altered or adapted

to be used for commercial purposes including use as

offices or a warehouse or for any trade other than—

(a) a building let out as a dwelling house;

(b) a building used for the purposes of carrying on any

other qualifying business;

(Inserted by Act 15 of 2003)

―Comptroller‖ means the Comptroller of Inland Revenue;

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Revision Date: 31 Dec 2008

―company‖ means a body corporate, wherever incorporated,

but does not include a partnership or an unincorporated

body of persons;

―controlled company‖ has the meaning given to it in section

39(3);

―disposition‖—

(a) means any settlement, trust, agreement,

arrangement or gift whereby assets, including a

right to income, are transferred from one person to

another, whether beneficially or as a trustee;

(b) does not include—

(i) a transfer of assets by will or other

testamentary disposition, except to the extent

provided by section 15, or

(ii) the assignment of any income by a deed or

assignment, howsoever described;

―earned income‖ means income accruing directly from the

carrying on of a business or accruing as employment

income within the meaning of section 34;

―employment‖ means any employment in which the

relationship of employer and employee subsists or an

appointment in an office whether public or not and

whether or not that relationship subsists;

―executor‖ means the executor, administrator or other person

administering or managing the estate of a deceased

person;

―graduate‖ means a person who has successfully completed

education at a community college, a university or at any

institution providing technical, vocational or professional

education of a standard equivalent to university education.

―incapacitated person‖ means a minor, a person of unsound

mind, or a mental patient;

―management charges‖ means charges made for the provision

of –

(a) management services;

(b) personal services;

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―Minister‖ means the Minister to whom responsibility for the

subject of finance is assigned;

―minor‖ means an individual who has not attained the age of 18

years;

―ordinarily resident‖, in relation to an individual, means a

person who is a resident within the meaning of paragraph

(a)(i) of the definition of ―resident in Saint Lucia‖;

―permanent establishment‖—

(a) means a fixed place or premises through which the

business of a person is wholly or partly carried on;

and

(b) includes—

(i) a place of management,

(ii) a branch or an office,

(iii) a factory or workshop,

(iv) premises used as a sales outlet,

(v) a building site or construction, assembly or

installation project, only if such site or project

continues for a period of more than 6 months,

(vi) the maintenance of plan and machinery for

rental, and

(vii) a mine, quarry or any other place of extraction

or exploration of natural resources;

―person‖ includes an individual, a trust, the estate of a deceased

person, a company, a partnership and every other juridical

person;

―previous Act‖ means the Income Tax Act, 1965 as amended;

―regulations‖ means regulations made under this Act;

―representative taxpayer‖ means, in relation to—

(a) the estate of a deceased person, an incapacitated

person, a trust or a settlement, the trustee of that

person;

(b) a non-resident, any person appointed under section

22 to act as agent on his or her behalf; or

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Revision Date: 31 Dec 2006

(i) by a deceased person at the date of his or her

death, the executor of the estate of that

deceased person, or

(ii) at the commencement of liquidation by a

company which is being wound up, the

liquidator of that company;

―resident in Saint Lucia‖, in relation to a year of income

means—

(a) in the case of an individual, that—

(i) his or her permanent place of abode is in Saint

Lucia and that he or she is physically present

therein for some period of time in the income

year, unless the Comptroller is satisfied that

his or her absence throughout the whole of the

income year was for the purpose of education,

medical treatment, the performance of duties

on behalf of the Government or for any other

purposes which, in the opinion of the

Comptroller, is reasonable,

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(ii) he or she is physically present in Saint Lucia

for not less than 183 days in the year of

income, or

(iii) he or she is physically present in Saint Lucia

for some period of time in that year of income

and such period is continuous with a period of

physical presence in the year of income for

the immediately preceding or succeeding year

of income of such duration as to qualify him

or her for the status of a resident for such

preceding or succeeding year under

subparagraph (ii);

(b) in the case of an estate of a deceased person, that

immediately prior to his or her death the deceased

person qualified for the status of a resident under

paragraph (a);

trust or body of persons was established in Saint

Lucia; and

(d) in the case of a company, that such company was—

(i) incorporated in Saint Lucia, or

(ii) if incorporated outside Saint Lucia, was

managed and controlled in Saint Lucia,

and the terms ―resident‖ and ―non-resident‖ in relation to

a person, mean that such person is resident or non-

resident in Saint Lucia as the case may be;

―royalties‖ means amounts paid as consideration, however

described—

(a) for the use of, or the right to use—

(i) copyrights, artistic or scientific works,

patents, trade marks, designs, plans, secret

processes or formulae, motion picture films,

tape or films for radio or television

broadcasting, or

(ii) information concerning industrial,

commercial or scientific knowledge; or

(b) in respect of the operation of a mine, quarry or other

place of extraction of natural resources;

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―separated‖ in relation to the marital status of an individual,

means a person who is living apart from his or her spouse

under—

(a) an order of a court of competent jurisdiction; or

(b) any other circumstances where there is sufficient

evidence for the Comptroller to conclude that the

separation is permanent;

―small scale business enterprise‖ means an enterprise

incorporated during the year of income and—

(a) is wholly owned by citizens of Saint Lucia who

have not been owners of previously incorporated

businesses in Saint Lucia;

(b) employs not more than 50 persons;

$1,000,000;

(d) engages in an activity on the listing of preferred

business activity as approved by the Minister of

Commerce in accordance with the provisions of any

law in respect of micro or small scale business;

(e) satisfies the provisions of any law in force in

respect of micro or small scale business;

―tax‖ means the tax charged under this Act and for the purposes

of recovery of tax includes any penalty, interest or other

charge imposed under this Act but does not include any

fine imposed by a court; and any reference to tax payable

under the laws of another country means a tax of a

substantially similar nature to the tax charged under this

Act;

―trade‖ means any trade, manufacture, business and any

adventure or concern in the nature of trade and includes

farming, fishing, market gardening, husbandry and the

occupation of land for any commercial purpose;

―trading stock‖, in relation to any business, means anything

produced, manufactured, purchased or otherwise acquired

for the purposes of manufacture, sale or exchange

including uncompleted work on hand or in progress, or

the proceeds from the disposal of which form, or will

form, part of the assessable income of such business;

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Revision Date: 31 Dec 2008

―trustee‖ means a person appointed or constituted trustee by act

of parties, by order or declaration of a court or by

operation of law and includes any person having or taking

upon himself or herself the administration or control of

any property subject to a trust;

―withholding tax‖ means any tax deducted or deductible under

sections 53(5), 63(13) or 76;

―year of income‖ and ―income year‖ mean—

(a) the period of 12 months commencing on 1 January

in each year; or

(b) in the case of a company or any unincorporated

business or partnership whose financial year does

not begin in January, its financial year is its year of

income.

(2) Any reference in this Act to ―any person employed in carrying

out the provisions of this Act‖ includes a person whose services

under agreement with the Government are provided by any

other Government or international agency to assist with the

administration of this Act.

(3) Where gains or profits are ascertainable only by reference to the

year of income and for the purpose of the charge to or

exemption from tax, apportionment of such gains or profits to

different periods of time is necessary, then such apportionment

may be made on a time basis according to the respective lengths

of those periods of time.

(4) The term ―permanent establishment‖ does not include—

(a) the use of facilities solely for the purpose of storage,

display or delivery of goods or merchandise belonging to

the person;

(b) the maintenance of a stock of goods or merchandise

belonging to the person solely for the purpose of storage,

display or delivery;

belonging to the person solely for the purpose of

processing by another person;

(d) the maintenance of a fixed place of business solely for the

purpose of purchasing goods or merchandise or of

collecting information for the person;

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Revision Date: 31 Dec 2008

(e) the maintenance of a fixed place of business solely for the

purpose of carrying on, for the person, any other activity

of a preparatory or auxiliary character.

(Amended by Acts 18 of 1990, 11 of 1998, 9 of 2001 and 7 of 2006)

PART 2 ADMINISTRATION

3. COMPTROLLER OF INLAND REVENUE

The responsibility for the administration of this Act is vested in the

Comptroller of Inland Revenue.

4. DELEGATION BY COMPTROLLER

(1) The Comptroller may, in relation to any matter or class of

matter, delegate to any other person employed in carrying out

the provisions of this Act, any powers, functions or duties

conferred or imposed on the Comptroller by this Act other

than—

(a) the power of delegation conferred by this section; and

(b) the power to sanction prosecutions under section 138.

(2) Any delegation made under this section is revocable at any time

by the Comptroller and no delegation prevents the exercise of

such powers, duties or functions by the Comptroller.

5. INDEMNITY AGAINST LIABILITY FOR ACTS DONE

The Comptroller and any person employed in carrying out the

provisions of this Act shall be indemnified against any liability for

any acts done in good faith by or in the name of the Comptroller

under any duty imposed by this Act.

6. SECRECY

(1) Subject to this section, the Comptroller and every person

employed in carrying out the provisions of or having any

official duty under this Act shall regard and deal with all

documents and information relating to any person, and all

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Revision Date: 31 Dec 2008

confidential instructions in respect of the administration of this

Act which may come into his or her possession or to his or her

knowledge in the course of his or her duties, as secret.

(2) This section does not apply to the disclosure of any confidential

information—

(a) to any person authorized by –

(i) Cabinet,

(ii) the Comptroller, or

(iii) any other enactment,

to receive such information;

(Substituted by Act 7 of 2006)

(b) to any other person to whom such disclosure is necessary

for the purposes of this Act; or

with which an international agreement for the avoidance

of double taxation or exchange of information exists, for

the purposes of that agreement.

(3) This section does not prevent the disclosure of information of a

statistical nature, but any such information shall be supplied in a

manner that does not disclose the identity of any person in

relation to his or her income.

(4) A person appointed under or employed in carrying out the

provision of this Act and a person to whom confidential

information is disclosed under subsection (2)(a) or (2)(b) shall

make an oath or affirmation of secrecy in the manner and form

approved by the Comptroller.

(5) Any oath or affirmation under subsection (4) may be taken

before the Comptroller (who is hereby authorised to administer

such oath or affirmation) or before a magistrate, and no fee is

payable.

(6) The obligation as to secrecy imposed by this section continues

to apply in respect of any person although he or she ceases to

have any official duty under or be employed in carrying out the

provisions of this Act.

(7) A person referred to in subsection (1) is not required to produce

in any court, any return of income, assessment or notice of

assessment or to divulge or communicate any information

20 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

which comes to his or her knowledge in the performance of his

or her duties under this Act except to the extent to which it is

necessary for the purposes of this Act.

PART 3 IMPOSITION OF INCOME TAX

Division 1 — Charge to Tax

7. CHARGE TO TAX: GENERAL

(1) Subject to subsections (5) and (6), tax shall be charged for each

year of income on the chargeable income for that year of every

person.

(2) The persons chargeable to tax shall be those persons specified

in Division 2 of this Part.

(3) Subject to Part 7, the chargeable income of a person is

ascertained by deducting from the person‘s assessable income

any amounts which is allowable under Part 6.

(4) The tax payable by a person is calculated in accordance with

Part 8.

(5) Where income ascertained in accordance with Part 5, accrues

directly or indirectly to a non-resident person, from any source,

other than from the exercise of employment or the carrying on

of business through a permanent establishment, such income

shall not form part of the assessable income of such person and

the gross amount of such income is liable to withholding tax in

accordance with sections 76 and 80.

(6) Where income accrues to any person by way of a cash benefit

payable from an approved pension fund or on the surrender of a

life assurance policy, in circumstances where a separate charge

to tax is created, such income shall not form part of the

assessable income of such person and the gross amount thereof

is liable to withholding tax in accordance with sections 53(5) or

61(13) as the case may be.

(Amended by Act 18 of 1990)

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Revision Date: 31 Dec 2008

8. SCOPE OF CHARGE TO TAX

(1) The assessable income of a taxpayer is—

(a) where the taxpayer is a resident, subject to subsection (2),

all amounts ascertained in accordance with Part 5,

accrued directly or indirectly from all sources whether in

or out of Saint Lucia; and

(b) where the taxpayer is a non-resident, subject to section

7(5) all amounts ascertained in accordance with Part 5,

accrued directly or indirectly from all sources in Saint

Lucia,

which are not exempt from tax under Part 4.

(2) Where an individual is a resident but is not ordinarily resident,

his or her assessable income shall include income accrued from

sources out of Saint Lucia but only to the extent that such

income is received in Saint Lucia.

9. INCOME ACCRUED: MEANING OF

(1) Subject to this section, income shall accrue to a person for the

purposes of this Act—

(a) in the case of income from employment, when it is

earned;

(b) in the case of a business, in relation to which the

Comptroller is satisfied that a commercially recognised

system of accounting other than a cash received basis is

regularly followed, when it is credited in the books of

account of such person;

Comptroller has accepted the preparation by that person

of his or her accounts on a cash received basis, when it is

received by him or her; or

(d) in any other case, when it becomes due and payable to

him or her.

(2) Where any person regularly prepares the accounts of his or her

business on a cash received basis the Comptroller may, on

application and in his or her discretion, accept such method of

accounting or may direct that accounts be prepared on an

22 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

accrual basis and the income accrued to such person shall be

ascertained accordingly.

(3) Subsection (2) shall not be construed to prevent the Comptroller

from directing the adoption of an accrual basis in respect of a

particular person or class of persons for any year of income by

reason only that a cash received basis had been accepted in

respect of previous years.

(4) Where an amount that would otherwise have accrued to a

person when it was received by him or her is not paid to him or

her but is reinvested, accumulated, carried to any reserve or

otherwise dealt with on his or her behalf or as he or she directs,

it shall be deemed to have accrued to him or her on the date it is

so dealt with.

(5) Income shall not cease to have accrued to any person within the

meaning of this section by reason only of the cessation of a

source of income prior to the receipt of any amount from such

source.

10. INCOME DEEMED TO HAVE ACCRUED FROM SOURCES IN SAINT LUCIA

(1) Income accrued to a person accrues from a source situated in

Saint Lucia where it accrues to that person in respect of—

(a) any employment exercised in Saint Lucia irrespective of

where payment is made or the contract of employment is

entered into;

(b) any employment exercised out of Saint Lucia—

(i) in the performance of duties on behalf of the

Government, or

(ii) as an officer or member of the crew of a ship or

aircraft engaged in international traffic, by such

person being an individual who is ordinarily

resident in Saint Lucia;

(i) an individual who is ordinarily resident in Saint

Lucia, where the indebtedness—

(A) was incurred in connection with the

acquisition of, or

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Revision Date: 31 Dec 2008

(B) was charged against, any property situated in

or to be brought into Saint Lucia, or

(ii) any other person, whether resident or non-resident,

who has a permanent establishment in Saint Lucia

in connection with which the indebtedness on which

the interest accrued was incurred, where such

interest is borne by such permanent establishment;

(d) any property physically situate in Saint Lucia;

(e) the provision of management services, including personal

services and technical and managerial skills, in Saint

Lucia where such services are provided for the purposes

of a business carried on in Saint Lucia and the cost of

such services is borne by that business, irrespective of

where the contract for such services was entered into;

(f) a source of income which under any international

agreement made under section 60, is considered to be

situated in Saint Lucia.

(2) Where, under this Act, or under any international agreement

made under section 60, income is considered to accrue—

(a) to a person;

(b) from a source; or

a reference to income accrued shall be construed as including

income considered to accrue.

11. BASIS OF ASSESSMENT

(1) Subject to this section, the assessable income of a person for a

year of income is the whole of income, ascertained in

accordance with Part 5, which accrues to such person during

that year.

(2) Tax is charged for each year of income upon the chargeable

income of any person for that year.

(3) The gains or profits of a person for a year of income so far as

such gains or profits arise from the carrying on of a trade,

business, profession or vocation is—

(a) where there is an established accounting terminal date, the

gains or profits of the 12 months from the established

24 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

accounting terminal date occurring in

immediately preceding the year of income;

the year

(b) in the case of the commencement by any person of any

trade, business, profession or vocation, the gains or profits

from the date of commencement of such trade, business,

profession or vocation occurring in the year immediately

preceding the year of income or occurring in the year of

income to such date in the year of income as may be

agreed by the Comptroller which agreed date will become

the established accounting terminal date;

accounting terminal date, the gains or profits for such 12

month period as the Comptroller in his or her discretion

may determine in respect of the year of income in which

the departure from the established accounting terminal

date occurs and in respect of the next succeeding year of

income; the accounting terminal date resulting from the

change becomes the established accounting terminal date.

(4) Where any person ceases to carry on his or her trade, business,

profession or vocation, the gains or profits of such person

arising from his or her trade, business, profession or vocation

for the year of income in which he or she ceased to carry on his

or her trade, business, profession or vocation is the gains or

profits from the established accounting terminal date in the year

immediately preceding the year of income to the date upon

which he or she ceased his or her trade, business, profession or

vocation.

(5) Although the income of a business charged to tax under this

section may be for a period greater or less than 12 months, any

annual allowances shall be deductible for a year of income only

by reference to a 12 month period.

(6) In this section ―established accounting terminal date‖ means the

accounting date to which the accounts of any trade, business,

profession or vocation of any person are ordinarily made up and

accepted for the purposes of assessment under this Act or in the

case of any new trade, business, profession or vocation, such

date as may be agreed by the Comptroller.

Division 2 — Persons Chargeable to Tax

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Revision Date: 31 Dec 2008

12. PERSONS CHARGEABLE: GENERAL

(1) Subject to this Division, the chargeable income of any person

shall be charged to tax in the name of that person.

(2) Where, under this Division, any income which has accrued to

one person is deemed to have accrued to some other person,

such income shall be included in the assessable income of that

other person and the chargeable income, if any, ascertained

therefrom shall be charged to tax in the name of that other

person.

13. MARRIED WOMEN

Any income accrued to a married woman in the year of income to

which this Act applies shall be charged to tax in her own name.

14. MINOR CHILDREN: DISPOSITIONS TO

(1) Where, by reason of any disposition made by any disponer for

the benefit of a minor whether or not the child is related to the

disponer, any income has accrued to that child, such income

shall, during his or her minority or until the prior death of the

disponer, be deemed to have accrued to the disponer and shall

be included in his or her assessable income.

(2) Where, during a year of income, an individual ceases to be a

minor, subsection (1) shall apply only in respect of income

accrued prior to the date upon which he or she ceased to be a

minor.

15. SETTLEMENTS AND WILLS

(1) Subject to subsection (3), any income accruing to a trust, where

there is no beneficiary entitled to the immediate benefit thereof,

shall be included in the assessable income of the trust and the

chargeable income ascertained therefrom shall be charged to tax

in the name of the trustee.

(2) Subject to section 14, any income accruing to a trust, where

there is a beneficiary entitled to the immediate benefit thereof,

accrues to the beneficiary and is to be included in his or her

assessable income.

26 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(3) Where, under a trust, a beneficiary may be entitled to the

benefit of the income thereof at the discretion of the trustee, any

income so applied for his or her benefit accrues to the

beneficiary and is to be included in his or her assessable

income.

(4) Where, in any will or other testamentary disposition, a

stipulation is made to the effect that the beneficiaries therein, or

one or more of them, shall not receive any income accrued

under such will or disposition until the happening of an event,

whether fixed or contingent, any such income as would, but for

the stipulation, have accrued to the beneficiaries shall, until the

happening of that event accrues to the trust and shall be

included in the assessable income of the trust and the

chargeable income ascertained therefrom is to be charged to tax

in the name of the trustee.

(5) Where any deed of donation, settlement or other disposition

inter vivos (in this subsection referred to as ―the disposition‖)

made by any person (in this subsection referred to as ―the

disponer‖) contains a stipulation to the effect that the

beneficiaries therein, or one or more of them, shall not receive

any income accrued under the disposition until the happening of

an event, whether fixed or contingent, any such income as

would, but for the stipulation, have accrued to the beneficiaries,

until the happening of that event or the prior death of the

disponer, accrues to the disponer and is to be included in his or

her assessable income.

(6) In subsections (1), (2) and (3) ―trust‖ means a trust created—

(a) by will or other testamentary disposition; or

(b) by a deed or donation, settlement or other disposition

inter vivos.

16. REVOCABLE DISPOSITIONS

(1) Where income accrues to a person under a revocable disposition

the income accrues to the disponer and is to be charged to tax in

his or her name.

(2) For the purposes of this section, a disposition revocable where

the disponer—

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Revision Date: 31 Dec 2008

(a) has a right to reassume control, directly or indirectly, over

or has access to the property or income of the disposition;

(b) has power to revoke or otherwise determine the

disposition, whether immediately or in the future and

whether with or without the consent of any other person,

but only where, in the event of the exercise of such power

the disponer will or may become beneficially entitled to

the whole or any part of the property or income of the

disposition.

(3) Where part only of a disposition is capable of revocation,

subsection (1) applies only to such part of the disposition.

(4) Subsection (2) does not deem a disposition to be revocable by

reason only of a power of revocation in such disposition in

relation to the interest of any beneficiary therein where such

power of revocation is limited to arise only in the event that

such beneficiary should pre-decease the disponer.

17. DECEASED PERSONS

Any income accrued to an individual and not included in any

assessment made prior to his or her death is to be included in his or

her assessable income and the chargeable income ascertained

therefrom is to be charged to tax in the name of his or her executor in

the same amount as would have been charged if that person had not

died.

18. ESTATES OF DECEASED PERSONS

(1) Any income accruing to the estate of a deceased person before

there is a beneficiary entitled to the immediate benefit thereof is

to be included in the assessable income of the estate and the

chargeable income ascertained therefrom is to be charged to tax

in the name of the executor.

(2) Any income accruing to the estate of a deceased person on or

after the date on which there is a beneficiary entitled to the

immediate benefit thereof other than as a legatee, accrues to the

beneficiary and is to be included in his or her assessable

income.

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Revision Date: 31 Dec 2008

(3) Where a beneficiary of the estate of a deceased person is a

legatee any income accruing in respect of the property of which

he or she is the legatee, on or after the earlier of—

(a) the date of the handing over of the property; or

(b) the date of the completion of the administration of the

estate,

accrues such legatee and is to be included in his or her

assessable income.

(4) For the purposes of this section—

(a) a beneficiary is entitled to the immediate benefit of any

income accrued to the estate of a deceased person on or

after the date of completion of the administration of the

estate; and

(b) the date of completion of the administration of the estate

means the date upon which the whole of the debts relating

to the estate of the deceased person have been ascertained

and paid or provided for.

19. INCAPACITATED PERSONS

Subject to this Part, any income accrued to an incapacitated person is

included in his or her assessable income and the chargeable income

ascertained is charged to tax in the name of the trustee in the same

amount as would be charged if that person was incapacitated.

20. INSOLVENT PERSONS

Where a person becomes bankrupt—

(a) any income accrued to that person in his or her own right

after the period of insolvency and prior to the date his or

her insolvency ceases is included in the assessable income

of that person; and

(b) any income accrued in respect of the estate of that person

held by his or her trustee during the period of insolvency

is included in the assessable income of the estate and the

chargeable income ascertained is charged to tax in the

name of the trustee.

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Revision Date: 31 Dec 2008

21. PARTNERSHIPS

(1) A partnership shall not be charged to tax in its own name but all

income accrued to it in a year of income is to be charged on the

partners for the year of income in accordance with this section.

(2) The chargeable income of a partner for a year of income—

(a) includes an amount equal to that proportion of the

partnership assessable income for that year of income

which the amount of the net partnership profit or income

to which he or she is entitled under the partnership

agreement, ascertained under that agreement, bears to the

net partnership profit or income; or

(b) is calculated after deducting an amount equal to that

proportion of the partnership assessed loss for that year of

income which the amount of the net partnership loss for

which he or she is responsible under the partnership

agreement, ascertained under that agreement, bears to the

net partnership loss.

(3) In this section—

―partnership assessable income‖ means the assessable income

of the partnership calculated as if the partnership were a

person chargeable to tax;

―partnership assessed loss‖ means an assessed loss calculated

in the same manner as partnership assessable income.

22. NON-RESIDENT PERSONS

(1) The chargeable income of a non-resident, where it is not

charged to tax directly on him or her, is charged to tax on his or

her agent in the same amount as would have been charged on

the non-resident.

(2) For the purposes of this section ―agent‖, in relation to a non-

resident, means a person who—

(a) has the management or control of property in Saint Lucia

of such non-resident;

(b) is appointed by the non-resident to act on his or her

behalf; or

to which section 23(2)(b) applies.

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Revision Date: 31 Dec 2008

23. TRANSACTIONS INVOLVING LIABILITY TO TAX

(1) Where any transaction, operation or scheme (hereinafter in this

subsection referred to as ―a transaction‖) including a transaction

involving the alienation of property, which is entered into or

carried out, whether before or after the commencement of this

Act, has the effect of avoiding, reducing or postponing the

liability to tax of any person for any year of income and the

Comptroller is of the opinion that the transaction—

(a) is entered into or carried out by means or in a manner

which would not normally be employed in the entering

into or carrying out of a transaction of the nature of the

transaction in question; or

(b) creates rights or obligations which would not normally be

created between independent persons dealing at arm‘s

length under a transaction of the nature of the transaction

in question,

the Comptroller shall determine the liability to tax as if the

transaction had not been entered into or in such other manner as

he or she considers appropriate to counteract such avoidance,

reduction or postponement of liability as would otherwise be

effected by the transaction.

(2) Where a resident carries on business with a non-resident and, in

the opinion of the Comptroller, by reason of the relationship

between such persons the course of business between them has

been so arranged that the business done by the resident

produces to him or her either more or less gains or profits than

those which would be expected to arise from that business if

such relationship had not existed, the Comptroller may

determine in such manner as appears to him or her to be

reasonable—

(a) whether any additional gains or profits should be deemed

to be assessable income of the resident person; and

(b) whether any part of the gains or profits of the non-resident

person should be considered to accrue from a source in

Saint Lucia.

(3) Where a loan, including a constructive loan, is made by a

resident person to a non-resident person, either free of interest

or at a rate of interest lower than the commercial rate generally

prevailing at the time the loan was made, and the Comptroller is

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Revision Date: 31 Dec 2008

of the opinion that the loan is not one between independent

persons dealing at arm‘s length with each other, interest is

considered to accrue to the resident person for each year of

income after the loan is made at such commercial rate as the

Comptroller considers reasonable in the circumstances.

(4) In subsection (3) a constructive loan means any indebtedness to

a resident person arising from the carrying on of business

transactions between that person and a non-resident person

which remains unpaid in circumstances which in the opinion of

the Comptroller would not have operated as between

independent persons dealing with each other at arm‘s length.

24. RESPONSIBILITY OF REPRESENTATIVE TAXPAYERS

(1) A person in whose name the chargeable income of a deceased

person, the estate of a deceased person, an incapacitated person,

a non-resident or any other person is chargeable, is responsible

for doing all such things as are under this Act required to be

done by a person chargeable to tax.

(2) Where a person is liable to furnish a return of income under

section 84, whether or not chargeable to tax, the obligation

imposed by subsection (1) applies to any representative

taxpayer acting on behalf of such person.

PART 4 EXEMPT INCOME

25. EXEMPTIONS

(1) There is exempt from the tax—

(a) the official emoluments of the Governor General, Deputy

Governor General and of any Acting Governor General,

any gratuity or pension payable to a former Governor or

Governor General upon his or her retirement, any gratuity

payable to his or her legal personal representative upon

the death of a former Governor or Governor General and

any pension payable to the widow of a former Governor

or Governor General upon his or her death;

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Revision Date: 31 Dec 2008

(b) the official emoluments payable in respect of their offices

to—

(i) heads of diplomatic missions and consulates

accredited to Saint Lucia,

(ii) members of the staff of such missions and

consulates, except such persons who are citizens of

or ordinarily resident in Saint Lucia;

(i) any international organisation of which Saint Lucia

and one or more other countries are members, or

(ii) any other Government, in connection with the

provision of any technical co-operation services, to

the extent and subject to such conditions as may be

prescribed by any enactment or in any agreement or

memorandum of understanding entered into by the

Government;

(d) any war pension (including any disability pension) or

gratuity in respect of service during war;

(e) any amount accruing under a scholarship or similar

education grant to a person receiving full time education

at a school, college, university or other educational

establishment;

(f) any interest accrued on any loan charged on the public

revenue, which is declared by the Minister to be exempt;

(g) any income accrued to any individual by way of—

(i) interest on a deposit in any bank in Saint Lucia, or

(ii) discounts arising on Treasury Bills;

(h) any income accrued to a company on Treasury bills,

bonds and debentures;

(i) any amount accrued by way of gratuity on the termination

of a contract of employment, however, this exemption

does not apply—

(i) if the contract is renewed, extended or replaced by a

new contract with the same employer or associate of

that employer, or

(ii) to any part of the gratuity in excess of 25% of the

gross income of the employee for the period,

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Revision Date: 31 Dec 2008

(j) any income accrued to—

(i) an individual for his or her office, or

(ii) such an individual or his or her dependents by way

of pension in respect of his or her past services;

as a minister of religion or other person in Holy Orders in

the service of any religious body approved for this

purpose by the Minister;

(k)

(i) the first $6,850, or

(ii) the first $6,000,

of any income accruing from a source in Saint Lucia by

way of pension for past services, being payable—

(A) by the Government or an approved pension

fund;

(B) by a pension fund which is not an approved

fund or directly by an employer where, and to

the extent to which, the Comptroller is

satisfied that such pension is reasonable in

amount having regard to the length of service

to the employer, the age or state of health of

the employee and the remuneration payable

to him or her prior to his or her retirement; or

case of a resident individual, who is a citizen

of Saint Lucia and has reached the age of 60

years;

(l) any pension accruing from a source outside Saint Lucia to

any retired person, who, prior to his or her retirement, was

not resident in Saint Lucia;

(m) any benefits payable under the National Insurance

Corporation Act to any person by way of—

(i) sickness benefit,

(ii) invalidity benefit,

(iii) maternity benefit,

(iv) funeral grant, or

(v) any child allowance payable as a survivor‘s benefit

or death benefit;

34 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(n) the income of any approved pension fund;

(o) the income of any local authority as defined in the Local

Authorities Act, 1916;

(p) the income of any trade union in so far as such income is

not derived from a business carried on by it;

(q) the income of any registered building society or co-

operative society;

(r) the income of any religious, charitable, or educational

institution of a public character in so far as such income is

not derived from a business carried on by it for profit,

other than a business carried on for the primary purpose

of assisting disabled persons to learn or exercise a trade or

skill;3

(s) the income of the National Insurance Fund established

under the National Insurance Corporation Act;

(t) the income of the Saint Lucia Banana Growers

Association; the Windward Islands Banana Growers

Association; and the Saint Lucia Agriculturists

Association Limited;

(u) the income of the Caribbean Development Bank, and the

Council of Legal Education;

(v) any travel, subsistence, entertainment, telephone, housing

or transport allowance paid to any member of Parliament

or any public officer in connection with the carrying out

of the duties of his or her office;

(w) the official emoluments, allowances and pensions payable

in respect of their offices to the Chief Justice and other

judges of the Eastern Caribbean Supreme Court;

(x) distributions from companies;

(y) any income accruing to any individual from fishing or

agriculture, including horticulture and the use of land for

husbandry including the keeping or breeding of livestock

or poultry or the growing of crops of fruit or vegetables.

However, this paragraph shall not be construed to set off

the losses incurred from the activities specified in this

3 Editor’s note: Incorporated Trustees of the Presentation Brothers is declared to be an Educational institution of a public character by Gazette Notice 267/1958

35Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

paragraph against income from any other source or

activity;

(z) any income earned on securities issued by member

governments of the Eastern Caribbean Central Bank;

(za) interest earned on loan to the Government of Saint Lucia

in accordance with statutory instruments 15/1997 and

25/1997 until the payment of the loan authorised under

these 2 statutory instruments;

(zb) interest earned on loan to the Saint Lucia Development

Bank and National Commercial Holding Ltd by the

Barbados Mutual Life Assurance Society and Life of

Barbados Ltd. until the payment of the loan authorised

under statutory instrument 15/1997 and 25/1997;

(zc) the income earned by way of tips by artistic,

entertainment and sports personnel, office clerks,

customer service clerks, housekeeping and restaurant

service workers and other employees in similar categories

working in restaurants and hotels but excluding managers

and heads of department. In this paragraph—

―hotel‖ includes guesthouse, inn or any commercially run

establishment which engages in the business of

providing accommodation for guests;

―tips‖ includes any amount paid by a guest as a gratuity

for services rendered by an employee of an hotel or

restaurant, and includes service charge.

(zd) the income earned by public officers as a result of the

retroactive salary increase payable for the period 1 April

1995 to 31 March 1999 until the payment of that

retroactive salary increase;

(ze) income earned by way of bonus approved to be paid to

certain categories of civil servants in the 1998/1999

Budget presentation until the payment of the sum of $2

million approved to be paid to certain categories of civil

servants in the 1998/1999 Budget;

(zf) bonds in the amount of EC$20 million issued for the

funding of the low income housing initiative of the

National Commercial Bank Mortgage Financial Company

of Saint Lucia Limited;

36 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(zg) profits earned by the National Insurance Property

Development & Management Company Ltd. on

development fees and project management fees gained

under the refurbishment of police stations project;

(zh) any income accruing from trading in securities under the

Securities Act to any citizen or resident of any member

State of the Organisation of Eastern Caribbean States or

to any company incorporated in and registered in any

member State of the Organisation of Eastern Caribbean

States;

(zi) income earned on the emolument paid to professional

staff of the Financial Centre Corporation and the

International Financial and World Investment

Corporation;

(zj) income tax chargeable on returns from investments in the

Production Section Equity Fund;

(zk) the income of consultants and staff of the Project

Coordination Unit, OECS Emergency Recovery and

Disaster Management Project;

(zl) the income of the Project Coordinator and individual

Consultants of the World Bank Technical Assistance

Water Sector Reform Project;

(zm) lump sum payment of $850 in lieu of retroactive pay for

the year April 2001 to March 2002 made in December

2003 to all public servants inclusive of those employed

after March 2002 and still employed in the Public Service

as at December of 2003;

(zn) the income earned by public officers as a result of the

retroactive salary increase payable for the periods April

2002 to March 2003 and April 2003 to December 2003;

(zo) the income arising from CWC 2007 and earned by —

(i) CWC 2007 Inc., ICC and its members, IDI, GCC and

WICB and its members and their respective advisers

not ordinarily resident in Saint Lucia;

(ii) a member of a squad;

(iii) a CWC 2007 Inc. official; or

(iv) staff of ICC, IDI or GCC.

37Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

In this paragraph —

"CWC 2007 Inc." means ICC Cricket World CupWest Indies

2007 Inc., a company incorporated in the British Virgin

Islands;

"CWC 2007 Inc. official" means the Chairman, Vice Chairman,

members of the Board, Chief Executive Officer, Financial

Controller, Secretary or Manager of CWC 2007 Inc.;

"GCC" means Global Cricket Corporation Pte Limited, a

company incorporated in Singapore as Company No.

CRN200008431R and its successors or assigns;

"ICC" means the International Cricket Council, a company

limited by guarantee and incorporated in the British

Virgin Islands as Company No. 9112;

―IDI‖ means ICC Development (International) Limited, a

company incorporated in the British Virgin Islands as

Company No. 90940;

―income‖ includes basic salary, appearance fees, endorsement

fees, prize money, and man-of-the match and man-of-the-

series awards;

―WICB‖ means the West Indies Cricket Board Inc., a company

incorporated in the British Virgin Islands as Company

No. 302180;

(zp) the income of expatriate Commissioners appointed to

review the terms and conditions of employment of

medical practitioners and nurses;

(zq) the income earned by way of back pay to non-established

and fortnightly paid workers who are affiliated with the

National Workers Union;

(zr) the income earned by way of back pay to non-established

and fortnightly paid workers who are affiliated with the

National Workers Union for the triennium April 2001 to

March 2004;

(zs) income arising from trading in securities other than by

way of a business on an exchange licensed by the Eastern

Caribbean Securities Regulatory Commission pursuant to

the Securities Act, Cap. 12.18;

(zt) contributions to the captive insurance fund established by

the Saint Lucia Electricity Services Company Limited;

38 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

zu the income earned by public officers as a result of the

retroactive salary increase payable for the period 1 April

2007 to 30 September 2008 until the payment of that

retroactive salary.

(Amended by Acts 18 of 1990, 24 of 1996, 11 of 1998 and 9 of

2001 and S.I. 78/1990, 56/1996, 26/1997, 38/1997, 102/1997,

102/1997, 34/1999, 69/2000, 141/2000, 232/2000, 98/2001,

136/2001, 12/2003, 19/2003, 59/2003, 4/2004, 60/2004,

75/2004, 82/2004, 4 of 2007, 40 of 2007,172/2007 and 100 of

2008)

(2) The exemptions specified in subsection (1) may be added to,

deleted or otherwise varied by order made by statutory

instrument by the Minister with the approval of Cabinet.

26. EXEMPTION: HOTELS

(1) Subject to this section the income accruing from an hotel shall

be exempt where the construction of such hotel or of any

extensions to the residential accommodation therein

commenced after the commencement of this Act.

(2) An exemption under subsection (1) shall not apply unless

approval of such exemption is given by Cabinet following

application in writing made to the Minister.

(3) Where approval has been given in respect of the construction of

an hotel there is exempt from tax for such period of time as may

be determined by Cabinet, but not exceeding a maximum of 15

years all income accruing to the owner or to the lessee from the

carrying on of the business of the hotel.

(4) Where any hotel ceases to be used as a hotel by the owner or

lessee thereof during the tax holiday period the exemption

provided by this section shall cease to apply from the date of

cessation of such use.

(5) Where any hotel is sold during the tax holiday period but

continues to be used as a hotel, the exemption provided by this

section continues to apply to the new owner or the lessee, as the

case may be, for the remainder of the period.

(6) Where approval has been given in respect of any extensions to

an existing hotel there is exempt from tax for such period of

time as may be determined by Cabinet, but not exceeding a

Laws of Saint Lucia Income Tax Act Cap.15.02 38A

Revision Date: 31 Dec 2008

maximum of 10 years all income attributable to such

extensions, accruing to the owner or to the lessee from the

carrying on of the business of the hotel.

(7) The income exempted under subsection (3) or (6) are

ascertained after taking into account any allowances for capital

expenditure to which the owner or the lessee would have been

entitled under Schedule 2 if such income had not been exempt

from tax.

(8) For the purpose of subsection (6) income attributable to the

extensions to an existing hotel shall be taken to be such

proportion of the total income accruing from the hotel as the

number of additional bedrooms in the extensions bears to the

total number of bedrooms in the hotel.

(9) In this section—

―hotel‖ means a building or group of buildings used to provide

services and accommodation to guests for reward,

containing—

(a) not less than 6 bedrooms;

(b) one or more kitchens in which meals may be

prepared by employees of the hotel owner or hotel

operator for the guests; and

the guests in which meals may be served by

employees of the hotel owner or hotel operator to

such guests.

(Amended by Act 15 of 2003)

―tax holiday period‖ means any period of exemption from tax

granted by Cabinet under this section.

27. EXEMPTION: INCOME FROM RESIDENTIAL ACCOMMODATION

(1) Subject to this section, the income accruing to any person from

the construction and sale by him or her, or on his or her behalf,

of residential accommodation in Saint Lucia shall be exempt

from tax.

(2) Exemptions under subsection (1) shall not apply unless—

38B Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(a) the construction is in an approved sub-division as certified

by the Minister of Finance and Planning;

(b) the cost of construction of such residential

accommodation does not exceed $200,000 per unit of

housing or such other sum as may be prescribed;

year is not less than 5;

(d) the houses are sold within a period of 10 years after

completion of construction.

(3) Any rental income accruing to the person referred to under

subsection (1) from the leasing of such residential

accommodation during a period of 10 years after completion of

construction shall be exempt from tax provided the amount of

rental does not exceed $500 per month or if higher, the

proportion that $500 bears to the total monthly rental.

(4) In ascertaining the income which is exempt under this section,

any capital allowances to which the owner would have been

entitled under Part 2 of Schedule 2 shall be taken into account

in the same manner as if the income were chargeable to tax.

(5) In ascertaining the income which is exempt under this section,

sections 37 and 38 shall apply.

(Substituted by Act 11 of 1998)

28. EXEMPTION: INTEREST FROM HOUSING MORTGAGES

(1) Subject to this section, where any person whether resident in

Saint Lucia or not, lends money to any other person by way of

mortgage in connection with the purchase, construction or

reconstruction of residential accommodation in Saint Lucia,

either for owner occupancy or for rental purposes, there is

exempt from tax any income accruing to the mortgagee by way

of interest on the loan secured by, and any service charge

payable under such mortgage.

(2) The mortgage referred to in subsection (1) is a mortgage in

respect of which the rate of interest and service charge do not

exceed 11% and the exemption only applies where the

mortgage does not exceed $150,000.

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Revision Date: 31 Dec 2008

(3) Where the rate of interest and service charge or the amount of

the mortgage exceed the limits specified in subsection (2), the

income which is exempt from tax is such proportion of the total

income accruing as—

[Next page is 39]

39Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

(a) the rate of 11% bears to the total interest and service

charge payable; or

(b) the sum of $150,000 bears to the total amount of the

mortgage, in the income year or where both limits are

exceeded, the lesser thereof.

(4) Where interest accrues to a resident company by way of interest

or service charge which is exempt from tax under this section,

such exempt income may be distributed by way of dividend to

the shareholders and any distribution so made, whether during

the period of exemption or at any subsequent time, subject to

section 31 is exempt from tax in the hands of the shareholders.

(5) The rate of interest and service charge and the mortgage limit

specified in subsection (2) may be varied by order made by

statutory instrument by the Minister.

29. EXEMPTION: INTEREST PAID ON APPROVED BORROWINGS BY MORTGAGE COMPANIES

Where a company carries on a business which consists of lending of

moneys in relation to mortgages, the interest from which is exempt

under section 28, the Minister may, by order published in the Gazette

exempt, in the hands of the debenture holders, the amount of any

interest payable by that company in respect of debenture borrowing

by it for the purpose of financing the purchase, construction or

reconstruction of houses where he or she is satisfied as to the

reasonableness of—

(a) the period during which the debenture issue is to be

repaid; and

(b) the rate of interest payable thereon by the company.

30. COMPTROLLER MAY REQUIRE COMPANY TO KEEP SPECIAL ACCOUNT

Where an order is made under the preceding section in respect of

debenture borrowing, the company shall maintain such special

account as the Comptroller may require showing—

(a) the total borrowings; and

(b) the amount loaned by the company under mortgage the

interest from which is exempt under section 28.

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Revision Date: 31 Dec 2008

31. EXEMPTION: APPROVED ENTERPRISES FOR FISCAL INCENTIVE RELIEF

Where a company is approved as an approved enterprise for the

manufacture of an approved product under the Fiscal Incentives Act it

is exempt from tax under this Act during the currency of its tax

holiday period provided under that Act.

PART 5 ASCERTAINMENT OF ASSESSABLE INCOME

Division 1 — Gains or Profits forming Assessable Income

32. ASSESSABLE INCOME: GENERAL

(1) Subject to this Part, the assessable income of any person

includes the gains or profits from or by way of—

(a) any business;

(b) any employment;

(d) interest or discounts;

(e) premiums, commissions, fees and licence charges;

(f) annuities and other periodic receipts, including receipts by

way of alimony or maintenance; and

(g) any other gains or profits of an income nature which

accrued to that person which are not included under any

other paragraph of this subsection.

(Amended by Act 18 of 1990)

(2) Subsection (1) shall not be construed so as to bring within the

meaning of assessable income, liable to assessment under Part

10, any income which is exempt under Part 4 or any amounts

accrued to a non-resident (other than from the carrying on of a

business or the exercise of employment) which are liable to

withholding tax under section 76.

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Revision Date: 31 Dec 2008

33. BUSINESS INCOME

(1) Subject to this Act, the assessable income of any person for any

year of income, insofar as it is derived from a business, is the

gains or profits accrued from the business during that year of

income.

(2) In ascertaining the assessable income from a business the value

of any trading stock held at the beginning and end of the

income year shall be taken into account in accordance with

Schedule 1.

(3) The assessable income referred to in subsection (1) shall

include—

(a) any amount accrued under any contract of insurance

against loss of profits or loss of stock or by way of

compensation or damage for loss of profits or loss of

stock;

(b) any amount accrued by way of recovery of any bad or

doubtful debt which has been allowed as a deduction for

any previous year of income;

of any expenditure or loss or by way of remission or other

cessation of indebtedness by a creditor, whether in a

bankruptcy or insolvency or otherwise where such

amount has been allowed as a deduction for a previous

year of income;

(d) any amount accrued by way of subsidy for, or in relation

to, the carrying on of a business;

(e) the amount of any balancing charge, ascertained under

Schedule 2.

(4) Where a person carries on a business in and out of Saint Lucia

the amount which considered to accrue to him or her from a

source situate in Saint Lucia in respect of that business is such

sum as appears to the Comptroller to be reasonable having

regard to—

(a) the nature of the operations carried on in and out of Saint

Lucia;

(b) the turnover of the business in and out of Saint Lucia;

business;

42 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(d) the lower of cost or market value of any trading stock

imported into or exported from Saint Lucia; and

(e) any other matters which appear to the Comptroller to be

relevant.

34. EMPLOYMENT INCOME

(1) Subject to this Act, the employment income of any person for

any year of income includes—

(a) any amount accrued by way of wages, salary, leave pay,

fee (including a director‘s fee), commission, bonus or

gratuity;

(b) any travelling, entertainment or other allowance to the

extent to which it does not represent a repayment to the

employee of moneys wholly and exclusively expended by

him or her in the performance of the duties of the

employment;

the employer, but not including the official residence of

the Prime Minister or any High Commissioner or

Ambassador of Saint Lucia;

(d) the value of any other benefit or advantage received or

enjoyed by the employee in respect of his or her

employment; or

(e) any pension payable to a former employee, or the

dependent of a former employee either directly by the

employer or indirectly by the trustees of a pension fund in

respect of the employment, to the extent to which such

pension is not exempt under section 25.

(2) The employment income of any person does not include the

value of any leave passage to or from Saint Lucia granted to

any person, at intervals of not less than 2 years, where such

leave passage is in fact used but this subsection does not

exclude from assessable income—

(i) any money or other consideration received in lieu of the

entitlement to a leave passage, or

(ii) the value of any passage granted to any person at the

termination of a contract of service, except at intervals of

not less than 2 years where such person returns to Saint

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Revision Date: 31 Dec 2008

Lucia after leave to undertake employment under another

contract of service with the same employer on

substantially similar terms.

(3) Where an employment is exercised in Saint Lucia on a visit or

visits to Saint Lucia by a non-resident in the performance of

duties for a non-resident employer, and the Comptroller is

satisfied that—

(a) the visit or visits do not exceed 30 days in any income

year; and

(b) the salary of the employee is not allowable as a deduction

against the profits of a business carried on in Saint Lucia;

such income shall not be charged to tax under this Act.

(4) Subsection (3) does not exclude from assessable income, any

employment income accruing to—

(i) public entertainers, including theatre, motion picture,

radio or television artistes and musicians, or

(ii) athletes or sportspersons.

(5) For the purposes of subsection (1)(c) the rental value of any

quarters or residence provided is considered to be—

(a) where the property is not owned by the employer, the

annual rental paid therefor; or

(b) where the property is owned by the employer, such annual

value as is assessed thereon under the Land and House

Tax Act,

together with any other expenditure of a recurrent nature

including electricity, water and telephone charges and other

outgoings of a domestic nature borne by the employer, less any

amount paid as rent by the employee.

35. LOANS OR ADVANCES BY A CONTROLLED COMPANY TO A SHAREHOLDER, DIRECTOR OR HIGHER PAID EMPLOYEE

(1) Where a controlled company makes a loan or advances any

money to a shareholder therein, an associate of a shareholder

(within the meaning of section 39(3), a director or a higher paid

employee thereof, the amount of such loan or advance shall,

subject to this section, be deemed to be income accrued to the

shareholder, director or employee in the income year in which

44 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

the loan or advance was made, unless he or she satisfies the

Comptroller that—

(a) the loan or advance is repaid within one year after the end

of the income year in which it is made; and

(b) that the repayment was not made as part of a series of

loans or advances and repayments.

(2) Subsection (1) shall not apply to any loan or advance made by a

company in the ordinary course of its business where such

business includes the lending of money.

(3) Where a loan or advance is made to which subsection (1)

applies and the shareholder, associate, director or employee in a

subsequent income year repays the loan or advance either

wholly or in part, the shareholder, director or employee is

entitled to relief, in the year of income for which the repayment

is made, by way of a tax credit of so much of the tax payable

for the year of income for which the amount was considered to

have been income as is attributable to the amount repaid.

(4) In this section a loan or advance to a shareholder, director or

employee is considered to include—

(a) the amount of any payment made by the company to a

third person on his or her behalf; or

(b) the sale price of any trading stock or other property sold

by the company to him or her,

in respect of which debt the shareholder, director or employee is

debited in the books of account of the company.

(5) For the purpose of this section, an employee whose

remuneration from a company exceeds $24,000 per annum is

considered to be a higher paid employee.

36. RENTAL INCOME

The following amounts are to be charged to tax as rental income—

(a) the gross rental payable by the lessee, tenant or occupier

of any property;

(b) any premium or other consideration, however described,

payable for the right of use or occupancy of any property;

agreement, the lessee has effected to property for the

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Revision Date: 31 Dec 2008

benefit of the lessor over a period not exceeding 5 years

as the Comptroller may determine.

Division 2—Deductions allowable in ascertaining assessable income

37. DEDUCTIONS ALLOWABLE : GENERAL

(1) The assessable income of every person for each year of income

shall be ascertained after taking into account the deductions

allowable under this Division.

(2) Subject to subsection (3), in ascertaining the assessable income

of any person for any year of income from any source specified

in section 32 there shall, upon due claims and subject to such

evidence as the Comptroller may require, be allowed as a

deduction, all expenditure wholly and exclusively incurred by

that person during that year of income for the purpose of

producing his or her assessable income from that source.

(3) For the purposes of this Division where income which has

accrued to a person is considered to have accrued to, and is

included in the assessable income of, some other person, any

expenditure incurred by either person in relation to such income

is considered to have been incurred by the person to whom such

income is deemed to have accrued.

(4) Where expenditure is incurred partly for the purpose of

producing assessable income and partly for purposes for which

no deduction is allowable, subsection (2) shall not be construed

to prevent the apportionment of such expenditure in such

manner as appears to the Comptroller to be reasonable.

38. DEDUCTIONS ALLOWABLE : SPECIFIC

(1) Subject to this Division and without prejudice to section 37(2),

save to the extent that any provision of this section imposes a

restriction on a deduction otherwise allowable, the deductions

allowable in ascertaining the assessable income of any person

for any year of income shall include—

(a) any allowances to which that person is entitled under

section 40 and Schedule 2 in respect of capital

expenditure;

46 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(b) any expenditure incurred by that person during the

income year on the repair of premises, plant and

machinery used by him or her in his or her business, or

the replacement of any implement, utensil or similar

article for which no allowance is given under Schedule 2;

year in respect of any claim, dispute or action at law

arising in the course, or by reason of, the ordinary

operations undertaken by him or her in the carrying on of

business;

(d) any annually assessed rate or taxes imposed on any

immovable property used by him or her for the purpose of

producing assessable income;

(e) any premiums incurred under a policy of insurance

against damage to or loss of property—

(i) where the property insured is used for the purpose

of producing assessable income, and

(ii) the policy is entered into with an insurance

company which carries on business in Saint Lucia

and is liable to include such premiums in its

assessable income;

(f) any premiums incurred under a policy of insurance

against loss of profits, however—

(i) such deduction shall not be allowed unless the

policy is entered into with an insurance company

which carries on business in Saint Lucia and is

liable to include such premiums in its assessable

income, and

(ii) where any policy against loss of profits arises under

a policy of insurance on the life of an employee,

including a director, a deduction shall only be

allowable where the Comptroller is satisfied that—

(A) any sum recoverable will constitute

assessable income under section 33;

(B) the insurance is intended to meet a loss of

profits arising from the loss of the employee‘s

services;

or permanent disablement of the employee, it

47Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

(g)

(h)

(i)

(j)

(k)

(l)

(m)

is a policy providing only for a sum to be

paid in the event of the death or permanent

disablement of the employee within a

specified number of years and while in the

employment of the employer;

the amount of any debts due to that person to the extent to

which they are bad and provided they have been brought

to account in the ascertainment of his or her assessable

income for any year of income;

such amount as the Comptroller considers reasonable in

respect of any debts due to that person which he or she

considers to be doubtful of recovery and provided they

have been brought to account in the ascertainment of his

or her assessable income for any year of income;

any expenditure incurred during the year of income by

way of interest on any loan made to that person, including

interest payable on debentures, to the extent to which the

Comptroller is satisfied that the amount of such loan was

used by that person for the purpose of producing

assessable income;

any amount contributed under the National Insurance

Corporation Act by that person in respect of persons

employed in his or her business;

any amount contributed by him or her in respect of his or

her employees by way of current annual contributions to

an approved pension fund;

such amount as is specified in subsection (2) in respect of

any contribution made by way of special payment to an

approved pension fund where such payment is made—

(i) in relation to a period of service by an employee

prior to the setting up of the approved pension fund,

(ii) to meet any actuarially ascertained insufficiency in

the resources of the approved pension fund to meet

its obligations to his or her employees;

any expenditure incurred by that person during the

income year by way of audit fees, accountancy fees or in

respect of the preparation of a return of income for the

purposes of this Act or the previous Act;

48 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

(n) any expenditure incurred by that person during the

income year by way of subscription or donation to a

professional association approved by the Comptroller

where he or she is satisfied that such body of persons is a

non-profit body established with the object of maintaining

and advancing the standards of such profession;

(o) an additional amount of 25% of the total salary paid

during the income year to each graduate employed, for a

maximum period of 3 years;

(p) all expenditure incurred as a result of incorporation costs

for the establishment of a new small scale business

enterprise;

(q) from income year 2001 up to and including income year

2003, expenses reasonably incurred by that person during

the income year in the purchasing and installation of a

new solar water heating system up to a limit of $6,500;

(r) from income year 2004, an allowance equal to 150% of

the actual expenditure incurred by a company which –

(i) promotes or sponsors a local or regional sporting

activity or event, sportsperson or team in respect of

such promotion or sponsorship up to a maximum of

$75,000; or

(ii) build, construct rehabilitate, or repair a sporting

facility up to a maximum of $250,000;

(s) from income year 2005, an additional amount of 25% of

the total salary paid during the income year to each

graduate of the National Skills Development Centre

employed with an employer who is certified by the

National Skills Development Centre, for a maximum

period of 3 years;

(t) from income year 2005, up to and including income year

2007, expenses incurred by that person during the income

year in the purchasing and installation of a new solar

water heating system up to a limit of $6,500.

(2) For the purpose of subsection (1)(p), the expenditure allowed

shall be fixed by the Minister in a notice to be published in the

Gazette.

49Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

(3) Where a special payment is made to an approved pension fund

to which subsection (1) applies such amount shall be allowed as

follows—

(a) where the special payment does not exceed the current

annual contribution it is to be wholly allowed for the year

of income for which payment is made;

(b) where the special payment exceeds the current annual

contribution, it is to be allowed in such years of income,

not exceeding 5 in number, as in the opinion of the

Comptroller is reasonable in the circumstances;

allowable over a number of years of income the first such

deduction is allowable for the year of income for which

the special payment is made.

(4) For the purposes of –

(a) subsection (l)(r) the deduction shall—

(i) apply to a sportsperson who belongs to a club

recognized by the Minister responsible for sports,

(ii) apply to a local team which is affiliated to a national

association or belongs to a club recognized by the

Minister responsible for sports, and

(iii) not be granted for the sponsorship of clubs

established by corporate bodies;

(b) paragraph (a) and subsection (l)(r)—

―club‖ means a formal structure—

(i) with a document which clearly sets out the rules,

regulations, accepted patterns of behaviour of its

members and the role of each member,

(ii) which follows a program over a sustained period of

time,

(iii) which exists not only for the fulfilment of

programmed activities but also for the social

development of its membership,

(iv) which shares similar social objectives with other

clubs on a regional level, and

(v) which demonstrates both formal and informal

relationships;

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Revision Date: 31 Dec 2008

―national association‖ means a nationally, regionally or

internationally recognized grouping of clubs or

organizations with similar interests;

―sponsor‖ means one who provides funds or equipment

for a broadcast, sporting activity or event;

―sporting activities or events‖ means athletics,

basketball, bridge, amateur boxing, martial arts,

cricket, squash, woule-la-ba, hockey, cycling, darts,

dominoes, football, rugby, golf, netball, swimming,

tennis, body building, yachting and such other

activities or events as determined by the Minister

responsible for sports, after consultations with the

Minister by order published in the Gazette;

―sporting facility‖ means playing field, playing court,

pavilion and any other amenity to serve such

facility;

―sportsperson‖ means an individual engaged in sporting

activities or events;

―team‖ means an informal unit, with a captain, vice

captain and coach, to manage its activities, which

comes together usually on a seasonal basis, for the

purpose of fulfilling a particular objective or a set of

objectives.

(Amended by Act 11 of 1998, 9 of 2001 and 7 of 2006)

39. RESTRICTIONS ON DEDUCTIONS: MANAGEMENT CHARGES AND CERTAIN PAYMENTS BY CONTROLLED COMPANIES TO SHAREHOLDER

(1) Despite section 37, where a person carrying on business in Saint

Lucia incurs expenditure by way of paragraph 1(1)(a) and

1(1)(b) of Schedule 3, or by way of head office expenses being

expenditure payable—

(a) to a non-resident (such non-resident not being engaged in

a business in Saint Lucia giving rise to such management

charges); or

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(b) by a branch of a non-resident company to its head office

or to some other branch outside Saint Lucia of such

company, a deduction shall be allowed of the lesser of—

(i) the aggregate of such charges, or

(ii) 10% of the deductions (exclusive of such charges)

allowable under section 37 (excluding cost of sales)

and the provisions of section 38(1) other than

section 39(1)(a), or such higher amount as in the

opinion of the Comptroller is reasonable.

(Amended by Act 7 of 2006)

(2) Despite section 37, in ascertaining the chargeable income of a

controlled company for any year of income, the Comptroller

may disallow any amount, otherwise deductible, which is paid

or payable to a shareholder or any associate of a shareholder by

way of—

(a) employment income; or

(b) interest on a loan by such person to the company,

and which in the opinion of the Comptroller is excessive in

amount, having regard to the duties performed or the rate of

interest payable on such loan.

(3) For the purposes of subsection (2)—

(a) ―a controlled company‖ means a resident company

which is owned and controlled by not more than 5

shareholders excluding the Government and any company

which is not itself a controlled company;

(b) ―an associate of a shareholder‖ means, in relation to a

shareholder, an individual who is—

(i) the spouse or the shareholder, or

(ii) a lineal ancestor, child or other lineal descendant,

brother, sister, uncle, aunt, nephew or niece of the

shareholder or of his or her spouse;

by not more than 5 shareholders where 5 or less

individual persons and any associates of such persons

(within the meaning of paragraph (b)) beneficially own

shares carrying between them, directly or indirectly—

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(i) the right to exercise more than 1 /2 of the voting

power in that company,

(ii) the right to receive more than 1 /2 of any dividends

that might be paid by that company, and

(iii) the right to receive more than 1 /2 of any capital

distribution in the event of the winding up or of a

reduction in the share capital of that company.

(4) Despite section 37, a deduction shall be allowed in respect of

expenditure incurred by a married person by way of

employment income within the meaning of section 34 to his or

her spouse as an employee or former employee, only to the

extent to which the Comptroller is satisfied that such

expenditure is reasonable in amount, and any amount which is

not allowed as a deduction by reason of this subsection shall be

deemed not to be employment income of the spouse to whom it

was paid.

(5) Subsection (4) applies to a partnership in respect of

employment income paid or payable to the spouse of one of the

partners and, despite section 21, any amount which is not

allowed as a deduction is chargeable income of such partner.

40. CAPITAL ALLOWANCE

(1) For the purpose of ascertaining the assessable income of any

person for any year of income there is allowed as a deduction

an initial allowance of 1 /5 as well as any amount to which that

person is entitled under Schedule 2 in respect of capital

expenditure incurred by him or her.

(2) For the purposes of ascertaining the assessable income of any

person who is carrying on a small scale business enterprise,

there is granted, in the initial year of income, an investment

[The next page is page 51]

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allowance of 10% on the capital expenditure incurred on the

provision of plant and machinery acquired and brought into use

by that person for the purpose of producing assessable income.

(3) For the purpose of this section capital expenditure relates to

plant and machinery imported into Saint Lucia for the first time

and is funded from non-local sources.

(Substituted by Act 11 of 1998)

41. DEDUCTION FOR LOSSES

(1) Subject to subsection (4), where deductions allowable to any

person for any year of income under the provisions of this

Division other than this section, exceed the assessable income

from the source to which these deductions relate, the amount of

such excess is allowed as a deduction against income accruing

from other sources of income for that year of income except

exempt income.

(2) Subject to subsection (4), where, after the allowance of any

deduction to which the person may be entitled under subsection

(1), an excess still remains, the amount of such excess (herein

referred to as ―the assessed loss‖) is allowed as a deduction in

ascertaining the assessable income of subsequent years of

income to the extent provided in subsection (3).

(3) The deduction provided in subsection (2) shall not exceed 1 /2 of

the assessable income of the next subsequent year of income

ascertained in accordance with this Part but before the operation

of subsection (2) (in this section referred to as ―the relevant

assessable income‖) and where the assessed loss exceeds 1 /2 of

the relevant assessable income or there is no such income of

such year of income, the excess or the amount of the assessed

loss, as the case may be, is to be carried forward and deducted

in like manner in ascertaining the assessable income of the next

following 5 years of income or until the assessed loss has been

fully allowed, whichever is the earlier.

(4) Where, for any year of income during the tax holiday period of

any person whose exemption relates to income accruing in

respect of—

(a) an hotel; or

(b) an enterprise approved under the Fiscal Incentives Act,

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the deductions which would have been allowable under the

provisions of this Act other than this section, exceed any

amount which would have been assessable income if that

person had not been exempt from tax, then the amount of such

excess shall be treated as an assessed loss allowable as a

deduction in succeeding years in the manner provided in

subsection (3) but, save as provided, no other loss incurred in

relation to the production of exempt income shall be allowed as

a deduction.

(5) Despite the provisions of this section, no deduction shall be

allowed in respect of any loss arising from the carrying on of

any business where, in the opinion of the Comptroller, such

business was not carried on on a commercial basis and with a

view to the realisation of gains or profits.

(6) For the purposes of subsections (2) and (3) an assessed loss is

considered to include a loss incurred under the corresponding

provision of the previous Act, and any losses brought forward

in respect of years of income prior to 1988 shall be treated in

like manner as if they were an assessed loss for the year of

income 1988.

41A. INTERPRETATION IN RESPECT OF SECTIONS 41B TO 41J

(1) For the purposes of sections 41B to 41J—

―capital allowances‖ means the allowances specified in section

40;

―claimant company‖ means a company which utilises the

trading loss of a surrendering company;

―current loss‖ means a trading loss incurred for the current

income year;

―51% subsidiary‖ means a body corporate of which—

(a) 51% or more of the ordinary share capital of that

body corporate is beneficially owned, whether

directly or indirectly by another body corporate; and

(b) 51% or more of the voting rights are attached to its

share capital;

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―surrendering company‖ means a company which suffers a

trading loss and surrenders this loss to another company

for the purposes of group relief;

―trading loss‖ means the assessed loss referred to in section 41

but does not include capital allowances and expenses

payable to a group member and claimed as a deduction if

corresponding amounts have not been included in the

income of the group member for the income year.

(2) Group relief is relief that allows the trading loss, excluding the

current loss, of a surrendering company to be set off, by way of

relief from tax, against the profits of a claimant company where

both companies satisfy the provisions of the group test set out

in subsections (3) and (4).

(3) Group relief is available where a surrendering company and a

claimant company are members of the same group.

(4) For the purposes of subsection (3) 2 companies are regarded as

being members of the same group where—

(a) one company is a 51% subsidiary of the other company;

(b) both companies are 51% subsidiaries of a third company.

(5) Every company engaged in group relief must be resident in

Saint Lucia.

(Inserted by Act 15 of 2003)

41B. DETERMINATION OF SUBSIDIARY COMPANY

(1) In determining, for the purposes of group relief, whether a

company is a 51% subsidiary of another, the other company

shall be treated as not being the owner—

(a) of any share capital which it owns directly in a body

corporate if a profit on a sale of the shares would be

treated as a trading receipt of its trade;

(b) of any share capital which it owns indirectly and which is

owned by a body corporate for which a profit on the sale

of the shares would be a trading receipt; or

a body corporate not resident in Saint Lucia.

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(2) Despite that any time a company is a 51% subsidiary of another

company the former company shall not be treated at that time as

such a subsidiary with respect to group relief unless,

additionally at that time—

(a) the parent company is beneficially entitled to not less than

51% of any profits available for distribution to equity

holders of the subsidiary company; and

(b) the parent company would be beneficially entitled to not

less than 51% of any assets of the subsidiary company

available for distribution to its equity holders on a

winding-up.

(Inserted by Act 15 of 2003)

41C. CLAIM FOR GROUP RELIEF

(1) A claim for group relief shall specify the following—

(a) the name of the claimant company;

(b) a schedule of any available trading losses claimed by the

claimant company;

(d) a schedule of any available trading losses relinquished by

the surrendering company; and

(e) the amount claimed in respect of the surrendering

company.

(2) A claim for group relief—

(a) shall not be allowed unless the profits of the claimant

company are first applied against any previous years‘

assessed losses of that company;

(b) shall not exceed ½ of the assessable income of the

claimant company and where the trading loss exceeds ½

of the assessable income or where there is no such income

of such year of income, the excess or the amount of the

trading loss, as the case may be, shall be carried forward

and deducted in like manner in ascertaining the assessable

income of the next following 5 years of income or until

the trading loss has been fully allowed, whichever is the

earlier;

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which shall be submitted to the Comptroller in the form

prescribed by the Comptroller;

(d) must be made within 2 years of the date of the end of the

surrendering company‘s income year to which the claim

relates; and

(e) shall only be allowed by the Comptroller after all taxes

due and payable under any other Act under the

administration or management of the Inland Revenue

Department, have been satisfied by both the claimant

company and the surrendering company.

(3) Group relief claim shall apply only in the case of a company

that is part of a group restructuring or reorganization approved

by the Comptroller.

(4) Subject to this section, the assessed losses carried forward by

the companies taking part in the group restructuring or

reorganization shall be available for utilization for purposes of a

claim for group relief except that the assessed losses carried

forward shall expire in accordance with the provisions of

section 41(3).

(Inserted by Act 15 of 2003)

41D. COMPANIES JOINING GROUP

(1) Despite the provisions of section 41C, the assessed losses

carried forward by a company joining a group after

restructuring or reorganization shall not be available for

utilization by the companies in the existing group for purposes

of claiming group relief.

(2) Despite the provisions of section 41C, the trading losses carried

forward by the group, shall not be available for utilization by a

company joining the group after restructuring or reorganization

for a period of 2 years after joining.

(Inserted by Act 15 of 2003)

41E. RELIEF OBTAINABLE ONCE FOR THE SAME AMOUNT

Relief shall not be given more than once in respect of the same

amount, whether by giving group relief or by giving some other

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relief, in any income year, to the surrendering company, or by giving

group relief more than once. (Inserted by Act 15 of 2003)

41F. AGGREGATE OF CLAIM

(1) Subject to subsection (2), 2 or more claimant companies may

make claims relating to the same surrendering company.

(2) Despite subsection (1) where the claimant companies referred

to in subsection (1) make claims, the aggregate of the claims

shall not exceed the amount of the loss surrendered by the

surrendering company.

(Inserted by Act 15 of 2003)

41G. CAPITAL ALLOWANCES

A claimant company shall only be eligible to claim group relief where

that company, has first claimed all its capital allowances in

accordance with the provisions of section 40. (Inserted by Act 15 of

2003)

41H. TAX RECOVERY

Subject to section 90, where the Comptroller discovers that any group

relief which has been given is or has become excessive, he or she may

make an assessment to tax in the amount which ought in his or her

opinion to be charged.

(Inserted by Act 15 of 2003)

41I. EXEMPT COMPANIES

Group relief is not available to—

(a) any company established under the International Business

Companies Act or any enactment replacing it;

(b) any other company which has been granted tax concessions

under any other enactment with the exception of companies

operating under the Tourism Incentive Act.

(Inserted by Act 15 of 2003)

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41J. PROFITS AND LOSSES AND DISTRIBUTION OR CHARGE ON INCOME VIS-A-VIS GROUP RELIEF

(1) A payment for group relief—

(a) shall not be taken into account in computing profits or

losses of either company for tax purposes; and

(b) shall not for the purposes of the Income Tax Act be

regarded as a distribution or charge on income.

(2) In subsection (1) a ―payment for group relief‖ means a

payment made by the claimant company to the surrendering

company under an agreement between them as respects an

account surrendered by way of group relief, being payment not

exceeding that amount.

(Inserted by Act 15 of 2003)

41K. EXEMPTION FROM STAMP DUTY

Despite anything to the contrary in the Stamp Duty Act, any

instrument relating in any way to the assets or activities of a company

taking part in a group restructuring or reorganization approved by the

Comptroller, is exempt from the payment of stamp duty.

(Inserted by Act 15 of 2003)

42. DEDUCTIONS NOT ALLOWABLE UNDER MORE THAN ONE PROVISION

(1) No amount shall be deducted under any provision of this Act in

respect of expenditure, or claim for an allowance, which has

been or will be taken into account as a deduction or in

calculating a deduction under any other provision of this Act or

the previous Act.

(2) Where an amount qualifies for deduction under 2 or more

provisions of this Act, subsection (1) does not prevent the

person concerned claiming such of those deductions as is most

advantageous to him or her.

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43. EXPENDITURE FOR WHICH NO DEDUCTION ALLOWABLE

(1) Subject to any express provision in this Act authorising a

specified deduction, in ascertaining the assessable income of

any person for any year of income no deduction is allowed in

respect of—

(a) any expenditure to the extent to which it is not incurred

for the purpose of producing assessable income;

(b) any expenditure incurred for domestic or private purposes

including inter alia—

(i) the cost of travelling between residence and place of

business,

(ii) the rent of any dwelling house or domestic offices

or any part thereof as is not used in connection with

the carrying on by him or her of his or her trade,

business, profession or vocation,

(iii) any remuneration, or interest on capital, paid or

credited to himself or herself,

(iv) the cost price of any goods taken out of the business

for the use of the proprietor or any partner or their

families;

exempt income;

(d) any capital withdrawn or any expenditure or loss of a

capital nature;

(e) any tax imposed under this Act or any previous enactment

relating to tax imposed on income;

(f) any income tax or tax of a similar nature charged in a

country outside Saint Lucia; or

(g) any contribution made to a pension fund which has not

been approved under this Act.

(2) Notwithstanding sections 37 and 38, in ascertaining the

chargeable income of any person for any year of income, no

deduction shall be allowed in respect of any amount paid or

payable to a—

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(a) person to whom sections 77 and 78 applies; or

(b) non-resident to which section 76 applies,

unless the Comptroller is satisfied that the tax chargeable

thereon has been paid.

[Amended by Act 7 of 2006]

PART 6 ASCERTAINMENT OF CHARGEABLE INCOME : DEDUCTIONS

AND ALLOWANCES

44. CONCESSIONAL DEDUCTIONS: GENERAL

(1) In ascertaining the chargeable income for any year of income of

any person there is allowed as a deduction from his or her

assessable income, upon due claim and subject to such evidence

as the Comptroller may require, any amount to which he or she

is entitled under this Part.

(2) Where a person is not entitled to any deductions under this Part,

his or her assessable income constitutes his or her chargeable

income.

(3) The deductions allowable under this Part is allowed after any

deductions to which he or she is entitled under Division 2 of

Part 5 and in the event of there being an insufficiency of

assessable income to permit the allowance in full of any

deductions under this Part then such concessional deductions

shall be limited to the amount of the assessable income, if any,

which remains.

45. PERSONAL ALLOWANCE TO INDIVIDUALS

A resident individual shall be entitled irrespective of the nature of his

or her income, to the allowance specified in Schedule 6 for an income

year.

46. ALLOWANCE FOR SPOUSE

(1) Subject to section 13 a resident individual is entitled to an

allowance of $1,500 in respect of his or her spouse if, at any

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Revision Date: 31 Dec 2008

time during the year of income the spouse is living with him or

her or is maintained by and not separated from him or her in

circumstances in which he or she is entitled to a deduction

under section 47.

(2) The deduction allowable under this section is reduced where the

spouse has assessable income in excess of $1,500 by $1 for

each dollar of the excess.

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55Laws of Saint Lucia Income Tax Act Cap.15.02

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47. DEDUCTION FOR MAINTENANCE OR ALIMONY

(1) Subject to subsection (2), a resident individual who, in the year

of income has paid—

(a) a maintenance or separation allowance (under a deed of

separation or an order of court) to his or her spouse from

whom he or she is separated; or

(b) alimony, to a former spouse from whom he or she is

divorced,

is entitled to a deduction equal to the amount of such allowance

or alimony.

(2) The deduction allowable under subsection (1) shall not apply

unless the person receiving such allowance or alimony is

chargeable to tax thereon under this Act.

48. DEDUCTION FOR MAINTENANCE OF CHILDREN

(1) Subject to this section in ascertaining the chargeable income of

an individual who is resident in Saint Lucia and who proves to

the satisfaction of the Comptroller that he or she maintained a

child who—

(a) was born during the income year; or

(b) at the commencement of the income year has not attained

the age of 16 years or, irrespective of age, was a student

child or an invalid child,

is entitled to a deduction of $1,000.

(2) The deduction allowable under this section does not apply in

relation to any child whose income from any source during the

income year exceeds $1,000.

(3) Where 2 or more individuals contribute towards the

maintenance of a child to whom this section applies the

deduction allowable may be apportioned between the

individuals in the manner that appears to the Comptroller to be

reasonable.

(4) In this section—

―invalid child‖ means a child of the individual claiming the

deduction provided by this section who is by reason of

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Revision Date: 31 Dec 2008

permanent disability dependent upon his or her parent for

his or her maintenance.

―student child‖ means a child who, at any time during the

income year, was—

(a) receiving full time education at a school, college or

other educational institution but not including a

university or other institution providing technical or

professional education or a standard equivalent to a

university; or

(b) serving full time as an apprentice or under articles

or with a view to qualifying in a trade or profession;

49. DEDUCTION FOR EDUCATION OF CERTAIN CHILDREN

(1) Subject to this section, in ascertaining the chargeable income of

an individual who is resident in Saint Lucia and who, during the

income year, maintained a child who, during the income year—

(a) had attained the age of 10 years; and

(b) was a student child within the meaning of section 48(4),

whether in Saint Lucia or elsewhere,

is entitled to a deduction in respect of the education or training

of that child.

(2) The deduction allowable under this section is $2,000 in respect

of any one child.

(3) Where 2 or more individuals contribute towards the

maintenance of a child to whom this section applies the

deduction allowable may be apportioned between the

individuals in such manner as appears to the Comptroller to be

reasonable.

(4) Where a deduction is allowable under this section no deduction

shall be allowed in respect of the same child under section 48.

(Amended by Act 18 of 1990)

50. DEDUCTION FOR HIGHER EDUCATION

(1) Subject to this section, in ascertaining the chargeable income of

an individual who is resident in Saint Lucia and who, is a

relative of a person whom he or she maintained during the

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Revision Date: 31 Dec 2008

income year shall, if that person irrespective of age, was a

university student, whether in Saint Lucia or elsewhere, during

that income year, be entitled to a deduction in respect of

education of such university student.

(2) The deduction allowable under this section is $5,000 in respect

of any one person.

(3) Where a deduction is allowable under this section no deduction

is allowed in respect of the same person under section 48.

(4) Where 2 or more individuals contribute towards the

maintenance of a person to whom this section applies the

deduction allowable may be apportioned between the

individuals in such manner as appears to the Comptroller to be

reasonable.

(5) In this section—

―relative‖ means a parent, grandparent, brother, sister, uncle or

aunt and includes a person in loco parentis;

―university student‖ means a person receiving full time

education at a university or at any other institution

providing technical or professional education of a

standard equivalent to university education.

(Amended by Act 18 of 1990)

51. ALLOWANCE FOR HOUSEKEEPER

(1) Subject to this section, where a resident individual being a

widower or widow or unmarried, divorced or separated

maintains a relative who, during the year of income, resided

with him or her—

(a) for the purpose of having the charge and care of any child

of his or hers within the meaning of section 48; or

(b) in the capacity of housekeeper,

that individual is entitled to an allowance of $200.

(2) The deduction allowable under subsection (1) is granted only—

(a) in respect of one person for any year of income, and

(b) where no deduction is allowed to any other person in

respect of the maintenance of such person.

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(3) Where a deduction is allowable under subsection (1) no

deduction is allowed in respect of the same person under

section 52.

52. ALLOWANCE FOR DEPENDENT RELATIVE

(1) Subject to this section, where a resident individual during the

year of income maintains a dependent relative he or she is

entitled to an allowance of $350, in respect of each such

relative.

(2) The deduction allowable under this section—

(a) does not apply in relation to any child in respect of whom

a deduction is allowed under sections 48, 49, or 50; and

(b) shall be reduced, where such dependent relative has

assessable income in excess of $350, by $1 for each dollar

of the excess.

(3) Where 2 or more individuals are entitled to relief under

subsection (1) the deduction allowable may be apportioned

between such individuals in such manner as appears to the

Comptroller to be reasonable.

(4) In this section—

―dependent relative‖ means, in relation to an individual, a

person who—

(a) whether incapacitated or not is the parent or other

lineal ancestor or aunt or uncle of that individual or

of his or her spouse and is unmarried, divorced,

widowed or separated; or

(b) is incapacitated by old age or infirmity or is

unemployable by reason of old age and is the child,

brother or sister of that individual or of his or her

spouse.

53. DEDUCTION FOR CONTRIBUTIONS TO LIFE ASSURANCE, OR OTHER RETIREMENT BENEFITS

(1) Subject to this section, where in any year of income a resident

individual makes payments for the future benefit of himself or

herself, his or her spouse, children or other dependents—

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(a) as premiums for insurance on his or her life or the life of

his or her spouse or child, or contracts for a deferred

annuity on his or her life or the life of his or her spouse or

child with an insurance company registered under the

Insurance Act; or

(b) as contributions under the National Insurance Corporation

Act,

he or she is entitled to a deduction in respect of the amount of

such expenditure subject to the limits imposed by subsection

(2).

(2) The deduction allowable under this section shall not exceed the

lower of—

(a) 1 /10 of his or her assessable income; or

(b) $8,000.

(3) A deduction is not allowable under subsection (1)(a) in respect

of any premium paid under a policy of insurance effected after

1 January 1972, unless—

(a) the policy is entered into with a company registered and

carrying on business in Saint Lucia; or

(b) the policy is effected at a time when the person is not

resident in Saint Lucia.

(4) Where the deduction claimed under subsection 1(a) is in respect

of premium paid under a policy of an insurance effected after

January 1972 with a company not doing business in Saint

Lucia, the amount allowable as a deduction is 50% of the

premium paid to the company. However, the deduction is

limited to the higher of—

(a) 1 /20 of the assessable income of the individual; or

(b) $3,000.

(5) Where a policy of insurance to which this section applies is

surrendered within 10 years from the date on which it was

effected the amount of the benefits paid is not from chargeable

income but is to be separately charged to tax in the hands of the

insurer who shall—

(a) deduct as tax, 10% of such monies prior to payment of the

balance to the insuree;

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(b) pay such tax to the Comptroller, within 15 days after the

end of the month in which it was deducted; and

tax is made, a statement setting out—

(i) the names of all policy holders to whom payments

were made,

(ii) the amounts of such payments, and

(iii) the tax deducted.

(6) For the purposes of this section, a policy of insurance

includes—

(a) a policy providing lump sum benefits; and

(b) a policy providing for periodical benefits, upon maturity,

but in either case, a deduction under this section is only

allowable where the policy is expressed to mature not

earlier than 10 years from the date it was effected or on

death prior to maturity.

(Amended by Act 18 of 1990)

54. DEDUCTION FOR MORTGAGE INTEREST, RATES AND INSURANCE ON OWNER OCCUPIED PROPERTY

(1) A resident individual is entitled to a deduction in respect of any

amount paid during the year of income by way of—

(a) interest upon money borrowed by him or her and applied

for the acquisition or construction of or improvements to

an owner occupied dwelling house; however, the

deduction allowable for any year of income in respect of

such expenditure shall not exceed $15,000;

(b) taxes incurred in respect of an owner occupied dwelling

house;

house; or

(d) expenses reasonably incurred in the upkeep and

maintenance of an owner occupied dwelling house.

(2) Despite subsection (1), a resident individual who—

(a) subject to paragraph (b), satisfies the Comptroller that he

or she has paid any sum to which subsection (1) applies,

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during the year of income, is entitled to the deduction

under subsection (1);

(b) has failed to pay any amount payable to which subsection

(1)(b) relates, is not entitled to the deduction to which

subsection (1)(a) relates.

(3) Where 2 or more persons are entitled to relief under this section

the deduction allowable may be apportioned between them in

the manner that appears to the Comptroller to be reasonable.

(4) In this section ―an owner occupied‖ dwelling house means a

dwelling house occupied by the owner either alone or together

with his or her family, or occupied rent-free by members of his

or her family.

(Amended by Act 9 of 2001)

55. DEDUCTION FOR GIFTS FOR CERTAIN APPROVED PURPOSES

In ascertaining the chargeable income of any person for any year of

income, where, in that year of income, such person makes a

contribution—

(a) under a deed of covenant for a period of not less than 3

years, to any religious, charitable, medical, or educational

institution or sporting body or fund of a public character,

approved by Cabinet;

(b) to the Saint Lucia National Trust,

there is allowed a deduction of the amount of such contribution.

However, the deduction in respect of such contributions shall not

exceed 25% of the assessable income of the person for that year of

income.

56. DEDUCTION FOR MEDICAL EXPENSES

(1) In ascertaining the chargeable income of an individual who is

resident in Saint Lucia there is allowed a deduction in respect of

medical expenses of the individual during the income year on

behalf of himself or herself or on behalf of a dependent in

respect of whom he or she is entitled to a deduction under

sections 45, 46, 48, 49, 50 or 51.

Except that no deduction is allowed under this subsection in

excess of $400 unless the individual produces documentary

62 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

evidence to the satisfaction of the Comptroller in support of a

claim for a deduction in excess of $400.

(2) In ascertaining the medical expenses for which a deduction is

allowable under this section there is to be deducted any amount

which he or she or his or her dependent is reimbursed or is

entitled to be reimbursed whether under an insurance contract

or otherwise.

(3) For the purposes of this section—

―medical expenses‖ means amounts paid—

(a) to a registered medical practitioner, a qualified

nurse or a midwife, a chemist or to a hospital or

other similar institution for services rendered,

facilities provided or medicines prescribed by a

registered medical practitioner for the treatment of

any illness or in connection with the birth of a child;

(b) to a qualified dentist for dental services rendered or

services rendered in the supply or repair of artificial

teeth or to a dental technician for such of those

services as he or she is qualified to perform;

of a registered medical practitioner;

(d) in respect of an artificial limb or part thereof, an

artificial eye or a hearing aid;

(e) in respect of a medical or a surgical appliance

prescribed by a registered medical practitioner;

(f) for the testing of eyes or the prescribing of

spectacles or contact lenses by a person qualified to

perform those services and for spectacles or contact

lenses purchased as a result of such prescription;

(g) to a person for services rendered by him or her as an

attendant of a person who is blind or permanently

incapacitated by infirmity; or

(h) as premiums on an insurance contract under which

amounts are payable by the insurer in respect of

medical expenses within the meaning of paragraphs

(a) to (g) of this definition;

―insurance contract‖ means a contract between—

(a) an insurer and an individual; or

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(b) an insurer and an employer in respect of his or her

employees,

which provides for the payment of amounts in respect of

medical expenses or benefits.

57. DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE OR BUILDING SOCIETY

(1) Subject to this section, where in any year of income a resident

individual makes payments by way of subscription for shares in

any society registered under the Co-operative Societies Act or

incorporated under the Building Societies Act there is allowed a

deduction for such payments up to a limit of $5,000.

(Amended by Act 14 of 20034)

(2) Where a deduction has been allowed under this section and the

shares to which such deduction relates are disposed of within 5

years from the date of subscription therefor, the person shall

cease to be entitled to the deductions previously granted and the

Comptroller shall amend the assessment of the relevant year

accordingly.

(3) For the purposes of this section where shares are disposed of

within 5 years of the date of subscription—

(a) every individual to whom a deduction has been granted

shall inform the Comptroller of such disposal within one

month of the date of disposal; and

(b) every co-operative society and building society shall

furnish to the Comptroller at the end of each quarter a list

of such disposals showing—

(i) the name and address of the former owner,

(ii) the number of shares disposed of,

(iii) the dates of acquisition and disposal.

58. DEDUCTION FOR INTEREST ON STUDENT LOAN

Subject to this Act, a resident individual is entitled to a deduction of a

maximum of $3,000 in respect of any amount paid during the year of

4 Act 14 of 2003 applies in respect of income year 2002. See section 2 of Act 14 of 2003.

64 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

income by way of interest on money borrowed by him or her to

finance his or her tertiary education.

(Inserted by Act 12 of 1999)

59. DEDUCTIONS FOR PURCHASE OF NEW SHARES IN A RESIDENT PUBLIC COMPANY

(1) Subject to this section, where in any year of income, a resident

individual purchases new shares issued by a resident public

company there shall be allowed a deduction for such purchase

up to a limit of $5,000.

(2) Where a deduction has been allowed under this section, the

provisions of section 57(2) and (3) shall apply with the

necessary modifications.

(Inserted by Act 9 of 2001)

PART 7 SPECIAL PROVISIONS RELATING TO CERTAIN TAXPAYERS

Division 1 – Variation of Normal Bases of Taxation

60. INTERNATIONAL AGREEMENT FOR THE AVOIDANCE OF DOUBLE TAXATION

(1) Despite any other provisions of this Act the Minister may enter

into an agreement with the Government of any other country

with a view to—

(a) the provision of relief by way of the prevention,

mitigation or discontinuance of the levying of tax under

this Act or the income tax laws of that other country, or

otherwise for the avoidance of double taxation;

(b) determining the assessable income to be attributed to any

agency, branch or other permanent establishment in Saint

Lucia, of a resident of that other country or to any agency,

branch or other permanent establishment in that country,

of a resident of Saint Lucia;

resident who enters into trading arrangements with a

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Revision Date: 31 Dec 2008

resident of that other country with whom he or she is not

dealing at arm‘s length;

(d) determining the situation of the source of any assessable

income derived by a resident of Saint Lucia or that other

country; or

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(e) the rendering of reciprocal assistance to facilitate the

administration of this Act and the income tax laws of that

other country and any agreement for the avoidance of

double taxation or the exchange of information.

(2) The Minister may, at any time, amend or cancel any agreement

entered into under subsection (1).

(3) Any agreement entered into under subsection (1) or amendment

or cancellation under subsection (2) shall be published by order

in the Gazette.

61. GENERAL INSURANCE COMPANIES AND ASSOCIATIONS OF UNDERWRITERS

(1) Subject to subsection (2), the chargeable income for any year of

income of any company carrying on a business of insurance

other than life assurance (hereinafter referred to as ―general

insurance‖) is to be ascertained in accordance with Parts 5 and

(2) To the balance so ascertained there is to be added a reserve for

unexpired risks outstanding at the beginning of the income year

and from the balance so ascertained there is to be deducted—

(a) a reserve for unexpired risks outstanding at the end of the

income year; and

(b) where the company is a non-resident, but subject to

section 39(1), such proportion of the expenses of the head

office as is attributable to the general insurance business

carried on in Saint Lucia.

(3) The reserve for unexpired risks at the beginning and end of the

income year, referred to in subsection (2) shall be such

percentage as is adopted by the company in relation to its

operations as a whole for such risks at such times.

(4) The chargeable income for any year of income of an association

of underwriters, within the meaning of that term as defined in

section 2 of the Insurance Act is considered to be an amount

equal to 10% of the gross premium arising in Saint Lucia during

that year of income.

(5) For the purposes of subsection (4)—

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―gross premium‖ means the aggregate of all premiums

collected by or behalf of an association of underwriters

from insured persons and includes premiums paid by an

insurer to a reinsurer or premium received by an

association of underwriters for reinsurance business.

(6) For the purpose of the charge to tax an association of

underwriters is considered to be an individual.

62. LIFE ASSURANCE COMPANIES

(1) The chargeable income for any year of income of any company

carrying on a business of life assurance is considered to be an

amount equal to 10% of the gross investment income accruing

in Saint Lucia to that company during that year of income.

(2) For the purposes of subsection (1)—

(a) ―the gross investment income accruing in Saint Lucia‖

is considered to be an amount equal to such part of the

total investment income of the company as the premiums

paid in Saint Lucia bear to the total premiums paid;

(b) ―the total investment income‖ means the aggregate of

the investment income accruing in Saint Lucia and

elsewhere including income which would in the hands of

any other person be exempt;

gross investment income accruing in Saint Lucia

(ascertained under paragraph (a)) in respect of any

investment income accruing in Saint Lucia which would

in the hands of any other person be exempt under section

25;

(d) a deduction or tax credit shall not be given against the

gross investment income accruing in Saint Lucia

(ascertained under paragraph (a)) in respect of tax on

premium tax levied in Saint Lucia which would in the

hands of any other person be exempt under section 25.

(3) In this section ―investment income‖ means the income

accruing to a company from the investment of premium moneys

paid to the company in respect of ordinary life assurance

(including non-cancellable group life assurance), industrial life

assurance and general annuity life insurance.

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63. APPROVED PENSION FUNDS

(1) For the purposes of this Act, the Comptroller may approve a

fund established for the provision of retirement benefits for

employees and their dependents as an approved pension fund in

accordance with this section.

(2) The primary object of an approved pension fund is the

provision of benefits by way of a pension—

(a) to its members upon retirement;

(b) to the spouse or child of a member upon his or her death,

but any such fund may also make provision for other benefits

not inconsistent with this object.

(3) The Comptroller shall not approve a pension fund where—

(a) subject to subsections (5) and (8), the benefit provided on

retirement or death is a lump sum;

(b) where eligibility for membership in respect of members in

permanent employment is not available to employees

generally or to a class of employees generally; or

except as provided in section 64.

(4) The Comptroller shall not approve a pension fund unless

satisfied that it provides—

(a) for a pension to be payable—

(i) on retirement of the member at his or her retirement

date, which shall not be prior to his or her attaining

50 years of age,

(ii) on retirement of the member prior to his or her

retirement date where he or she retires prematurely

as a result of mental or physical infirmity, or

(iii) on death of the member while still in employment,

except where alternative provision is made for a

death benefit to be payable in accordance with

subsection (5);

(b) that any pension provided is payable in equal amounts

(whether annually or at lesser periodic intervals) to—

(i) the member for his or her life,

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(ii) the spouse of a deceased member, until his or her

death or remarriage or for a guaranteed term of

years,

(iii) any child of the member until the child attains an

age of not less than 16 years;

exceed 70% of the maximum salary earned by him or her

during any 12 month period of membership;

(d) that the maximum pension payable to the spouse and

children of a deceased member does not exceed 75% of

the pension payable to the member at his or her death, or

where death occurred prior to his or her retirement would

have been payable to him or her had he or she retired on

the date of his or her death;

(e) that contributions by a member cease upon his or her

retirement, death or withdrawal from the fund;

(f) that the annual contribution by the employer in relation to

every calendar year is not less than the total contribution

paid by all the members in relation to that year, except

where the Comptroller is satisfied upon certification by an

actuary that a lesser contribution is necessary to maintain

the solvency of the fund;

(g) that no pension payable thereunder is capable of being

surrendered, commuted or assigned either wholly or in

part, except to the extent permitted by subsection (8);

(h) that no benefit is payable to or in respect of a member

prior to his or her retirement or death, except to the extent

permitted by subsections (11) or (12);

(i) for the constitution of the fund by a trust under which the

property of the fund is irrevocably vested in—

(i) not less than 3 persons, where the trustees are

individuals, or

(ii) a trust corporation.

(5) A pension fund may provide that, in lieu of widow‘s pension

being payable in the event of the death of a member prior to

retirement, a death benefit be payable equal to the aggregate of

the joint contributions of the member and the employer together

with compound interest thereon up to the date of his or her

death.

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(6) Where under subsection (5) death benefits are payable in the

event of the death of a member prior to his or her retirement, he

or she may elect that such benefits be payable to his or her

estate or any nominated beneficiary.

(7) A pension fund may provide for contributions to be made only

by the employer, but no such fund shall be approved which

provides for contributions to be made only by the members.

(8) A pension fund may provide for the commutation of pension

benefits to the following extent—

(a) where the annual amount payable does not exceed $1,200,

the full amount of the pension may be commuted;

(b) in any other case, the greater of $1,200 or 25% of the

pension may be commuted.

(9) Where any pension benefits are commuted, the trustees of an

approved pension fund shall notify the comptroller of any

commutation.

(10) The trustees of an approved pension fund shall not invest, lend

or use the assets of the fund in any investment which is not

authorised by law or by the instrument creating the fund.

(11) Despite subsection (4)(c) and (4)(d) (which provide maximum

limits in relation to pension entitlements) a pension fund may

provide for increases in pensions to be payable to existing

pensioners by reason of increased cost of living.

(12) A pension fund may provide for withdrawal from membership

prior to resignation or death, but in any such case the rules of

the fund shall provide that the maximum benefits to be paid to

the member shall not exceed—

(a) where membership of the employee does not exceed 5

years, a cash payment equal to, or a paid up deferred

pension determined by reference to, the employee‘s own

contributions together with compound interest thereon up

to date of withdrawal;

(b) where membership of the employee exceeds 5 years a

paid up deferred pension determined by reference to the

aggregate of the joint contributions of the member and the

employer together with compound interest thereon up to

the date of withdrawal,

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or alternatively may provide for the transfer of such benefits to

another approved pension fund.

(13) Despite subsection (12)(b) the rules of a pension fund may

provide for the payment of a cash sum in lieu of a paid up

deferred pension in the following circumstances—

(a) where the member is a married woman or an unmarried

woman who is about to marry;

(b) where the member intends, upon withdrawal, to leave

Saint Lucia permanently; or

circumstances exist.

(14) Where cash benefits are payable to a member under subsection

(12) or (13) upon withdrawal from a pension fund such moneys

shall not form part of the chargeable income of the member but

shall be separately charged to tax in the hands of the trustees

who shall deduct, as tax, 10% of the moneys prior to payment

of the balance to the member.

(15) The tax deducted by the trustees under subsection (14) shall be

paid to the Comptroller within 15 days after the end of the

month in which it was deducted and shall be accompanied by a

statement setting out the names of all members to whom

payments have been made, the amounts of such payments and

the tax deducted therefrom.

(16) Where an approved pension fund is vested in—

(a) individuals, at least one trustee is to be a representative of

the employees, selected by them;

(b) a trust corporation, a management committee is to be

established comprising not less than 3 individuals, at least

one of whom shall be a representative of the employees,

selected by them.

(17) An employer shall not be a trustee of any pension fund

established under this section, but nothing herein is to be

constructed as preventing an employer from appointing a

representative either as a trustee or a member of the

management committee as the case may be.

(18) Despite subsection (1), where a fund or scheme has been

approved for the purposes of section 14 of the previous Act

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Revision Date: 31 Dec 2008

prior to the commencement of this Act, such fund or scheme is

considered to have been approved under this section.

64. DEDUCTIONS DEPENDENT ON PLACE WHERE FUND ESTABLISHED

(1) Where any pension fund has been approved by the Comptroller

under the provisions of the preceding section, or deemed to be

approved for purposes of section 14 of the previous Act as

provided by subsection (18) of the preceding section the

deduction allowable is as follows—

(a) where the pension fund is constituted or established in

Saint Lucia, the whole of the contribution in respect of

year of income 1988 and thereafter;

(b) where the pension fund is not constituted or established in

Saint Lucia and participation in such fund commenced

before year 1988, 50% of the contribution in respect of

year of income 1988 and thereafter;

Lucia and participation commences in the year of income

1988 or after, no deduction is allowed.

(2) In this section and the preceding section—

―contribution‖ means the payment made to the pension fund

by either the member or the employer;

―employer‖ in the case of incorporated companies, includes a

group of companies;

―member‖ means any person employed in the service of

another at a weekly, monthly or other periodic

remuneration, but does not include a director of an

incorporated company who is not actively engaged in the

day to day management of the company;

―retirement date‖ means the date upon which an employee

reaches an age at which in accordance with the customary

practice of his or her employer, he or she may optionally,

or must compulsorily, retire but not being an age less than

50 years.

(Amended by Act 9 of 2001)

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65. INTERPRETATION OF THIS PART

In this Part, the expression—

(a) ―annuitant‖ means an individual to whom, under an

annuity contract, any annuity for life is agreed to be paid

or provided;

(b) ―annuity contract‖ means a contract between an

individual and a person authorised to carry on in Saint

Lucia the business of granting annuities on human life

under the terms of which an annuity for life is agreed to

be paid or provided;

receipt of income derived from a business carried on by

him or her as an individual, or in the case of a partnership,

as a partner personally acting therein;

(d) ―maturity‖ means the date fixed under an annuity

contract for the commencement of any annuity, the

payment of which is provided for by the contract;

(e) ―premium‖ means any periodic amount paid or payable

as consideration under an annuity contract; and

(f) ―retirement age‖ has the same meaning as given in

section 63(4)(a)(i) of the principal Act.

(Inserted by Act 12 of 1999)

66. APPLICATIONS FOR REGISTRATION

Application for the registration of an annuity contract as a registered

retirement plan shall be made to the Comptroller in writing by one of

the parties to the contract and shall be accompanied by a copy of the

contract and such other information as the Comptroller may require.

(Inserted by Act 12 of 1999)

67. CONDITIONS SUBJECT TO WHICH REGISTRATION MAY BE GRANTED

Registration of an annuity contract as a registered retirement plan

shall not be granted unless it is shown to the satisfaction of the

Comptroller that—

(a) the premiums under the annuity contract are to be paid by

the annuitant; and

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(b) subject to section 69, the annuity contract does not—

(i) provide for the payment during the life of the

annuitant of any sum, other than a premium, except

sums payable by way of annuity to the annuitant or

to a widow or widower of the annuitant,

(ii) provide for the annuity payable to the annuitant to

commence before retirement or maturity,

(iii) provide for the payment by the persons carrying on

the business of granting annuities of any other sums

except sums payable by way of annuity to the

annuitant‘s widow or widower and any sums which,

in the event of no annuity becoming payable either

to the annuitants or to the annuitant‘s legal

representatives by way of return of premiums or of

reasonable interest on such premiums or of bonuses

out of profits,

(iv) provide for the annuity, if any, payable to the

widow or widower of the annuitant to be of a

greater annual amount than that paid or payable to

the annuitant, or

(v) provide for the payment of an annuity otherwise

than for the life of the annuitant or of the widow or

widower of the annuitant; and

no annuity payable under it shall be capable, either in whole

or in part, of surrender, commutation or assignment.

(Inserted by Act 12 of 1999)

68. PERMITTED PROVISIONS IN ANNUITY CONTRACTS

The Comptroller may register an annuity contract as a registered

retirement plan, which otherwise satisfies the conditions of section

68, although the annuity contract—

(a) provides for the payment, after the annuitant‘s death, of

an annuity to a dependant who is not the widow or

widower of the annuitant;

(b) provides for the payment to the annuitant of an annuity

commencing before retirement or maturity if the annuity

is payable on his or her becoming incapable, through

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infirmity of mind or body, of carrying on his or her own

profession, vocation, trade or business of a similar nature

for which he or she is trained or fitted;

annuity to any person for a term certain, not exceeding 10

years, despite his or her death within that term, or for the

termination or suspension on marriage or remarriage or in

other circumstances, of the payment to any person of the

annuity; or

(d) in the case of an annuity which is to continue for a term

certain, provides for the annuity to be assignable by will, or

in the event of the death of any person to whom such

annuity is payable, to be assignable by the legal

representatives of such person in the distribution of his or

her estate so as to give effect to a testamentary disposition,

or to the rights of any person entitled on intestacy, or to its

appropriation to a legacy or to a share or interest in the

estate.

(Inserted by Act 12 of 1999)

69. REGISTRATION

(1) The Comptroller may register as a registered retirement plan

any annuity contract that complies with the conditions of this

Part.

(2) The Comptroller shall, as soon as practicable, give to the

applicant notice of his or her registration of the annuity contract

or his or her refusal to register the annuity contract and where

he or she registers the annuity contract the notice shall specify

the date from which it is registered.

(Inserted by Act 12 of 1999)

70. CHANGE IN ANNUITY CONTRACTS

If an alteration is made to an annuity contract after the date of

application for registration of the contract, the annuitant shall in

writing notify the Comptroller of the alteration, and in default of such

notification any registration granted, unless the Comptroller otherwise

orders, is considered to have been withdrawn as from the date from

which the alteration had effect. (Inserted by Act 12 of 1999)

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71. WITHDRAWAL OF REGISTRATION

(1) The Comptroller may, at any time, withdraw his or her

registration of an annuity contract which, in his or her opinion,

no longer complies with the conditions set out in this Part.

(2) The Comptroller shall, as soon as practicable, give to the parties

to the annuity contract, notice of such withdrawal and the date

from which it is to take effect.

(Inserted by Act 12 of 1999)

72. COMPTROLLER TO BE NOTIFIED OF PAYMENTS UNDER ANNUITY CONTRACT AND TO BE PROVIDED WITH RETURNS

(1) A person who grants an annuity under an annuity contract shall

notify the Comptroller of all payments made under the contract.

(2) A person who grants an annuity under an annuity contract, shall

render the returns required to be rendered by employers under

Schedule 2 and deduct income tax in accordance with Schedule

2 as if the person was an employer of the person to whom the

annuity payment is made.

(Inserted by Act 12 of 1999)

73. ALLOWABLE DEDUCTIONS

Where the annuity contract has been registered by the Comptroller as

a registered plan under section 70, the deduction allowed shall be an

amount of the premium up to a maximum amount of $8,000.

(Inserted by Act 12 of 1999, amended by Act 9 of 2001 and

substituted by Act 14 of 20035)

74. DEDUCTIONS FOR PAYMENTS TO A RHOS PLAN

(1) In this section—

―Registered Home Ownership Savings Plan‖ or ―RHOS

Plan‖ means a savings plan over a period of at least 5

years to be used wholly for the acquisition or construction

of an owner occupied dwelling house;

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76 Cap.15.02 Income Tax Act Laws of Saint Lucia

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―owner occupied dwelling house‖ has the same meaning as in

section 54.

(2) Subject to this section, where, in any year of income a resident

individual, by way of savings, makes payments under a

Registered Home Ownership Plan in any financial institution,

any society registered under the Cooperative Societies Act or in

any institution incorporated under the Building Societies Act

there is allowed a deduction for such payments up to a

maximum of $6,000.

(3) Where a deduction is allowed under this section and any

amounts to which such deduction relates are withdrawn within

the minimum period of 5 years, these amounts are to be

included as income in the year of withdrawal.

(4) To qualify for the deduction under subsection (2), the resident

individual must not have previously owned a home in Saint

Lucia.

(Inserted by Act 12 of 1999)

75. TAX CREDIT IN RESPECT OF FOREIGN CURRENCY FROM INCOME YEAR 2001 ONWARDS

(1) Where from income year 2001 and subsequent income years a

person carrying on business in Saint Lucia derives assessable

income from qualifying professional services and the

Comptroller is satisfied that an amount of foreign currency

earnings has been transferred to the credit of that person within

the income year or within such later time as the Comptroller in

his or her discretion may allow—

(a) by the transfer of foreign currency to Saint Lucia through

the Saint Lucia banking system;

(b) by payment outside Saint Lucia in foreign currency in an

account held in a bank outside Saint Lucia;

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held in Saint Lucia which would be legally remittable

from Saint Lucia,

in computing the tax payable for that income year, there shall

be set off against the tax payable, a foreign currency tax credit,

calculated in the manner specified in Schedule 8.

(2) For the purposes of this section—

(a) ―foreign currency earnings‖ means the gross amount of

foreign currency earnings received from fees, premiums,

rewards or payments from work performed in respect of

qualifying professional service;

(b) ―qualifying professional services‖ are as specified in

paragraphs 3 and 4 of Schedule 8.

(2) The Minister may by order amend, vary or revoke the Schedule.

(Inserted by Act 9 of 2001)

Division 2 — Withholding Tax on Payments to Non-Residents and

Deduction of Tax by Employers, by Companies and from Payments to

Contractors

76. DEDUCTION OF TAX FROM PAYMENTS MADE TO NON- RESIDENT

(1) Where a—

(a) person makes payment to a non-resident; or

(b) branch of a non-resident company makes payments to its

head office or to some other branch or associate outside

Saint Lucia,

tax shall be deducted from such payments in accordance with

and in the manner specified in Schedule 3 and the person or

branch shall carry out such other obligations as are imposed by

that Schedule. (Amended by Act 7 of 2006)

(2) For the purposes of this section, a person including a

partnership, to whom any payment is made to which this section

applies is presumed, unless the contrary is proved, to be a non-

resident if such payment is made to an address outside Saint

Lucia.

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(3) This section does not prevent the Comptroller from directing

the deduction of a lesser amount than that provided in Schedule

3 where he or she is satisfied that the person to whom the

payment is made is a resident of a country with which an

international agreement made under section 60 exists which

provides for a lower rate of withholding tax than that provided

in Schedule 3.

(4) This section and paragraph 1 of Schedule 3 shall not be

construed so as to bring within the charge to withholding tax,

any payments of income which is exempt from tax under Part 4.

77. DEDUCTION OF TAX BY EMPLOYERS

(1) Every employer who pays remuneration to his or her

employees, shall deduct tax from it in accordance with and in

the manner specified in Schedule 4 and shall carry out such

other obligations as are imposed by that Schedule.

(2) In this section ―employer‖ and ―remuneration‖ shall have the

meaning given to them in Schedule 4.

78. DEDUCTION OF TAX FROM PAYMENTS TO CONTRACTORS

(1) Where any person makes any payment, either directly or

indirectly through a financial institution, to a contractor, for the

supply of labour or for the hiring of equipment, that person or

that financial institution shall, subject to subsection (3), deduct

tax from the gross amount of such payment at the rate of 10%.

(2) Any contractor may apply to the Comptroller for an exemption

from compliance with this section, which may be granted where

the Comptroller is satisfied that receipts of such form of income

have been regularly disclosed in the returns of income of such

person and any tax thereon has been paid or secured to the

satisfaction of the Comptroller.

(3) Production of such evidence of exemption by the contractor to a

person, or financial institution, making any such payment shall

be sufficient authority for the payer to make payment of the

gross amount without deductions of tax under subsection (1).

(4) In the case of contractors in operation for less than one year, the

Comptroller may request a deposit representing an advance

payment of the tax payable under subsection (1) and calculated

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in accordance with information made available to him or her by

the contractor.

(5) In this section—

―contractor‖ means any person who is a resident and who is

providing or supplying independent personal services for

reward, other than as an employee, but does not include

any person providing services as or by way of—

(a) accountant, auditor or tax consultant;

(b) business or management consultant;

(d) doctor, dentist, pharmacist or nurse;

(e) civil or mechanical engineer;

(f) funeral undertaking services.

(Amended by Acts 18 of 1990, 11 of 1998 and 9 of 2001)

79. INDEMNIFICATION FOR TAX PAID TO COMPTROLLER

Where any person liable to deduct tax under this Act accounts to the

Comptroller for it, he or she is acquitted and discharged of so much

money as is represented by the tax so deducted and accounted for as

if such sum had actually been paid to the person entitled.

PART 8 ASCERTAINMENT OF TAX PAYABLE

80. RATES OF TAX

(1) Tax shall be charged for each year of income on the chargeable

income for every person at the rates specified in Schedule 5.

(2) Withholding tax shall be charged—

(a) in respect of cash benefits payable to a member on

withdrawal from an approved pension fund at the rate

specified in section 63(15); or on the surrender of a life

insurance policy at the rate specified in section 53(5); and

(b) in respect of any other payments to non-residents at the

rates specified in Schedule 3.

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81. CREDIT FOR TAX DEDUCTED OR PAID

Where any tax is—

(a) deducted under section 77 from employment income

accrued to any person;

(b) deducted under section 78 from a payment to any

contractor; or

113 or otherwise,

the tax so deducted shall be set off against the tax charged

under section 80(1) for the year of income in relation to which

such income accrued.

82. CREDIT FOR TAX PAID OUTSIDE SAINT LUCIA

(1) Where an agreement which has effect under section 60 provides

that tax payable under the laws of the country with which such

agreement has been made is allowed as a credit against tax

charged in Saint Lucia, credit for such tax is given in the

manner provided in such agreement and is to be set off against

the tax charged under this Act.

(2) Where income accrues to a resident and is charged to tax under

the laws of a country outside Saint Lucia—

(a) with which country there is no agreement under section

60; or

(b) with which country there is an agreement under section

60 but is income to which such agreement does not relate,

and such income is charged to tax under this Act, credit for any

tax payable under the laws of the other country in which such

income was charged to tax is calculated in the manner provided

in section 83, and is set off against the tax charged under this

Act.

(3) Where any assessment is made to give effect to the provisions

of this section, it is subject to the limits as to time provided by

section 102.

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83. CALCULATION OF TAX CREDIT FOR FOREIGN TAX

(1) The credit to be set off in respect of tax payable in another

country on the income referred to in section 82(2) is the lesser

of—

(a) the tax payable in the other country on the amount; or

(b) the tax charged under this Act, on the amount.

(2) Where liability to tax in Saint Lucia arises in respect of income

which is received in this country, for the purpose of calculating

the tax charged under this Act, the amount of the assessable

income charged to tax in the other country shall be taken to be

the aggregate of the amount remitted to this country and the

amount of tax payable thereon in the other country.

(3) In this section—

―the tax payable in the other country‖ means the amount

payable, either directly or by deduction, for which the

resident person was personally liable and actually paid in

that other country; and

―the tax charged under this Act‖ in relation to any year of

income means that proportion of such tax which the

assessable income charged to tax in the other country

bears to the total assessable income for that year of

income, but where the proportion is greater than the tax

actually paid the tax charged shall be limited to the

amount actually paid.

PART 9 RETURNS AND NOTICES

84. RETURNS OF INCOME: GENERAL

(1) Subject to section 96, every person liable to furnish a return of

income in respect of any year of either personally or in a

representative capacity shall furnish a return in such form as

may be approved by the Comptroller within 3 months after the

year of income and such return shall—

(a) be signed by him or her or by an agent authorised to sign

on his or her behalf;

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(b) contain a calculation of the chargeable income, if any,

disclosed therein and of the tax payable thereon; and

(2) For the purposes of this section ―every person liable to furnish a

return of income‖ includes—

(a) every person liable to pay tax under this Act;

(b) every partnership;

income has made a loss in respect of which he or she may

be entitled to claim a deduction for the year of income or

any subsequent year of income;

(d) subject to subsection (5), every person who derives any

income from any source specified in section 32

irrespective of the amount of that income; and

(e) every person who derives any income which would be

charged to tax under this Act save for the provisions of

sections 26 to 30 or any other enactment which has

exempted that income from the charge to tax for a limited

period of time.

(3) The Comptroller shall give general notice in such manner as he

or she considers fit of the obligations imposed by this section

and shall in any such notice specify the place at which return

forms may be obtained.

(4) Despite subsection (3) the Comptroller may cause forms to be

delivered by hand or by post to any person, but failure to do so,

or the non-receipt by any person of a return form does not

relieve any person liable to furnish a return of income from his

or her obligation to comply with subsection (1).

(5) Despite subsection (2)—

(a) a resident individual whose income accrues from sources

other than a business and whose income from which does

not exceed the sums specified as allowances in Schedule

6 during a year of income; and

(b) a non-resident person, whose income accrued from

sources situated in Saint Lucia consists only of income to

which the provisions of section 76 apply,

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are relieved of the obligation of furnishing a return of income

under subsection (1).

85. RETURNS OF INCOME: CESSATION OF INCOME DURING ANY YEAR OF INCOME

Where it appears to the Comptroller that—

(a) a person may leave Saint Lucia during any year of income

or shortly after its expiry and that the absence from Saint

Lucia of such person is unlikely to be temporary only;

(b) a person has ceased to carry on business during any year

of income; or

the Comptroller may, subject to section 121, at any time serve

upon such person a notice in writing requiring him or her to

furnish within such time as may be specified in the notice, not

being less than 7 days from the date of service of such notice, a

return of income for any year of income.

86. RETURNS OF INCOME: WHERE NO RETURN FURNISHED

(1) Where it appears to the Comptroller that any person is or may

be liable to furnish a return of income for any year of income

and has not done so, the Comptroller may, subject to section

121, by notice in writing, require such person to furnish a return

of income within such time as may be specified in the notice,

not being less than 7 days from the date of service of such

notice.

(2) This section shall not be construed as extending the time limits

provided by section 84 for the furnishing of any return of

income.

87. FURTHER RETURN OR INFORMATION, PRODUCTION OF BOOKS AND GIVING OF EVIDENCE TO COMPTROLLER

(1) For the purposes of the administration or the enforcement of

this Act, including the obtaining of full information in respect

of the income of any person who is or may be liable to tax the

Comptroller may, by notice in writing, require that person or

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any other person whom the Comptroller reasonably believes is

capable of so doing—

(a) to furnish to the Comptroller at such time as may be

specified in such notice such further return of income,

statement of assets and liabilities or other information as

may be required by him or her;

(b) to produce, at such time and place as may be specified in

such notice, for examination by the Comptroller or for

retention by him or her for such period as may be

reasonable for their examination, any accounts, books of

account, statement of assets and liabilities or other

documents which the Comptroller may consider necessary

for such purpose and, if any such information is not

available in the English Language, to produce at the

expense of the person who is or may be liable to tax a

translation in English prepared and certified by an

approved translator;

such notice, for the purpose of being examined by the

Comptroller in respect of assessable or chargeable income

of himself or herself or any other person or any

transaction or matters appearing to the Comptroller to be

relevant thereto.

(2) Without prejudice to the generality of subsection (1), the

Comptroller may require any bank—

(a) to furnish to him or her details of any banking account or

other assets which may be held on behalf of any person,

or to furnish a copy of bank statements of any such

banking account;

(b) to permit the Comptroller or any officer not being below

the rank of a senior tax inspector authorised by him or her

to inspect the records of the bank with respect to the

banking account of any person,

or may require the attendance of any officer of a bank before

him or her to give evidence respecting any bank account or

other assets which may be held by the bank on behalf of any

person.

(3) Subject to such modifications and adaptations as may be

necessary the provisions of subsection (1) shall extend to the

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supply of information, the production of documents and the

giving of evidence to the Comptroller in relation to—

(a) the payment of income by any person to a non-resident, to

which Schedule 3 applies;

(b) the payment of remuneration by an employer to his or her

employees, to which Schedule 4 applies,

the deduction of tax therefrom and the accounting for any tax so

deducted.

(4) Where any books of account or other documents are produced

for the purposes of this section the Comptroller may make

copies of such books or documents or may retain them where

such course of action appears to him or her to be necessary for

the purposes of any prosecution or the substantiation of any

assessment.

88. EXAMINATION OF BUSINESS RECORDS

(1) The Comptroller may carry out an examination of the income

affairs of the business of any person liable to pay tax but subject

to the limit as to time specified in section 102.

(2) For the purposes of subsection (1), the Comptroller or any

officer not being below the rank of a Senior Officer authorised

by him or her may at all reasonable times, and subject to prior

notice, enter into any premises where any business is carried on

or the records or books of account of such business are kept,

and—

(a) examine such records or books of account and examine

any documents which relate to income accruing from such

business;

(b) inspect any trading stock of the business and any assets of

the business in respect of which allowances or deductions

have been or may be claimed under this Act;

agent to give him or her such reasonable assistance in

connection with the examination and inspection as may be

necessary and to answer orally or in writing any questions

relating thereto;

(d) open or cause to be opened any article in which he or she

considers any money or documents may be contained.

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(3) Where, during the course of any examination or inspection, it

appears to the Comptroller or the officer not below the rank of a

senior officer that there may not have been a correct disclosure

of assessable income or allowable deductions he or she may

take possession of any books of account or other documents for

further examination at the office of the Comptroller and after

such examination may retain or make copies of or take extracts

from such books or documents for the purposes of any

prosecution or the substantiation of any assessment.

(4) For the purposes of this section "document" includes

microfilm.

(Amended by Act 7 of 2006)

89. POWERS OF ENTRY

(1) Admission to any premises shall not be demanded unless 24

hours‘ notice of the intended entry has been given to the owner

or occupier.

(2) If it is shown to the satisfaction of a magistrate on sworn

information in writing—

(a) that admission to any premises was refused, or that refusal

is apprehended, or that the giving of notice would defeat

the object of the entry; and

(b) that there is reasonable ground for entry into the premises

for the purposes of this Act,

the magistrate may by warrant under his or her hand authorise

the Comptroller or any authorised officer in writing by him or

her to enter the premises, if need be by force. Where it is shown

to the satisfaction of the magistrate that the giving of notice

would defeat the object of the entry, the provisions of this

section shall apply despite anything to the contrary in the

preceding subsection.

(3) An authorised officer entering any premises by virtue of this

section, or of a warrant issued thereunder, may take with him or

her such other persons as may be necessary.

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(4) Every warrant granted under this section shall continue in force

until the purpose for which the entry is necessary has been

satisfied.

(5) Every person who hinders or molests or interferes with any

person doing anything that he or she is authorised to do or

prevents or attempts to prevent any person from doing any such

thing and any person who unless he or she is unable to do so

fails or refuses to do anything he or she is required by or under

this or the preceding section to do commits an offence and is

liable on summary conviction to a fine not exceeding $1,500 or

to imprisonment for 2 years or to both such fine and

imprisonment.

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90. MAINTENANCE OF PROPER RECORDS OF TRANSACTIONS, METHODS OF ACCOUNTING AND PRESERVATION OF BOOKS OF ACCOUNT AND RECORDS

(1) Every person carrying on any business shall keep, in the

English language, such records or books of accounts as are

necessary to reflect the true and full nature of the transactions of

the business regard being had to the nature of the activities

concerned and the scale on which they are carried on.

(2) Where the Comptroller is of the opinion that records or books

of account are not being kept in accordance with subsection (1),

or where no records or books of account are being kept, by any

person carrying on business then in addition to any proceedings

which may be taken under section 140, the Comptroller may

direct such person to keep such records or books of account as

he or she may specify.

(3) The records or books of account required by this section shall

be kept at the place of business of the person carrying on

business unless the Comptroller approves of them being kept at

some other place.

(4) Subject to subsections (5) and (6), every person to whom this

section applies shall preserve all books of account and other

records which are essential to the explanation of any entry in

such books of account of that business for a period of 6 years

after the end of the income year to which such books of account

or records relate.

(5) The Comptroller may, by notice in writing, require any person

to retain such records as are referred to in subsection (4) for

such further period of time as he or she deems necessary for

their proper examination.

(6) Where—

(a) a person dies;

(b) a company has gone into liquidation;

(d) in any other case where he or she is satisfied that it is

reasonable to do so,

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the Comptroller may, on application, approve of the disposal of

any books of account or other records within such lesser period

than 6 years as he or she thinks fit.

(7) The Comptroller may, subject to such conditions and in respect

of such books of account or other records as he or she may

specify, authorise the retention of a micro film copy of any

books of accounts or other records in lieu of the original books

or records.

(8) For the purposes of this section the books of account and other

records required to be preserved shall be deemed to include the

record required to be kept under Schedule 3 or 4.

91. SUBMISSION OF ACCOUNTS WITH RETURN OF INCOME AND CERTIFICATE RELATING TO PREPARATION OF ACCOUNTS

(1) Where any person carries on business in any year of income his

or her return of income for such year shall be accompanied by a

copy of the final accounts of the business together with a

reconciliation of the income shown in the accounts with the

chargeable income disclosed in the return in relation to the

business.

(2) Where the accounts referred to in subsection (1) are audited by

a professionally qualified auditor, he or she shall provide on the

face of the accounts a certificate giving his or her name, address

and occupation and stating—

(a) the extent of the examination made of the books of

account and of the documents from which such books of

account were prepared; and

(b) whether or not, as far as he or she was able to ascertain

from such examination, the entries in those books of

account disclosed the true nature of every transaction,

receipt, accrual, payment and debit.

(3) Where the accounts referred to in subsection (1) have been

prepared by a person other than the person carrying on the

business and have not been audited by a professionally qualified

auditor, that other person shall provide on the face of the

accounts a certificate giving his or her name, address and

occupation and stating whether he or she has made any

examination, and if so, the extent of the examination made, of

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the books of account and of documents from which such books

of account were prepared.

92. PRINCIPAL OFFICER OF COMPANY

(1) Every company carrying on business in Saint Lucia shall at all

times be represented for the purposes of this Act by a principal

officer residing in Saint Lucia and duly appointed by the

company or its authorised agent or attorney.

(2) Every company shall appoint a principal officer and an address

for service of notices—

(a) if it is carrying on business at the commencement of this

Act, within 2 months after such commencement; or

(b) in the case of a company which begins to carry on

business in Saint Lucia after the commencement of this

Act, within one month after the commencement of

business,

and shall notify the Comptroller of such appointment and

address within the periods specified.

(3) Every change of principal officer or of the address for service of

notices on the company shall be notified to the Comptroller by

the company within 15 days of such change occurring.

(4) The principal officer shall be answerable for the doing of all

such things as are required under this Act to be done by the

company of which he or she is the representative and in case of

default he or she is liable to the same penalties.

(5) Everything done by the principal officer, which he or she is

required to do in his or her representative capacity, is

considered to have been done by the company and any notice

given to the principal officer is considered to be given to the

company.

(6) The absence of or failure to appoint a principal officer does not

excuse a company from the necessity of complying with any of

the provisions of this Act and the company shall be subject to

and liable to comply with its provisions as if there were no

requirement to appoint a principal officer.

(7) Every notice, process or proceeding which under this Act may

be given to, served on or taken against any company may be

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given to, served on or taken against the principal officer, and if

at any time there is no principal officer, then any such notice,

process or proceeding may be given to, served on or taken

against any officer or person acting in the management of the

business of the company or as agent for the company and such

person has the same liability in respect of that notice, process or

proceeding as the company or principal officer would have had

if it had been given to, served on or taken against the company

or principal officer.

(8) In the event of any company being placed in liquidation the

liquidator is required to exercise all the functions and assume

all the responsibilities of a principal officer under this Act

during the continuance of the liquidation, and any person

previously appointed as principal officer of the company shall

cease to be principal officer at such time.

93. PRECEDENT PARTNER OF PARTNERSHIP

(1) Every partnership carrying on business in Saint Lucia shall at

all times be represented by a resident individual who shall be—

(a) the precedent partner; or

(b) if no acting partner is resident in Saint Lucia, the agent of

the partnership in Saint Lucia.

(2) The precedent partner shall be the person who, being an acting

partner resident in Saint Lucia—

(a) is first named in the partnership agreement;

(b) if there is no partnership agreement, is specified by name

or initial singly or with precedence to the other partners in

the usual name of the partnership,

or, in any case where neither paragraph (a) or (b) is applicable,

such other partner as is specified by the partnership.

(3) Every partnership shall notify the Comptroller of the name of

the precedent partner, or, if there is no acting partner resident in

Saint Lucia shall appoint and notify the Comptroller of the

name of its agent in Saint Lucia—

(a) if it is carrying on business at the commencement of this

Act, within 2 months after such commencement; or

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(b) if it begins to carry on business after the commencement

of this Act, within one month after the commencement of

business.

(4) Every partnership shall within the period specified in subsection

(3) appoint an address for service of notice.

(5) Every change of precedent partner or agent of the partnership or

of address for service of notices shall be notified to the

Comptroller within 15 days of such change.

(6) The precedent partner or agent, as the case may be, shall be

answerable for the doing of all such things as are required under

this Act to be done by the partnership of which he or she is the

representative and in case of default he or she is liable to the

same penalties.

(7) Everything done by the precedent partner or the agent, as the

case may be, which he or she is required to do in his or her

representative capacity is considered to have been done by the

partnership, and any notice given to or request made upon the

precedent partner or the agent is considered to have been given

to or made upon the partnership.

94. RETURNS DEEMED TO BE FURNISHED BY DUE AUTHORITY AND IN FULL KNOWLEDGE OF CONTENTS

Every return, statement or form purporting to be furnished under this

Act by or on behalf of any person shall for all purposes of this Act be

deemed to have been furnished by that person or with his or her

authority, as the case may be, unless the contrary is proved, and any

person signing such return, statement or form shall be deemed to be

cognisant of all matters contained therein.

95. RETURNS: METHOD OF FURNISHING

Any return required to be furnished under this Act shall be delivered

by hand or post to the address specified in the relevant form.

96. RETURNS: EXTENSIONS OF TIME FOR FURNISHING

(1) Where, under this Act, any return is required to be furnished by

any person within a specified period the Comptroller may, on

application by such person in writing, by notice in writing

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served on such person, extend the period within which such

return is to be furnished.

(2) The granting of the extension of time under subsection (1) does

not affect the due date for payment of tax under section 114.

(Inserted by Act 9 of 2001)

PART 10 ASSESSMENT OF TAX

97. ASSESSMENTS

(1) Subject to section 102, the Comptroller—

(a) shall make an assessment of the chargeable income of and

the tax payable by every person chargeable with tax; and

(b) may make an assessment of any person where there is no

chargeable income but there is an entitlement to a refund

of tax.

(2) Where a person furnishes a return of income, the Comptroller

may accept such return and make an assessment in accordance

with it.

(3) Where—

(a) a person fails to furnish a return of income; or

(b) the Comptroller is not satisfied that the return furnished

by any person is true and correct,

he or she may make an assessment to the best of his or her

judgement.

98. ADDITIONAL ASSESSMENT

(1) Subject to section 102, where in relation to an assessment made

on any person for any year of income, the Comptroller is of the

opinion that—

(a) the tax charged is less than the amount which should have

been charged;

(b) any assessed loss is greater than the amount at which it

should have been assessed; or

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be refunded,

he or she shall make an additional assessment accordingly.

(2) Where, on the determination of an appeal made under Part 11,

the appeal commissioners or any subsequent appellate tribunal

increase an assessment, the Comptroller shall increase the

assessment accordingly, without limit as to time.

99. TRANSACTIONS DESIGNED TO AVOID LIABILITY TO TAX

(1) Where the Comptroller has reasonable grounds to believe that

the main purpose or one of the main purposes for which any

transaction was or transactions were effected (whether before or

after the commencement of this Act) was the avoidance or

reduction of liability to tax for any year, he or she may, if he or

she determines it to be just and reasonable, direct that such

adjustments shall be made as respects liability to tax as he or

she may deem appropriate so as to counteract the avoidance or

reduction of liability to tax which would otherwise be effected

by the transaction or transactions.

However, this subsection does not apply to any transaction the

main purpose or one of the main purposes for which was to

effect the succession by a resident company, incorporated for

that purpose, to any business carried on by an individual or

partnership.

(2) Without prejudice to the generality of the powers conferred by

subsection (1) the powers conferred thereby extend—

(a) to the charging with tax of persons who, but for the

adjustments, would not be chargeable with any tax, or

would not be chargeable to the same extent;

(b) to the charging of a greater amount of tax than would be

chargeable but for the adjustments; and

be payment of a salary.

100. REDUCED ASSESSMENTS

(1) Subject to this section, in relation to an assessment made on any

person for any year of income the Comptroller is satisfied upon

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a claim made within 6 years after the end of that year of income

that there is a mistake in the assessment apparent from the face

of the return, the assessment or other records, as a result of

which—

(a) the tax charged is greater than the amount which should

be charged;

(b) any assessed loss is less than the amount at which it

should be assessed; or

should have been refunded, the Comptroller shall make a

reduced assessment accordingly.

(2) Where, on the determination of an appeal made under Part 11,

the appeal commissioners or any subsequent appellate tribunal

order the reduction of an assessment, the Comptroller shall

reduce the assessment accordingly, without limit as to time.

(3) Where, for any year of income a person who has furnished a

return of income for that year and has been assessed under

sections 97 or 98 notifies the Comptroller in writing within 6

years after the end of that year of income that by reason of some

error or mistake of fact in such return the assessment was

excessive, the Comptroller after taking into account all relevant

circumstances and subject to subsection (4), may reduce the

assessment to provide such relief as appears to him or her to be

fair and reasonable.

(4) No relief shall be given under subsection (3) if the assessment

was properly made in accordance with the practice generally

prevailing at the time the return of income was made.

101. DETERMINATION OF ASSESSED LOSS

(1) Where, in relation to any year of income, the amount, as

determined by the Comptroller by which the deductions

allowable to any person under Division 2 of Part 5 exceed the

assessable income against which such deductions may be

allowed the Comptroller shall make a determination of such

excess (referred to in this Act as ―the assessed loss‖).

(2) The determination of the assessed loss of any person under

subsection (1) shall constitute the making of an assessment by

the Comptroller and shall be notified in writing to the person

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assessed and the provisions of this Act other than sections 103

and 104 shall apply as if such determination were the

determination of the amount of the assessable income of such

person for such year of income.

102. TIME LIMITS FOR ASSESSMENTS

(1) Subject to this section, an assessment may be made in relation

to any person at any time prior to the expiry of 6 years after the

end of the year of income to which it relates.

(2) Where a return of income is furnished after the end of the year

of income, an assessment may be made at any time prior to the

expiry of 6 years after the end of the year during which it is

furnished.

(3) Subject to subsection (4), where no return of income is

furnished in relation to a year of income, an assessment may be

made at any time before the expiration of 6 years after the year

of income to which it relates.

(4) Where, due to any fraud or wilful default—

(a) no return of income is furnished in relation to a year of

income; or

(b) an incorrect return of income has been furnished in

relation to a year of income,

an assessment in relation to such year may be made at any time.

(5) Where a person is deceased, despite the provisions of

subsections (1), (2), (3) and (4), no assessment shall be made at

any time after the expiry of 4 years from the end of the year in

which such person died.

(3) The provisions of subsection (4) are without prejudice to the

right of appeal of a tax payer under this Act.

(Amended by Act 9 of 2001)

103. NOTICE OF ASSESSMENT

(1) Subject to subsection (2), a notice of assessment in respect of

every person chargeable with tax shall be made and issued to

such person in such form as may be approved by the

Comptroller.

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(2) The Comptroller shall not be required to issue a notice of

assessment to any person where—

(a) no liability to tax arises and no tax has to be repaid;

(b) liability to tax arises but the tax payable does not exceed

$5,

unless the person makes a request for the issue of a notice of

assessment.

(3) In this section, ―notice of assessment‖ includes a notice in

respect of an additional assessment and a reduced assessment.

104. RECORD OF ASSESSMENT

The Comptroller shall maintain, in such manner as he or she thinks

fit, a record of all assessments made in respect of each year of

income.

105. FINALITY OF ASSESSMENT

(1) Subject to section 100, where, in relation to an assessment—

(a) no valid notice of objection is given under section 106;

(b) subsequent to the determination of an objection, no valid

notice of appeal is given under section 109; or

appeal,

such assessment is final and conclusive.

(2) Subsection (1) does not prevent the Comptroller from making

an additional assessment within such time limits as are

permitted by section 102 for any year of income which does not

involve re-opening any matter which has been determined on

appeal for such year.

(3) Despite subsections (1) and (2) where any fraud or wilful

default has been committed by or on behalf of any person in

relation to his or her liability to tax for any year of income, the

Comptroller may make an additional assessment for such year

even though it may involve re-opening a matter which has been

determined on appeal, but only in respect of a matter upon

which no finding of fact was in dispute.

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PART 11 OBJECTIONS AND APPEALS

106. OBJECTION TO ASSESSMENT

(1) Any person who is aggrieved by an assessment or a

determination by the Comptroller made on him or her may, by

notice in writing to the Comptroller within 30 days after the

date of service of the notice of assessment or determination, or

within such further time as the Comptroller may for good cause

allow, object to the assessment or determination.

(2) Where the assessment is—

(a) an additional assessment; or

(b) a reduced assessment which in part imposes a fresh

liability,

the person assessed shall have no further right of objection than

he or she would have had if that assessment had not been made

except to the extent to which that assessment has imposed a

fresh liability on him or her.

(3) An objection shall specify particulars of the grounds on which it

is made.

(4) In this section ―aggrieved by an assessment or a determination‖

means aggrieved by—

(a) the inclusion in an assessment of an amount as part of the

assessable income;

(b) the disallowance in an assessment of an amount claimed

as a deduction in ascertaining the chargeable income;

assessed loss;

(d) the amount of tax set off under sections 81, 82 or 113; or

(e) the determination by the Comptroller of any matter

affecting a person‘s liability to tax in circumstances where

such determination has not involved the making of an

assessment.

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107. DECISION BY COMPTROLLER ON OBJECTION

(1) The Comptroller shall consider any valid objection made under

section 106 and may either disallow it or allow it either wholly

or in part and shall, by notice in writing, inform the objector of

his or her decision.

(2) If a decision of the Comptroller in determining an objection

requires the reduction of or an increase in, an assessment, the

Comptroller shall issue a notice of the reduction or increase in

the assessment to the person assessed, together with the notice

of his or her decision or as soon as is practicable.

108. APPEAL COMMISSIONERS

(1) For the purposes of this Part, there is hereby established a

tribunal of appeal commissioners constituted and regulated in

accordance with this section.

(2) The appeal commissioners shall comprise such persons as may

be appointed by the Cabinet.

(3) Cabinet shall appoint one of the Commissioners to be

Chairperson and another to be Deputy Chairperson and any

meeting of the appeal commissioners shall comprise the

Chairperson and 2 other members.

However, in the absence of or inability of the Chairperson to act

a meeting of the appeal commissioners shall comprise the

Deputy Chairperson and 2 other members.

(4) Every decision of the appeal commissioners shall be given

under the signature of the Chairperson presiding at the meeting.

(5) The Cabinet shall appoint a Secretary to the appeal

commissioners and any notice or correspondence, other than

decisions of the commissioners, may be issued and signed by

the Secretary.

(6) At any hearing by the appeal commissioners, in the event of a

division of opinion, the decision of the majority shall prevail.

(7) The appeal commissioners have—

(a) the power to summon to attend at the hearing of an appeal

any person who in its opinion is or might be able to give

evidence respecting the appeal;

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(b) power, where any person is so summoned, to examine

him or her on oath or otherwise;

documents which are in his or her custody or under his or

her control and which the appeal commissioners may

consider necessary for the purpose of the appeal;

(d) all the powers of a court with regard to the enforcement of

attendance of witnesses, hearing evidence on oath and

punishment for contempt;

(e) power to postpone or adjourn the hearing of an appeal

where the appeal commissioners are satisfied that, for any

reasonable cause, either party to the appeal is prevented

from attending on the date fixed for such hearing; and

(f) power to determine the procedure to be followed in an

appeal.

109. APPEAL FROM DECISION BY COMPTROLLER

(1) Any person (hereinafter referred to as ―the appellant‖) who is

aggrieved by a decision of the Comptroller may, by notice of

appeal, appeal to the appeal commissioners.

(2) A notice of appeal, a copy of which shall be lodged with the

Comptroller, shall be made in writing and shall be lodged with

the Secretary to the appeal commissioners within 30 days of the

date of service of—

(a) the Comptroller‘s decision on the objection; or

(b) the Comptroller‘s determination in relation to any other

matter from which an appeal may be made,

or within such further time as the appeal commissioners may

for good cause allow.

(3) In this section ―aggrieved by a decision of the Comptroller‖

means aggrieved by a decision of the Comptroller upon an

objection against—

(a) the inclusion in an assessment of an amount as part of the

assessable income;

(b) the disallowance in an assessment of an amount claimed

as a deduction in ascertaining the chargeable income;

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assessed loss;

(d) the amount of tax set off under sections 81, 82 or 113;

(e) the disallowance by the Comptroller of a claim for relief

under section 100; or

(f) any determination by the Comptroller of any matter

affecting a person‘s liability to tax in circumstances not

involving the making of an assessment.

110. HEARING BY APPEAL COMMISSIONER

(1) Upon every hearing of an appeal, the appeal commissioners

may confirm, increase or order the reduction of any assessment

or make such other order as they deem fit.

(2) On any appeal to which this section relates both the appellant

and the Comptroller shall bear their own costs except where the

appeal commissioners otherwise direct.

(3) On any appeal the burden of proof shall lie upon the appellant.

(4) At least 30 days before the date fixed for the hearing of an

appeal, the Secretary to the appeal commissioners shall, by

notice in writing, advise the appellant and the Comptroller of

the date on, and the place at which the appeal has been set down

for hearing.

(5) At every hearing by the appeal commissioners the appellant and

the Comptroller is entitled to appear in person or by a

representative.

(6) The hearing of an appeal by the appeal commissioners shall not

be public unless the Chairperson of the appeal commissioners

so directs on application by the appellant and in any case where

such a direction is made the obligation as to secrecy imposed by

section 6 ceases to apply.

(7) The Chairperson of the appeal commissioners may authorise the

publication of the decision on any appeal but the publication

shall be in such manner as not to disclose the identity of the

appellant.

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111. RIGHT OF FURTHER APPEAL

(1) The Comptroller or the appellant may within 30 days appeal to

the High Court from any decision of the appeal commissioners

which involves a question of law, including a question of mixed

fact and law.

(2) The Comptroller or the appellant may within 30 days appeal to

the Court of Appeal from any decision of the High Court (being

a decision of the High Court on an appeal from the appeal

commissioners) which involves a question of law, including a

question of mixed fact and law.

(3) On any further appeal to which this section relates the High

Court or the Court of Appeal, as the case may be—

(a) may confirm, increase or order the reduction of any

assessment;

(b) may make such other order as it deems fit; and

112. PAYMENT OF TAX SUSPENDED BY OBJECTION OR APPEAL

(1) The obligation to pay—

(a) any tax chargeable under an assessment;

(b) any penalty imposed in an assessment for failure to lodge

a return or for failure to lodge a correct return; or

assessed tax,

shall be suspended by reason of any notice of objection or

appeal having been given against an assessment, pending

determination of the objection or appeal.

(2) The Comptroller may enforce payment of that portion of the tax

which is not in dispute.

(3) Despite the provisions of subsection (1), the Comptroller may,

in his or her discretion, require the taxpayer to pay an amount

not exceeding 50% of the tax in dispute pending the

determination of the appeal.

(4) If the taxpayer‘s appeal is allowed by the Commissioners, the

amount paid under subsection (3) shall be refunded by the

Comptroller to the taxpayer.

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(Amended by Act 18 of 1990)

PART 12 PAYMENT, RECOVERY AND REFUND OF TAX

113. ADVANCE PAYMENT OF TAX

(1) This section shall apply to—

(a) every resident company;

(b) every other resident person, except an individual whose

only source of income is from employment or by way of

dividends or both such sources;

Lucia, except a non-resident person providing

independent personal services in respect of which there is

a liability to withholding tax.

(2) Subject to this section, every person to whom this section

applies shall in respect of his or her liability to tax for any year

of income make payment towards such tax in the manner

provided by this section.

(3) Subject to this section, every person shall pay to the

Comptroller on or before 25 March, 25 June and 25 September

respectively, in each year of income, an amount equal to 1 /3 of

the tax estimated by him or her at the rates set out in Schedule 5

on his or her estimated chargeable income for the year and, on

or before 31 March in the following year, or where, in the case

of a company, its financial year does not commence in the

month of January, within 3 months after the end of its financial

year, the remainder of the tax as estimated by him or her.

(4) For the purposes of subsection (3) the estimated chargeable

income of any person for a year of income is taken to be the

chargeable income as disclosed in his or her return, if any, of

total income for the preceding year of income.

(5) Where the estimated chargeable income of any person for the

year of income as provided for by subsection (4) is, in the

opinion of such person, likely to be less than the chargeable

income of the preceding year, on an application by such person

for the purpose, the Comptroller may revise the estimated

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chargeable income of that person and the amount of tax

chargeable thereon, and the provisions of subsection (1) shall

apply accordingly.

(6) In the case of a person other than a company, who is in receipt

of income from—

(a) employment or dividends or both; and

(b) another source or sources,

the instalments payable shall take into account any deductions

of tax which have been made under Schedule 4 in relation to

employment income.

(7) Any instalments of tax paid under this section in respect of a

year of income shall be set off against the tax charged under

section 80(1) for such year.

(8) Despite section 129(3), the Comptroller may apply any

overpayment of tax, against instalments which are due to be paid

in accordance with this section.

(Amended by Acts 18 of 1990, 7 of 1994, 8 of 1996 and 11 of 1998)

114. WHEN TAX IS DUE AND PAYABLE

(1) Subject to this Part, and particularly to section 113, any tax

charged by a notice of assessment is due and payable—

(a) by 30 September in the year of income, or

(b) within 30 days of the date of service of the notice of

assessment, whichever is the later.

(2) In the case of emolument income any additional tax due and

payable as calculated under the provisions of section 84 is to be

paid at time of filing the return provided for in that section.

Except that where any further tax is charged by way of any

notice of assessment the provisions of subsection (1) above

apply.

(3) On application in writing by the person chargeable, the

Comptroller may in any case grant in writing such extension of

time for payment or permit payments to be made by such

instalments and within such time as he or she considers the

circumstances warrant, and in such case the tax is due and

payable accordingly, but nothing in this subsection is to be

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construed to extend the due date specified in subsection (1) in

respect of any interest payable under section 115.

(3) Where, under subsections (1) and (2), any tax is permitted to be

paid by instalments and there is default in payment of any

instalment, the whole of the balance of tax outstanding shall

become due and payable.

(Amended by Act 9 of 2001)

115. INTEREST ON UNPAID TAX

(1) Any tax, being the whole or part of an instalment of tax due and

payable by any person under section 113, not paid by the date

upon which such instalment or part thereof becomes due and

payable shall bear interest at the rate of 11/4% per year above

the prevailing prime rate of interest or such other rate as may be

prescribed by the Minister by Order made by statutory

instrument for the period during which it remains unpaid.

(2) Any tax, being the remainder of any tax charged on any person

under section 114 not paid by the due date shall bear interest at

the rate of 1% per year above the prevailing prime rate of

interest or such other rate as may be prescribed by the Minister

by Order made by statutory instrument for the period during

which it remains unpaid.

(Substituted by Act 11 of 2007)

116. WHEN TAX DEDUCTED FROM REMUNERATION, PAYMENTS TO CONTRACTORS OR PAYMENTS TO NON-RESIDENTS IS DUE AND PAYABLE

Any tax deducted or deductible—

(a) from the remuneration paid to an employee under section

77;

(b) from payments to contractors under section 78; or

which section 76 applies,

is due and payable within 15 days after the end of the month during

which that tax was deducted or deductible.

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117. INTEREST ON UNPAID TAX DEDUCTIONS

(1) Any tax or part thereof deducted or deductible under sections

53, 63, 76, 77, or 78 and not paid by the time specified in those

sections or in section 116 bear interest at the rate of 1% per year

above the prevailing prime rate of interest or such other rate as

may be prescribed by the Minister by Order made by statutory

instrument for the period during which it remains unpaid.

(2) Any interest imposed on any person under subsection (1) shall

be a debt by that person and shall not be recoverable by him or

her from the person in respect of whom the tax was deducted or

should have been deducted.

(Amended by Act 18 of 1990 and 11 of 2007)

118. RECOVERY OF TAX BY COURT ACTION

(1) Tax shall, when it becomes due and payable, be a debt due to

the Government and payable to the Comptroller.

(2) Any tax unpaid may be sued for and recovered by the

Comptroller in any court of competent jurisdiction.

(3) In any proceedings for the recovery of tax it shall not be

competent for the defendant to enter a defence that the tax

charged is excessive.

(4) In this section, tax includes—

(a) tax payable under sections 113 and 114; and

(b) tax deducted or deductible under sections 53(5), 63(14),

76, 77, or 78.

119. RECOVERY OF TAX BY DISTRAINT

(1) If upon demand made by the Comptroller a person neglects or

refuses to pay any tax or any portion of it that is payable, the

Comptroller by warrant under his or her hand, in the form given

in Schedule 7, may authorise an officer of the rank of senior

executive officer or above hereinafter referred to as an

―authorised person‖ to distrain upon the goods and chattels of

that person.

(2) For the purpose of levying any such distress, the ―authorised

person‖ may break open, in the day-time, any house or

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premises, calling to his or her assistance any constable. Every

such constable shall, when so required, aid and assist the

―authorised person‖ in the execution of the warrant and in

levying the distress in the house or premises.

(3) A distress levied by the authorised person shall be kept for any

period not exceeding 30 days, at the costs and charges of the

person neglecting or refusing to pay.

(4) If the person from whom such tax is recoverable does not pay

the sum due, together with the costs and charges, within the said

30 days, the goods and chattels distrained upon shall be sold by

public auction by the authorised person or any person deputed

by him or her for payment of the sum due and all costs and

charges. The costs and charges of taking, keeping and selling

the distress shall be retained by the authorised person or any

person deputed by him or her, and any surplus arising from the

distress, after the deduction of the costs and charges and of the

sum due, shall be restored to the owner of the goods and

chattels distrained.

(5) Every sale under subsection (4) shall be held at such time and

place as the Comptroller shall direct and notice of such sale

shall be published in the Gazette.

(6) In this section ―constable‖ includes any member of the police

service and any member of the special reserve, a special

constable or a rural constable appointed under the Police Act.

120. OBSTRUCTION OF OFFICERS

A person commits an offence who, by himself or herself or by any

person in his or her employ obstructs, molests or hinders—

(a) an authorised person or any person employed in relation

to any duty of tax in the execution of his or her duty, or of

any of the powers or authorities by law given to the

authorised person or any other person; or

(b) any person acting in the aid of an authorised person or

any person so employed.

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121. RECOVERY OF TAX AS PRIVILEGED DEBT BY REGISTRATION AS JUDGEMENT DEBT

(1) Where any tax having become due and payable by any person

under section 113 or 114 remains unpaid after the day on or

before or by which it should have been paid such tax constitutes

a privileged debt due to the Government carrying a privilege

over all property whether movable or immovable, ranking

immediately after law costs and in priority to all other

privileged claims, charges or debts against such person.

(2) Such tax and any amount of penalty due under section 134 is

considered to be a judgement debt due by that person and

payable to the Comptroller and execution for the recovery

thereof together with interest at the rate of 1% per month or part

thereof and costs may be issued by the Comptroller under a

certificate prepared by him or her containing particulars of—

(a) the date upon which the tax become due and payable;

(b) the amount of tax, penalty and interest.

(3) The Comptroller may register the certificate referred to in

subsection (2) in the Land Registry or the Registry of Deeds

and Mortgages as if it were a judgement; and upon satisfaction

thereof he or she shall issue a further certificate certifying

payment which upon registration by him or her shall have the

effect of discharging the registered judgement.

(4) A fee shall not be charged for the registration of a certificate of

debt or certificate of payment to which this section applies.

122. RECOVERY OF MONEYS FROM PERSONS LEAVING SAINT LUCIA

(1) Where the Comptroller has reason to believe that any person

may leave Saint Lucia owing moneys under this Act, the

Comptroller may, by notice in writing served on that person,

require that he or she pay the amount owing or give security to

the satisfaction of the Comptroller for the payment of the

amount, within the time specified in the notice.

(2) If any person fails to pay any money owing or give satisfactory

security as required under subsection (1), an exit certificate

shall not be issued to such person under the subsidiary

legislation in force in relation to income tax exit certificates.

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123. RECOVERY OF TAX FROM ASSETS OF CERTAIN DISPOSITIONS

(1) So much of any tax due and payable by a disponer as is

attributable to income accrued under a disposition, but charged

to tax in the name of the disponer under sections 14, 15(5) or

16, may be recovered from the assets of the disposition.

(2) For the purposes of subsection (1), the tax attributable to

income considered to have accrued to a disponer under sections

14, 15(5) or 16, means the amount by which the tax charged

under section 80 has been increased by the inclusion of such

income in the assessable income of the disponer.

(3) Where income is considered to have accrued to the disponer

under 2 or more dispositions the amount ascertained under

subsection (2) is to be apportioned between those dispositions

in such proportions as the chargeable income of each such

disposition bears to the total chargeable income of all such

dispositions.

124. RECOVERY OF TAX FROM REPRESENTATIVE TAXPAYER

(1) Where any individual dies, then in respect of any tax payable

under an assessment—

(a) made upon him or her prior to and remaining unpaid at

his or her death;

(b) made upon his or her executor under section 17 in respect

of income accrued to his or her death; or

of income accrued after death to the estate of the deceased

person,

the amount of tax unpaid by that person in his or her lifetime or

payable under an assessment made on his or her executor is a

debt due and payable out of the estate of the deceased person.

(2) Where a company is being wound up, then in respect of any tax

payable under an assessment—

(a) made upon the company, prior to and remaining unpaid at

the commencement of the liquidation;

(b) made upon the liquidator in respect of income accrued

prior to commencement of the liquidation; or

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during the winding up of the company, the amount of tax

unpaid by the company or payable by the liquidator is a

debt due and payable out of the assets of the company.

(3) Where any person is chargeable to tax under section 15(1) as

trustee of a trust to the income of which there is no beneficiary

immediately entitled, then any tax payable by the trustee is due

and payable out of the assets of the trust.

(4) Where any person is chargeable to tax under sections 19 or 20

as trustee for an incapacitated or an insolvent person, any tax

payable by the trustee is due and payable out of the assets of

that person.

(5) Where any person is chargeable to tax under section 22 as agent

for a non-resident, any tax payable is due and payable out of the

assets in Saint Lucia of the non-resident.

125. RIGHT OF REPRESENTATIVE TAX PAYER TO INDEMNITY

Every person who, as a representative taxpayer, pays any tax is

entitled to recover the amount paid from the person on whose behalf

it was paid or to retain out of any moneys that may be in his or her

possession, or may come to him or her, in his or her representative

capacity, an amount equal to the amount paid.

126. PERSONAL LIABILITY OF REPRESENTATIVE TAXPAYERS

(1) Every representative taxpayer is personally liable for any tax

payable by him or her in his or her representative capacity if,

while it remains unpaid—

(a) he or she alienates, charges or disposes of any income in

respect of which the tax is charged; or

(b) he or she disposes of or parts with any assets or money

which is in his or her possession or comes to him or her

after the date on which the tax is due and payable,

if the tax could legally have been paid out of such income,

assets or money.

(2) Every trustee, curator, liquidator, tutor or executor, is

personally liable for the payment of any tax if, before

distributing any assets under his or her control to the persons

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entitled thereto, he or she fails to obtain from the Comptroller a

certificate showing that all tax which may be recovered from

such assets has been paid.

127. RECOVERY OF TAX FROM PERSONS HOLDING MONEY FOR ANOTHER PERSON

(1) For the purposes of recovery of any tax due and payable by any

person, the Comptroller may, by notice in writing, declare any

other person—

(a) from whom any money is due or may become due to the

first mentioned person;

(b) who holds or may subsequently hold money for or on

account of the first mentioned person;

payment to the first mentioned person; or

(d) who has authority from some other person to pay money

to the first mentioned person,

to be the agent of that person and to pay to the Comptroller

within 15 days of the date of service of the notice, or if on such

date no money is due or held to which this subsection applies,

within 15 days of the date on which money becomes due or is

held in any of the circumstances referred to in this subsection,

the amount specified in the notice or, if the money due or held

is less than the amount specified, the whole amount of the

money due or held.

(2) The payment of any money to the Comptroller by any person

under subsection (1) shall to the extent of such payment

constitute the discharge of the original liability of that person to

the person from whom tax was due and payable to the

Comptroller.

(3) Where any person, declared to be an agent under subsection (1),

fails to make any payment within the time specified in a notice

under that subsection, the provisions of this Act shall apply as if

each amount were tax due and payable by the person declared

to be an agent on the date by which he or she was required to

make such payment to the Comptroller.

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128. PRIORITY OF TAX DEBT UPON BANKRUPTCY OR LIQUIDATION

Despite anything contained in any other enactment—

(a) the trustee in bankruptcy of an individual; or

(b) the liquidator of a company which is being wound up,

shall apply the assets of the bankrupt individual or the company, as

the case may be, in payment of tax due under this Act or under the

previous Act (whether assessed before or after the date of bankruptcy

or commencement of winding up) as a privileged debt in priority over

all debts of that individual or company, except law costs and any

wages which constitute a privileged debt under the Protection of

Wages Act.

129. REFUND OF TAX OVERPAID

(1) Where the Comptroller is satisfied that any person has paid tax

for any year of income, by deduction or otherwise in excess of

the amount finally determined to be payable under this Act for

such year of income, that person shall subject to section 100, be

entitled to have the amount of the excess refunded.

(2) Despite subsection (1), where any tax is due and payable and

unpaid in respect of any other year of income or any tax,

interest or penalty is due and payable and unpaid under any

other Act under the administration or management of the Inland

Revenue Department the Comptroller, instead of refunding the

amount of the excess, may apply such excess towards such

other unpaid tax and shall notify the person accordingly.

(3) Subject to section 113(8) any refund of tax due and payable

under subsection (1) which is not paid 6 months after the date

of assessment shall bear interest at the rate of 4% per year for

the additional period during which it remains unpaid.

(2) Subsection (3) shall apply to income tax returns filed with the

Comptroller of Inland Revenue for the income year 1998 and

succeeding income years.

(Acts 11 of 1998 and 9 of 2001)

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130. REMISSION OF TAX

(1) The Cabinet may exempt or remit wholly or in part any tax

payable by any person where it is satisfied that it is just and

necessary to do so.

(2) Any decision made under subsection (1) is final and not subject

to appeal.

(3) The Comptroller may remit any amount of tax unpaid by any

person in respect of any year of income, whether before or after

the commencement of this Act, where he or she is satisfied—

(a) that such tax is irrecoverable by operation of law;

(b) that the cost of collection of such tax would exceed the

amount outstanding; or

higher amount as may be specified in Regulations made

by the Minister.

(4) In this section ―tax‖ includes amounts of interest or penalty.

(5) In exercising his or her powers under subsection (3)(a), the

Comptroller shall consult with the Minister.

(Amended by Act 9 of 2001)

PART 13 OFFENCES

Division 1 – Civil Penalties

131. PENALTIES: GENERAL

(1) The penalties imposed by this Division of this Part shall be in

addition to any right to institute criminal proceedings against

any person for an offence under this Act, and any fine payable

on conviction for an offence is in addition to the penalties

provided herein.

(2) The penalties imposed by this Division of this Part are in

addition to any interest payable under section 115 or 117 of this

Act. (Inserted by Act 9 of 2001)

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(3) For the purposes of this Division, where under this Act, tax is

expressed to be due and payable on or before, or by, a specified

date the due date is considered to be such specified date.

132. PENALTIES: FAILURE TO FURNISH RETURN OF INCOME

Where any person, who is liable to furnish a return of income for any

year of income, fails to do so within the prescribed time or any

extended time allowed under section 96, he or she is liable to a

penalty not exceeding 5% of the amount of tax charged for that year

of income.

133. PENALTIES: FAILURE TO FURNISH CORRECT RETURN OF INCOME

(1) Where any person fails to furnish a correct return of income for

any year of income by reason of—

(a) his or her failure to disclose any assessable income

accrued to him or her from any source;

(b) the deduction or set off by him or her of any amount

which is not allowable as a deduction or set off;

amount which was not expended or lost; or

(d) his or her failure to disclose any fact, the disclosure of

which would result in an increase in his or her liability to

tax,

he or she is liable to a penalty in accordance with subsections

(2) or (3).

(2) Where the incorrectness of the return of income or the

information was attributable to—

(a) neglect or carelessness, he or she is liable to a penalty not

exceeding the amount of tax which would have been lost

if he or she had been assessed on the basis of the incorrect

return or information furnished by him or her; or

(b) fraud or wilful default, he or she is liable to a penalty not

exceeding twice the amount of tax which would have

been lost if he or she had been assessed on the basis of the

incorrect return or information furnished by him or her.

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(3) If, for any year of income, determination of the chargeable

income of any person results in an assessed loss, and the

amount of such loss is less than it would have been if it had

been calculated on the basis of the return of income or

information furnished by him or her by reason of any of the

circumstances specified in subsection (1) and such incorrectness

of the return or information was due to neglect, carelessness,

fraud or wilful default, he or she is liable to a penalty not

exceeding 10% of the difference between those amounts.

134. PENALTIES: FAILURE TO PAY TAX BY DUE DATE

(1) Where any person fails to pay tax, being the whole or part of—

(a) an instalment of tax due and payable under section 113; or

(b) the remainder of any tax charged under section 114,

by the due date he or she is liable to a penalty of 10% of the

amount of such tax.

(2) The penalty imposed by this section is in addition to any

interest payable under section 115.

135. PENALTIES: FAILURE TO DEDUCT TAX OR ACCOUNT FOR TAX DEDUCTED

(1) Where any person who is required by this Act to deduct tax

from the income of, or payments to some other person under

sections 53(5), 63(14), 76, 77, or 78, fails to deduct such tax or

to account to the Comptroller for any tax so deducted, he or she

is liable to a penalty of 10% of the tax which should have been

deducted or for which he or she has failed to account.

(2) The penalty imposed by this section is in addition to any

interest payable under section 117 and any personal liability

which might exist in relation to such tax.

136. PENALTIES: FAILURE TO COMPLY WITH NOTICE TO GIVE INFORMATION, PRODUCE DOCUMENTS OR GIVE EVIDENCE TO COMPTROLLER

Where any person fails within the specified time to comply with a

notice issued under section 87(1) requiring him or her to—

(a) furnish returns or information under paragraph (a);

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(b) produce books of account or documents under paragraph

(b); or

(c),

of that section, whether in relation to himself or herself or any other

person he or she is liable to a penalty not exceeding $500.

137. NOTICE OF INTENTION TO IMPOSE PENALTY TO BE GIVEN

Where any penalty is contemplated under section 136, prior to its

imposition, the Comptroller shall notify the person concerned—

(a) as to the nature of the breach of the Act which has

occurred; and

(b) as to the amount of penalty which it is proposed to

impose,

and shall afford that person the opportunity of being heard thereon

within such period as may be specified in the notice.

Division 2 – Criminal Proceedings

138. SANCTION FOR PROSECUTION

(1) Subject to the powers of the Director of Public Prosecutions

under section 85 of the Constitution criminal proceedings in

respect of any offence under this Act shall not be commenced

except with the sanction of the Comptroller.

(2) Criminal proceedings under this Act shall be commenced in the

name of the Comptroller.

139. OFFENCES: BREACH OF SECRECY

Any person appointed under or employed in carrying out the

provisions of this Act who, in contravention of the oath or declaration

of secrecy made by him or her under section 6—

(a) discloses to any unauthorised person any document,

information or confidential instruction which has come

into his or her possession or to his or her knowledge in

the course of his or her duties; or

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(b) permits any unauthorised person to have access to any

records in the possession or custody of the Comptroller,

commits an offence and is liable summarily to a fine of $1,000 or to

imprisonment for one year.

140. OFFENCES: FAILURE TO COMPLY WITH REQUIREMENTS OF THE ACT

(1) Any person who—

(a) fails or neglects to furnish to the Comptroller any return

or document as and when required under this Act;

(b) fails to comply with the requirements of any notice in

writing served on him or her under this Act;

put to him or her or to supply any information required

from him or her in relation to his or her assessable income

or the assessable income of any other person;

(d) fails to keep a proper record of his or her transactions or

to preserve any books of account or documents as

required under section 90;

(e) fails to disclose in any return of income made by him or

her any assessable income accrued to him or her or any

material facts which should have been disclosed;

(f) signs any return or document rendered to the Comptroller

without reasonable grounds for believing that return or

document or any part thereof to be correct; or

(g) obstructs or hinders any person appointed or employed

under this Act in the discharge of his or her duties,

commits an offence and is liable summarily to a fine of $1,000

or to imprisonment for one year.

(2) Every person who, having been convicted under subsection (1)

of failing to do anything required to be done by him or her

under this Act, fails within any further period specified by the

Comptroller in a notice served on him or her, to comply with

the requirements of that notice, commits a further offence and is

liable summarily for each day during which the offence

continues to a fine of $50 or to imprisonment for one month.

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141. OFFENCES: INTENT TO EVADE LIABILITY TO TAX

(1) Any person who, wilfully and with intent to evade assessment

or liability to tax—

(a) makes, causes or allows to be made any incorrect

statement in any return lodged under this Act;

(b) signs any document or any return lodged under this Act

having reason to believe the contents of such document or

return or any part thereof to be incorrect;

request for information made by the Comptroller;

(d) prepares or maintains any incorrect books of account or

other records or falsifies any books of account or other

records;

(e) authorises the preparation or maintenance of any incorrect

books of account or other records; or

(f) makes use of or authorises the use of any fraud whatever,

commits an offence and is liable summarily to a fine of $2,000

or to imprisonment for 2 years.

(2) In any proceedings under this section, if it is proved that any

incorrect statement or entry is wilfully made in any return,

document, answer, books of account or other records by any

person, he or she shall be presumed, until the contrary is

proved, to have made, caused or allowed to be made that

incorrect statement or entry with intent to evade assessment or

liability to tax.

142. OFFENCES: DEDUCTION OF WITHHOLDING TAX AND TAX FROM PAYMENTS TO CONTRACTORS

Any person who—

(a) fails to deduct withholding tax from a payment—

(i) to a non-resident, to which section 76 and Schedule

3 apply,

(ii) to any person, to which sections 53(5) or 63(14)

apply;

(b) fails to deduct tax from a payment to a contractor, to

which section 78 applies; or

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any amount deducted in accordance with the provisions

referred to in paragraphs (a) and (b),

commits an offence and is liable on summary conviction to a fine of

$1,000 or to imprisonment for one year.

143. OFFENCES: BY EMPLOYERS OR EMPLOYEES

(1) Any person who—

(a) being an employer—

(i) within the prescribed time, fails to register as an

employer, or to notify any change of address or to

notify that he or she has ceased to be an employer,

(ii) within the prescribed time, fails to deduct any

amount of tax from remuneration paid to an

employee,

(iii) within the prescribed time, fails to pay to the

Comptroller any amount of tax deducted from

remuneration paid to an employee,

(iv) fails to comply with any direction issued by the

Comptroller under Schedule 4,

(v) fails to maintain a record of remuneration paid to

his or her employees and tax deducted therefrom,

(vi) within the prescribed time, fails to deliver to any

employee a certificate of tax deducted from

remuneration,

(vii) within the prescribed time, fails to furnish to the

Comptroller an annual return of tax deductions and

remittances; or

(b) being an employee, within the prescribed time, fails to

lodge the further declaration required by paragraph

3(5)(b) of Schedule 4 upon ceasing to be entitled to any of

the deductions or allowances claimed by him or her in a

declaration previously furnished by him or her in respect

of that year of income,

commits an offence and is liable on summary conviction to a fine of

$1,000 or to imprisonment for one year.

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144. OFFENCES: EVASION OF TAX IN RELATION TO DEDUCTION OF TAX BY EMPLOYER

(1) Any person who wilfully with intent to evade assessment or

liability to tax—

(a) furnishes to his or her employer or to the Comptroller an

incorrect declaration of personal particulars or other

information in relation to any matter affecting the amount

of tax to be deducted from his or her remuneration;

(b) issues, uses or causes to be issued or used any certificate

of remuneration and tax deducted which is incorrect;

issued by any other person;

(d) pretends to be the employee named in any such certificate

or in any other way to his or her own advantage or benefit

obtains credit with respect to or payment of the whole or

any part of any amount of tax deducted from

remuneration received by any other person; or

(e) not being an employer and without being authorised by

any person who is an employer, issues or causes to be

issued any document purporting to be a certificate of

remuneration and tax deducted,

commits an offence and is liable on summary conviction to a

fine of $2,000 or to imprisonment for 2 years.

(2) In any proceedings under this section, if it is proved that any

incorrect statement or entry is wilfully made in any return,

document, answer, books of account or other records by any

person, he or she shall be presumed, until the contrary is

proved, to have made, caused or allowed to be made that

incorrect statement or entry with intent to evade assessment or

liability to tax.

(3) In this section the words ―employer‖, ―remuneration‖ and

―employee‖ shall have the meaning given to them in Schedule

145. AIDING OR ABETTING AN OFFENCE

(1) Where any person—

(a) wilfully makes or furnishes on behalf of another person;

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(b) aids or abets another person to make or deliver,

an incorrect return, document, statement or any incorrect

information relating to any matter affecting the tax liability of

that other person, the first mentioned person commits an

offence and is liable to a fine of $1,000 or to imprisonment for

one year.

(2) Where any person wilfully and with intent to assist any other

person to evade assessment or liability to tax does any of the

matters referred to in section 141 or 144, he or she commits an

offence and is liable on summary conviction to a fine of $2,000

or to imprisonment for 2 years.

(3) In any proceedings under subsection (2), if is proved that any

incorrect statement or entry is wilfully made in any return,

document, answer, books of account or other records by such

person, he or she is presumed, until the contrary is proved, to

have made such incorrect statement or entry with intent to assist

such other person to evade assessment or liability to tax.

146. MITIGATION OF PENALTIES AND COMPOUNDING OF OFFENCES

(1) Where any person commits a breach of the provisions of this

Act for which a penalty is provided under Division 1 of this

Part, then in relation to such breach, the Comptroller may

mitigate any penalty either wholly or in part.

(2) Subject to the powers of the Director of Public Prosecutions

under section 85 of the Constitution, where any person commits

an offence against this Act for which criminal proceedings may

be taken under Division 2 of this Part, then in relation to such

offence, the Comptroller may, at any time prior to the

commencement of the hearing by any court of such

proceedings, compound the offence and order the person to pay

such sum of money as the Comptroller may think fit but not

exceeding the maximum amount specified in Division 2 for

such offence.

(3) The Comptroller shall not exercise his or her power to

compound under subsection (2) unless the person who has

committed the offence requests the Comptroller in writing to so

deal with the offence.

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(4) Where the Comptroller compounds any offence under this

section and makes an order accordingly—

(a) the order shall be made in writing and there shall be

attached to it the request made under subsection (3);

(b) the order shall specify the offence committed, the amount

ordered to be paid and the date on which payment is to be

made;

Prosecutions and to the person who committed the

offence, and the latter person shall not be liable to any

criminal proceedings in respect of the offence;

(d) the order shall be final and not subject to any appeal;

(e) the amount ordered to be paid shall be recoverable as if it

were tax due and payable.

147. TIME LIMITS FOR PROCEEDINGS TO BE TAKEN

(1) Where the offence alleged involved the doing of any act,

proceedings under this Division may be commenced within 3

years after the discovery of the act.

(2) Where the offence alleged involved the failure to do any act,

proceedings under this Division may be commenced within 3

years after the date of such failure.

(3) Where the offence alleged involved the non-disclosure or

incorrect disclosure by any person of any income or

information relating to that person‘s liability to tax,

Proceedings under this Division may be commenced within 3

years after his or her correct liability to tax has become final in

respect of the year of income to which the offence relates.

PART 14 MISCELLANEOUS

148. FORMS OF NOTICES AND RETURNS

(1) Subject to this Act, the Comptroller may approve the form of

any notice, return of income or other return required for the

purposes of this Act, and where any form has been so approved

such form of notice or return shall be used for such purposes.

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(2) Any notice given by the Comptroller under this Act may be

signed by the Comptroller or any officer not being below the

rank of a senior tax inspector authorised by him or her in that

behalf and any notice purporting to be signed on behalf of the

Comptroller shall, unless the contrary is proved, be presumed to

have been signed by an officer so authorised.

(3) Every form, notice or other document issued, served or given

by the Comptroller under this Act is sufficiently authenticated if

the name or title of the Comptroller or the name or title of the

officer authorised in that behalf, is printed, stamped or written

thereon.

149. SERVICE OF NOTICES OR DOCUMENTS

(1) Where, under this Act, any notice or other document is required

or authorised to be served on or given to any person by the

Comptroller, such notice or other document is sufficiently

served—

(a) in the case of a person other than a company, a body of

persons or a partnership if—

(i) personally served on him or her,

(ii) left at his or her address for service of notices, or

(iii) sent by post to such address for service of notices;

(b) in the case of a company if—

(i) personally served on the principal officer of the

company,

(ii) left at or sent by post to the company‘s address

appointed under section 92 for service of notices

under this Act, or

(iii) where no address for service of notices has been

appointed, left at or sent by post to any office or

place of business of the company;

(i) personally served on the precedent partner or agent

of the partnership,

(ii) left at or sent by post to the partnership‘s address

appointed under section 93 for service of notices

under this Act, or

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(iii) where no address for service of notices has been

appointed, left at or sent by post to any office or

place of business of the partnership;

(d) in the case of a body of persons if left at or sent by post to

the address for service of notices of that body.

(2) Where any notice is served on any person—

(a) requiring the personal attendance of that person before the

Comptroller, under section 87; or

(b) appointing that person the agent of some other person for

the payment of tax, under section 127,

the provisions of subsection (1) relating to service by post shall

be construed as service by registered post.

(3) Any notice served by post in accordance with this section is

considered to be served, in the case of—

(a) a person resident in Saint Lucia, 7 days; and

(b) a non-resident, 30 days,

after the date upon which such notice was posted.

150. CHANGE OF ADDRESS FOR SERVICE OF NOTICE

(1) Every person who has given an address for service of notices,

whether in a return of income or otherwise and who

subsequently changes such address shall, within one month

after such change, notify the Comptroller in writing of his or

her new address for service of notices.

(2) The address for service of notice last given to the Comptroller

by any person shall, for all purposes of the Act, be his or her

address for service of notices.

(3) Where no address for service of notices has been given, or

where the Comptroller‘s records disclose that any person has

changed his or her address and has failed to notify the

Comptroller of such change, then the address of such person as

described in any record in the Comptroller‘s possession is a

sufficient address for service of notices.

(4) In any criminal proceedings which may be taken for failure to

furnish a return of income against any person liable to furnish

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such a return it shall be no defence by such person that he or

she has not received from the Comptroller—

(a) a form for the return of income; or

(b) any notice calling upon him or her to furnish such return.

(5) In any criminal proceedings which may be taken against any

person for failure to comply with any other request or notice by

the Comptroller it shall be no defence by such person (who has

failed to notify the Comptroller of a change of address) that he

or she has used a different address in any correspondence with

or application to the Comptroller after such change of address

has occurred.

151. REGULATIONS

The Minister may make regulations for the better carrying out of the

purposes of this Act and, without prejudice to the generality of the

foregoing, such regulations may provide for—

(a) the collection of tax by instalments or by means of

deductions made from emoluments or other income;

(b) the conditions under which persons chargeable to tax may

leave or may be prevented from leaving Saint Lucia and

for the issue of exit certificates showing that tax has been

paid or that satisfactory arrangements have been made;

at such times as may be prescribed;

(d) the periods during which companies are required to

submit returns;

(e) matters which are required or permitted to be prescribed;

(f) the imposition by a court of summary jurisdiction of—

(i) a fine not exceeding $500, or

(ii) a term of imprisonment not exceeding 3 months,

for any breach of the regulations;

(g) appeals to the appeal commissioners against decisions of

the Comptroller made under the regulations; and

(h) any other matters or things whether similar or not to those

above mentioned in respect of which it may be expedient

to make regulations for the purposes of this Act.

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152. AMENDMENT OF SCHEDULES AND RATES SPECIFIED IN THE ACT

(1) Subject to subsection (2) the Minister may by order made by

statutory instrument published in the Gazette—

(a) amend the Schedules;

(b) increase, delete, reduce, vary or make changes to the rates

of tax specified in Schedule 5 and Schedule 6 or in any

other provision of the Act; or

(2) An order made under subsection (1) is subject to negative

resolution of Parliament.

153. SAVING

(1) The regulations made under the previous Act, remain in force

until revoked by regulations made under this Act.

(2) The repeal of the previous Act does not affect any liability to

tax or any obligation arising in respect of any year of income or

assessment prior to the commencement of this Act for which

purpose the previous Act and subsidiary legislation, subject to

subsections (3) and (4) continue in force.

(3) Where any objection or appeal is made or is still undetermined

in relation to any matter arising under the previous Act, the

provisions of Part 11 apply.

(4) In relation to the recovery of any tax, penalty or interest

becoming due and payable under the previous Act the

provisions of sections 121 to 130 apply.

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SCHEDULE 1

(Section 33)

VALUE OF TRADING STOCK

1. VALUE OF TRADING STOCK TO BE INCLUDED IN RETURN OF INCOME

Every person carrying on business shall include in his or her return of

income for each year of income the value of all trading stock held and

not disposed of (hereinafter referred to as ―the value of trading stock

held‖) at the beginning and end of that year of income.

2. VALUE OF TRADING STOCK AT BEGINNING OF INCOME YEAR

The value of trading stock held by any person at the beginning of any

income year is considered to be—

(a) where he or she carried on the business on the last day of

the previous income year, the value of trading stock held

on that date; or

(b) where he or she commenced business during the year of

income, the cost price to him or her of any trading stock

acquired prior to the commencement of the business.

3. VALUE OF TRADING STOCK AT END OF INCOME YEAR

The value of trading stock held by any person at the end of any

income year is considered to be the cost price to him or her unless the

Comptroller is satisfied that the estimated realisable value of such

stock to such person is less than cost.

4. VALUE OF TRADING STOCK ON CESSATION OF BUSINESS

Where any person ceases to carry on business but does not dispose of

his or her trading stock at the time of cessation, such trading stock

shall be brought to account at its estimated realisable value to him or

her.

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5. COST PRICE OF TRADING STOCK

For the purposes of this Schedule but subject to paragraph 6, the cost

price of any trading stock is—

(a) the cost incurred in acquiring such trading stock; and

(b) any further costs incurred in getting such trading stock

into its then existing condition or location.

6. DEEMED VALUE OF CERTAIN TRADING STOCK

Where any trading stock has been acquired or disposed of by of any

person—

(a) for consideration which cannot be valued;

(b) not in the ordinary course of business; or

such trading stock is considered to be acquired or disposed of at an

amount equal to the price which, in the opinion of the Comptroller,

was the current market price of such stock on the date of such

acquisition or disposal.

7. ADJUSTMENTS TO BE MADE WHERE TRADING STOCK INCORRECTLY VALUED

Where, for any year of income, the Comptroller is of the opinion that

the value of trading stock held does not comply with the basis of

valuation specified in this Schedule, the value of trading stock held—

(a) at the beginning of the income year shall remain

unaltered; and

(b) at the end of that income year shall be adjusted to comply

with paragraph 3.

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SCHEDULE 26

(Sections 26, 27, 33, 38 and 40)

CAPITAL ALLOWANCES

PART 1 BUILDINGS

1. ANNUAL ALLOWANCES

(1) In ascertaining the assessable income of any person for any year

of income from the carrying on by that person or by a lessee

from that person of any qualifying business (within the meaning

of paragraph 3), there shall be deducted in respect of any

building used for the purposes of such qualifying business

carried on by that person or lessee an annual allowance of—

(a) an amount equal to 5% of the written down value of the

building, not being a commercial building, at the end of

the immediately preceding income year;

(b) in case of a commercial building, an amount equal to

2.5% of the written down value of the building at the end

of the immediately preceding income year.

(Substituted by Act 15 of 2003)

(2) For the purposes of this paragraph the written down value of a

building at the end of a year of income means—

(a) in the case of the first year of income in which the

building is used, the cost of such building less the annual

allowance allowed in respect of such building for that

year of income; and

(b) in the case of subsequent years in which the building is

used, the written down value at the end of the income year

for the immediately preceding year of income less the

amount of the annual allowance on such building for the

year of income.

(3) Where a building commences to be used for the first time in a

year of income the written down value for that year of income

for the purposes of this paragraph shall be—

6 Amendments to Schedule 2 by Act 15 of 2003 takes effect in respect of income year

2002. See section 5(2) of Act 15 of 2003.

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(a) where the building is a newly erected or purchased

building, the cost of erection or purchase thereof;

(b) where the building is an existing building which has been

used for purposes other than the carrying on of a

qualifying business, the cost thereof less notional

allowances calculated in accordance with subparagraph

(1) in respect of each year during which the building has

been owned.

(4) Where a building was in use for the purposes of a qualifying

business on the last day of the year of income 1988, the written

down value ascertained in accordance with the provisions of the

previous Act apply.

(5) Where a building in respect of which deductions have been

allowed under this paragraph ceases to be used for the purposes

of a qualifying business for one or more years of income but

subsequently commences to be used for such purposes or is

disposed of, notional annual allowances calculated in

accordance with subparagraph (1) shall be calculated for each

year during which the building was not used for business

purposes in order to ascertain—

(a) the written down value of the building in relation to

subsequent years of income; or

(b) the adjusted cost of the building for the purposes of

paragraph 2.

2. DISPOSAL OF BUILDING

(1) Where allowances have been granted to any person for previous

years of income, whether before or after the coming into

operation of this Act, in respect of a building and that building

is disposed of in any year of income, a balancing allowance or a

balancing charge shall be made as provided in this paragraph.

(2) Where the cost, or the adjusted cost of a building exceeds the

aggregate of—

(a) the allowances granted for previous years of income; and

(b) the disposal value;

the amount of such excess (referred to in this Act as ―a

balancing allowance‖) shall be allowed as a deduction for the

year of income in which the building is disposed.

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(3) Where the disposal value of a building exceeds the difference

between—

(a) the cost, or the adjusted cost, of such building; and

(b) the allowances granted for previous years of income,

the amount of such excess (referred to in this Act as ―a

balancing charge‖) shall be included in the assessable income of

the person disposing of the building for the year of income in

which the building is disposed.

(4) For the purposes of this Part, the adjusted cost of a building

means the cost of erection or purchase thereof less the amount

of any notional allowances under paragraph 1(3) or 1(5), in

respect of any year of income during which the building was

used other than for qualifying business purposes.

(5) Where a person has been granted allowances in respect of a

building, and such person ceases to carry on business prior to

the disposal of such building, for the purposes of this paragraph

he or she shall be subject to the provisions of this paragraph in

the event of the subsequent disposal of the building.

3. MEANING OF BUILDING

(1) For the purposes of this Part, a building means a building used

for the purposes of carrying on any qualifying business, and

includes a building provided by way of welfare facilities for

employees but does not include a building used for residential

purposes. (Substituted by Act 15 of 2003)

(2) Where part only of a building is used for the purposes of a

qualifying business, and the capital expenditure on that part of

the building which is not so used—

(a) does not exceed 11% of the total capital expenditure the

whole of the building is considered to be used for the

purposes of a qualifying business;

(b) exceeds 11% but does not exceed 75% of the total capital

expenditure, then the portion of such expenditure

qualifying for deduction under this Part is such proportion

of such expenditure as the part of the building so used for

the purposes of a qualifying business bears to the entire

building;

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Revision Date: 31 Dec 2008

be used for the purposes of a qualifying business.

(3) For the purposes of this Part a ―qualifying business‖ means—

(a) a business carried on in a commercial building, mill,

factory or similar premises for the manufacture of goods

or materials or their subjection to any industrial

process;(Substituted by Act 15 of 2003)

(b) the operation of a dock or a water or electricity

undertaking;

(d) the catching or taking of fish including shell fish; or

(e) a business of agriculture, including horticulture and the

use of land for the purposes of husbandry including the

keeping or breeding of livestock and poultry or the

growing of crops of fruits or vegetables.

(f) a commercial undertaking or trade, except an undertaking

or trade determined to be an approved Tourism project as

defined by the Tourism Incentive Act, or any enactment

replacing it. (Inserted by Act 15 of 2003)

PART 2 PLANT AND MACHINERY

1. ANNUAL ALLOWANCES

(1) In ascertaining the chargeable income of any person for any

year of income there shall be deducted an annual allowance in

respect of expenditure incurred, whether before or after the

commencement of this Act, on the provision of plant and

machinery acquired and brought into use by that person for the

purpose of producing assessable income.

(2) The deduction allowable shall, subject to subparagraph (3), be

an amount equal to the following percentages of—

(a) the cost of the plant and machinery, in the case of the year

of income in which the plant and machinery was first

brought into use; and

(b) the written down value of the plant and machinery at the

end of the income year for the immediately preceding

132 Cap.15.02 Income Tax Act Laws of Saint Lucia

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year of income in the case of subsequent years of

income—

(i) Agricultural plant and machinery—

(A) electrical, including meters 15%

(B) spraying equipment 15%

(ii) Aerated beverage plant—

(A) Electrical 15%

(B) Steam 10%

(iii) Aircraft, parts and equipment 33 1/3%

(iv) Bakery plant and machinery 15%

(v) Bicycles 25%

(vi) Block and brick manufacturing plant and

machinery 15%

(vii) Cigarette manufacturing machinery 15%

(viii) Cinematograph—

(A) Machinery (projectors) 20%

(B) Electrical appliances including

fans and public address systems 15%

(ix) Clothing Trade—

(A) Steam boilers, engines and similar

plant and machinery 10%

(B) General Machinery including

sewing machines 15%

(x) Copra crushing and refining plant 15%

(xi) Cranes and hoists 15%

(xii) Diesel engines and motors 15%

(xiii) Electricity undertakings—

(A) Generating plant 15%

(B) Mains 10%

and transformers 10%

(xiv) Electrical lifts 15%

(xv) Engineering workshops—

(A) Electrical equipment 15%

(B) Heavy plant 10%

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(D) Welding plant, tools and

instruments 15%

(xvi) Furniture Workshops—

(A) Electrical equipment 15%

(B) Other 15%

(xvii) Furniture 15%

(xviii) Garages—

Gasoline and Kerosene tanks and

pumps 10%

(xix) Gas—

(A) Gas holders or containers 10%

(B) Other plant 10%

(xx) Ice manufacture and Cold stores—

(A) Electrical plant and insulation 15%

(B) Refrigeration machinery,

compressors, condensers, tanks,

etc. 15%

(xxi) Laundry and dry cleaning—

(A) Steam boilers, engines and similar

plant and machinery 10%

(B) General machinery 15%

(xxii) Motor cars, lorries, omnibuses, vans,

jeeps, tractors, trucks, land rovers 25%

(xxiii) Motor cycles 25%

(xxiv) Neon signs 15%

(xxv) Office appliances: Accounting, adding,

calculating, cash registers and

duplicating and copying machines,

typewriters 15%

(xxvi) Oil tanks and pumps 10%

(xxvii) Photographic equipment 15%

(xxviii) Printing—

(A) Plant and machinery 10%

(B) Type 15%

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(D) Computer software 33 1/3%

(xxix) Pumps—

(A) Electric 15%

(B) Other 10%

(xxx) Radio equipment—

(A) Amplifiers and receivers 15%

(B) Lines and speakers 10%

(xxxi) Refrigeration, deep freeze and

refrigeration cabinets 15%

(xxxii) Rum plant and breweries: Boilers,

pumps, stills and vats 10%

(xxxiii) Stoves 15%

(xxxiv) Scales 10%

(xxxv) Shipping: Launches, lighters, canoes and

sail boats 15%

(xxxvi) Traction and hauling equipment 25%

(xxxvii) Trailers 15%

(xxxviii) Timber merchants—

(A) Saw milling machinery and

electrical motors 15%

(B) Steam engines and boilers 10%

(xxxix) Waterworks: Appliances and apparatus

used for storage, purification,

conveyance, measurement or regulation

of water 10%

(xl) Plant and machinery not elsewhere

specified 15%

(3) Where the Comptroller is satisfied that by reason of the use of

plant and machinery on multiple shift work or in other

circumstances of abnormal wear and tear, he or she may

authorise the deduction of such higher rate of allowance than is

provided by subparagraph (2) as appears to him or her to be

reasonable in the circumstances.

(4) For the purposes of this paragraph the written down value of

any plant and machinery at the end of the year of income

means—

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Revision Date: 31 Dec 2008

(a) in the case of the first year of income in which the plant

and machinery is acquired, the cost of such assets less the

annual allowance, allowed in respect of such assets for

that year of income;

(b) in the case of subsequent years the written down value at

the end of the income year for the immediately preceding

year of income less the annual allowance allowed in

respect of such assets for that year of income.

(5) Where expenditure had been incurred prior to the

commencement of this Act, the written down value at the end of

year of income 1987 ascertained in accordance with the

previous Act shall apply for the purposes of subparagraph

(4)(b).

2. DISPOSAL OF PLANT AND MACHINERY

(1) Where allowances have been granted to any person for previous

years of income, whether before or after the coming into

operation of this Act, in respect of plant and machinery and any

such asset is disposed of in any year of income, a balancing

allowance or a balancing charge shall be made as provided in

this paragraph.

(2) Where the cost of the asset exceeds the aggregate of—

(a) the allowances granted for previous years of income; and

(b) the disposal value,

the amount of such excess (referred to in this Act as ―a

balancing allowance‖) shall be allowed as a deduction for the

year of income in which the asset is disposed of.

(3) Where the disposal value of the asset exceeds the difference

between—

(a) the cost of the asset; and

(b) the allowances granted for previous years of income,

the amount of such excess (referred to in this Act as ―a

balancing charge‖) is to be taken into account in ascertaining

the assessable income of the person disposing of the asset for

the year of income in which the asset is disposed of.

(4) Where a person has been granted allowances in respect of any

plant and machinery and such person ceases to carry on

136 Cap.15.02 Income Tax Act Laws of Saint Lucia

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business prior to the disposal of such asset, for the purposes of

this paragraph he or she shall be subject to the provisions of this

paragraph in the event of the subsequent disposal of such plant

and machinery.

3. REPLACEMENT PROPERTY

(1) Where but for this paragraph the amount of any balancing

charge would be taken into account in ascertaining the

assessable income of any person for a year of income, that

person may elect, by notice in writing given to the Comptroller

when furnishing his or her return of income for that year and

that in lieu of the balancing charge being so taken into account

it may be deducted, subject to subparagraphs (2) and (3), from

expenditure incurred on any plant and machinery (hereinafter

referred to as ―the replacement property‖) acquired by him or

her during the year of income to replace the plant and

machinery disposed of.

(2) Where an election is made under this paragraph the expenditure

incurred on the replacement property is to be reduced by the

amount of the balancing charge referred to in subparagraph (1)

for the purpose of determining the written down value of the

replacement property and the annual allowances applicable, but

nothing herein affects the calculation of any balancing

allowance or balancing charge by reference to the full amount

of the expenditure incurred and the reduction of balancing

charge made by subparagraph (1) in the event of the subsequent

disposal of the replacement property.

(3) Where an election is made under this paragraph in relation to

the disposal of an asset giving rise to a balancing charge which

exceeds the cost of the replacement property—

(a) no annual allowance shall be granted in respect of the

replacement property; and

(b) the amount of the excess shall be included in the

assessable income of the person disposing of the asset for

the year of income in which the asset is disposed.

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PART 3 AGRICULTURAL EXPENDITURE

1. DEDUCTION ALLOWED

Subject to this Part, where any person who is not exempt from tax

under section 25 in respect of income from agriculture incurs capital

expenditure on any agricultural works there is to be allowed as a

deduction for the year of income for which the expenditure was

incurred and in the next succeeding 4 years of income an amount

equal to 1 /5 of such expenditure.

2. CERTIFICATE TO BE FURNISHED

The deduction provided by this Part shall not be given until the

person claiming such deduction furnishes to the Comptroller a

certificate signed by the Director of Agricultural Services stating

that—

(a) the agricultural works for which the deduction is claimed

have been carried out; and

(b) the expenditure incurred is fair and reasonable.

3. DEDUCTION ALLOWABLE ON DISPOSAL

Where any person, who has incurred capital expenditure to which this

Part relates, disposes of such property prior to the grant of the full

amount of the allowances to which he or she would have been entitled

had the disposal not taken place he or she ceases to be entitled to any

further deduction and the balance is allowed to the person who

acquires the property.

4. APPORTIONMENT OF DEDUCTION

For the purposes of paragraph 3, where a property is disposed of on a

date other than the end of an income year or where part only of a

property is disposed of, the Comptroller may apportion the deduction

allowable as between the parties in such manner as appears to him or

her to be reasonable.

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5. MEANING OF CAPITAL EXPENDITURE ON AGRICULTURAL WORKS

In this Part ―capital expenditure on agricultural works‖ means

expenditure incurred in respect of the clearing, draining or planting of

land for agricultural purposes, soil conservation works, the provision

of drains, wells, boreholes or dipping tanks and the cutting of new

roads to areas of production.

PART 4 INTERPRETATION

1. DEFINITIONS

In Parts 1 and 2 of this Schedule—

―allowances granted‖ in relation to previous years of income

means the sum of the annual allowances granted under

this Schedule or the corresponding provision of the

previous Act and any initial allowances granted under the

previous Act;

―disposal‖ in relation to any assets means the scrapping, loss or

destruction, sale, exchange, compulsory acquisition or gift

of such asset;

―disposal value‖ means, in relation to—

(a) the scrapping of an asset, the scrap value thereof;

(b) the loss or destruction of an asset, any amount

received for the remains thereof together with any

amount accrued as compensation or indemnity for

such loss or destruction;

(i) sale, the net proceeds of sale,

(ii) exchange, the market value of any asset

acquired through such exchange adjusted to

take account of any monetary consideration

made,

(iii) compulsory acquisition, the amount for which

it was so acquired,

(iv) gift, the market value thereof,

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but in any case where the amount accrued or the market

value exceeds the cost, the disposal value is limited to the

cost price, or in the case of a building the adjusted cost

price, if applicable;

―expenditure incurred‖ by any person does not include such

part of any expenditure incurred as is reimbursed to that

person by way of subsidy or grant by the Government or

some other person unless such subsidy or grant has

formed part of his or her assessable income.

2. APPLICATION OF SCHEDULE TO HIRE PURCHASE TRANSACTIONS

Where, under a hire purchase agreement or similar transaction, the

use and enjoyment of an asset is obtained by a person to whom this

Schedule applies for a period of time at the end of which the property

in the asset will or may pass for no consideration or a nominal

consideration, he or she is considered to have—

(a) acquired the asset at the time the agreement or transaction

was entered into; and

(b) incurred expenditure thereon of an amount equal to the

total amounts, excluding interest, payable under the

agreement or transaction at the time referred to in

subparagraph (a).

3. APPORTIONMENT OF CONSIDERATION WHERE ASSETS SOLD FOR CONSOLIDATED AMOUNT

Where any property, in respect of which allowances are granted under

this Schedule or the previous Act is disposed of together with other

assets for a total consideration—

(a) which does not allocate separate prices for the separate

items; or

(b) which allocates either a nominal consideration to some

assets, or such consideration as, in the opinion of the

Comptroller does not represent the true market value of

those assets,

he or she may apportion the total consideration among the several

assets in such manner as to arrive at a true market value of those

assets in respect of which allowances have been granted and such

140 Cap.15.02 Income Tax Act Laws of Saint Lucia

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value shall be taken to be the disposal value of such assets for the

purposes of this Schedule.

4. DISPOSAL OF ASSETS IN CERTAIN TRANSACTIONS: VALUE TO BE ADOPTED

(1) Where any assets in respect of which allowances have been

granted under this Schedule or the previous Act or both, are

disposed of by the owner to a purchaser other than by way of a

transaction at arm‘s length, subject to subparagraph (2) the

assets are considered to have been disposed of at market value

and such value shall apply both to the vendor and the purchaser.

(2) Where—

(a) under the amalgamation, reconstruction or merger of a

company with another company and the transfer of assets

to that other company; or

(b) the transfer of assets from an individual to a company or

to a relative,

there is a substantial identity between the former owner and the

new owner, the assets in relation to both, are considered to have

been disposed of at their written down value.

(3) For the purposes of subparagraph (2) there is a substantial

identity between the former owner and the new owner—

(a) in the case to which subparagraph (2)(a) applies, where at

the end of the year of income in which the assets were

transferred, shares in the company acquiring the assets,

carrying—

(i) the right to exercise not less than 51% of the voting

power in the company,

(ii) the right to receive not less than 51% of any

dividends that might be paid by the company, or

(iii) the right to receive not less than 51% of any capital

distribution in the event of a winding up or of a

reduction in the share capital of the company, were

beneficially held by persons or relatives of such

persons who at the time the assets were transferred

beneficially held in the disposing company shares

carrying rights of those kinds;

(Amended by Act 15 of 2003)

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(b) in a case to which subparagraph (2)(b) applies, where at

the end of the year of income in which the assets were

transferred, in the case of a transfer to a company, shares

carrying rights of the kind specified in subparagraph (a)

were beneficially held by the vendor or relatives of the

vendor.

(4) In subparagraphs (2) and (3) ―a relative‖ in relation to any

person means—

(a) the spouse of that person; or

(b) a lineal ancestor, child or other lineal descendant, brother,

sister, uncle, aunt, nephew or niece of that person or of his

or her spouse.

[The next page is page 143]

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SCHEDULE 3

(Sections 76, 80, 87, 90 and 142)

DEDUCTION OF TAX FROM PAYMENT TO NON-RESIDENTS

1. APPLICATION

(1) This Schedule applies to every person who makes any payment

by way of—

(a) royalty;

(b) management charges;

to which section 77 applies;

(d) the distribution of income of a trust being income of the

kind specified in subparagraphs (a) to (c);

(e) premiums including insurance premiums but excluding

re-insurance;

(f) any other payments of an income nature and excludes the

following payments:

(i) dividends,

(ii) interest or discounts,

(iii) lease, premium or licence,

(iv) annuities or other periodic payments such as

payments by way of alimony or maintenance,

to a non-resident, and subject to subparagraph (2) does not

apply to any other payments to a non-resident carrying on

business or exercising employment in Saint Lucia.

(2) This Schedule also applies to any payment to a non-resident

person in respect of the independent personal services

performed in Saint Lucia other than by way of carrying on a

business in Saint Lucia through a permanent establishment in

Saint Lucia.

(3) Where the accounts of a business are maintained on an accrual

basis, and during a year of income any amount of the kind

specified in subparagraph (1) is charged as an expense but

payment is not made, tax shall be deducted and accounted for to

144 Cap.15.02 Income Tax Act Laws of Saint Lucia

Revision Date: 31 Dec 2008

the Comptroller as if payment had been made on the last day of

such income year.

(4) For the purposes of proviso (a) to paragraph 2, where the

income accruing to a trust is of different kinds, it shall be

treated as retaining such character for determining the rate of

tax to be deducted therefrom by the trustee.

2. DEDUCTION TO BE MADE BY PERSON MAKING PAYMENT

Where any payment is made to which this Schedule applies, then such

amount shall not form chargeable income of the person to whom the

payment is made and the person making such payment shall deduct

tax from the gross amount of such payment at the rate specified in

paragraph 3. However—

(a) where income accrues to a trust, and a non-resident

beneficiary is entitled to the immediate benefit of the

whole or part thereof, the trustee shall deduct and account

for the tax required to be deducted under this Schedule;

(b) where income which accrues to a non-resident is payable

to a bank or other agent on his or her behalf, then for the

purposes of collection, such bank or agent shall deduct

and account for the tax required to be deducted under this

Schedule;

by another non-resident then, for the purpose of collection

of the tax imposed by this section, the Comptroller may

issue an assessment directly on the non-resident to whom

the income accrues and the general provisions of Part 12

relating to the recovery of tax shall apply;

(d) where income accrues to a non-resident in respect of

rental of residential accommodation provided in Saint

Lucia the provisions of Parts 5 and 6 apply and in that

case the tax payable shall be at the rate provided in

Schedule 5.

3. RATE OF TAX TO BE DEDUCTED

Subject to section 60, and paragraph 2 the rate of tax to be deducted

on any payment of the kind specified in paragraph 1, is 25% of every

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Revision Date: 31 Dec 2008

dollar of such payment and is the final liability in respect of such

income.

4. CERTIFICATE AND RECORD OF PAYMENTS MADE AND TAX DEDUCTED

(1) Every person who has deducted any tax under this Schedule

shall furnish to the person to whom payment is made a

certificate showing the gross amount of the payment made and

the tax deducted therefrom.

(2) Every person making any payment to which this Schedule

applies shall maintain a record showing in relation to each

calendar year—

(a) the nature of the payment;

(b) the gross payment made to each non-resident; and

and such record shall be kept available for examination by the

Comptroller as and when required for any period not exceeding

6 years.

5. RETURNS OF DEDUCTION AND REMITTANCES OF TAX

(1) Every person shall, when making any payment under section

116, furnish a return in such form as the Comptroller may

approve showing the amount of tax deducted and remitted,

together with a copy of all certificates issued under paragraph 4

in respect of such deductions of tax.

(2) Every person to whom this Schedule applies, shall in respect of

each calendar year, within 2 months after the end of such year

or within such further time as the Comptroller may allow,

furnish to the Comptroller a return in such form as he or she

may approve showing the total of tax deducted by that person

during such year and the total payments of such tax which have

been made to the Comptroller.

(3) In the event of there being any deficiency between the total

amount of tax deducted in any year and the total payments of

such tax made to the Comptroller, that person shall be required

to account to the Comptroller for such deficiency.

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6. PERSONAL LIABILITY WHERE FAILURE TO DEDUCT TAX

(1) Where any person fails to deduct any tax under this Schedule he

or she shall, in addition to any penalty for which he or she may

be liable, be personally liable to pay to the Comptroller within

the time specified in section 116 the amount which he or she

has failed to deduct.

(2) Where any person pays to the Comptroller the amount of tax

which he or she failed to deduct, such amount shall be deemed

to have been deducted under this Schedule.

(3) The person making any payment to the Comptroller under this

paragraph is entitled to recover such amount from the person to

whom payment was made.

(4) Where any person has failed to deduct tax as required under this

Schedule but the Comptroller is satisfied that tax deducted from

earlier or later payments is sufficient to meet the amount of tax

which he or she has failed to deduct, the Comptroller may

absolve such person from his or her liability under

subparagraph (1).

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SCHEDULE 4

(Sections 77, 86, 90, 113, 143 and 144)

DEDUCTION OF TAX BY EMPLOYERS

1. REGISTRATION OF EMPLOYERS

(1) Every person who pays or becomes liable to pay remuneration

to any employee shall register as an employer with the

Comptroller.

(2) Every person who was an employer at the commencement of

this Act, but was not registered as an employer under the

Income Tax (Employment) Rules, 1965 shall register with the

Comptroller in the prescribed form within 30 days after the

commencement of this Act and every person who becomes an

employer after the commencement of this Act shall so register

within 30 days after the end of the month in which he or she

becomes an employer.

(3) Every employer who changes his or her business address or

ceases to be an employer shall notify the Comptroller

accordingly within 30 days of such change of address or of his

or her ceasing to be an employer, as the case may be.

2. DEDUCTION OF TAX

(1) Every employer shall, unless the Comptroller otherwise directs,

deduct tax in accordance with this Schedule.

(2) Subject to this paragraph and paragraph 5 the amount of tax to

be deducted is determined in accordance with tax deduction

tables prescribed by the Comptroller under paragraph 4(2) and

taking into account the concessional deductions claimed by the

employee in the declaration lodged by him or her under

paragraph 3.

(3) Where, during any calendar year an employee receives income

from more than one source of employment at the same time, the

amount of tax to be deducted is such amount as is directed by

the Comptroller.

(4) Where, during any calendar year, an employee—

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(a) is a non-resident individual; or

(b) being a resident individual, fails to lodge a declaration as

required by paragraph 3,

the amount of tax to be deducted is determined in accordance

with tax deduction tables prescribed by the Comptroller under

paragraph 4.

3. DECLARATION BY EMPLOYEES

(1) Subject to this paragraph, every employee chargeable to tax, to

whom any remuneration accrues from employment after the

commencement of this Act, shall furnish a declaration in the

prescribed form to the person specified in subparagraphs (2) or

(3).

(2) Where such remuneration is received from one employer only,

such declaration shall be furnished to the employer, who shall

take the particulars shown on such declaration into account in

deducting tax under paragraph 2.

(3) Where such remuneration is received by that employee from

more than one employer such declaration shall be furnished to

the Comptroller who shall direct the respective employers as to

the amount of tax to be deducted by them.

(4) A declaration under this paragraph shall not be furnished by any

employee who is a non-resident.

(5) A declaration under this paragraph shall be furnished—

(a) where an employment commences, within 14 days of

such commencement; and

(b) where the employee ceased to be entitled to the personal

allowances or other deductions or allowances claimed in a

declaration already furnished by him or her in respect of

that year, within 7 days of such change of circumstance.

(6) A declaration under this paragraph may be furnished at any

time during the year where there is any change of circumstances

whereby an employee becomes entitled to an increase in the

concessional deductions or other deductions or allowances

claimed in a declaration already furnished by him or her.

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4. TAX DEDUCTION TABLES

(1) The Comptroller shall prescribe tax deduction tables

(hereinafter in this Schedule referred to as ―the tables‖) which

come into force on the date of commencement of this Act.

(2) The tax to be deducted in accordance with the tables prescribed

under this paragraph shall take into account—

(a) the rates of tax payable under section 80;

(b) the concessional deductions allowable under sections 45,

46, 48, 49, 50, 51, 52 and 53; and

may deem appropriate.

(3) The tables shall include a table prescribing the tax to be

deducted in the case of a non-resident employee and an

employee who has failed to furnish a declaration under

paragraph 3.

(4) The tables shall specify the manner of calculation of the tax to

be deducted from any payments of remuneration by way of—

(a) annual or other bonuses;

(b) overtime; and

(5) In the event of any variation of the rates of tax payable or the

concessional deductions allowable in relation to any year of

income to which this Act applies, the Comptroller shall

prescribe new tables to take into account such variation and

shall, by notice published in the Gazette, specify the date upon

which such tables come into force.

5. VARIATIONS FROM TAX DEDUCTION TABLES

(1) Every employer shall, at the written request of any employee,

deduct from his or her remuneration an amount of tax greater

than that required to be deducted under the tables.

(2) Where, in relation to any year of income any employee is of the

opinion that the amount of tax required to be deducted by his or

her employer under the tables will be substantially greater than

the amount of tax which is likely to be charged for that year of

income, he or she may apply in the prescribed form to the

Comptroller for the issue of a direction and, if the Comptroller

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is satisfied that it would be reasonable to do so, he or she may

direct the employer by notice in writing to deduct either no tax

or such amount as appears to the Comptroller to be appropriate

to the circumstances of that employee, and the employer shall

comply with that direction.

(3) A request by an employee under subparagraph (1) or a direction

by the Comptroller under subparagraph (2) may be withdrawn

at any time by notice in writing given to the employer and upon

receipt of any such notice the employer shall deduct tax in

accordance with the tables.

(4) Any request under subparagraph (1), direction under

subparagraph (2) or notice of withdrawal under subparagraph

(3) shall be complied with by the employer on and after the pay

day next succeeding a period of 7 days following the receipt by

him or her of such request, direction or notice.

6. PAYMENT TO OR RECOVERY BY COMPTROLLER

Any tax deducted under this Schedule—

(a) is due and payable within the time specified in section

116; and

(b) when it becomes due and payable, is a debt due to

Government and, if unpaid, is liable to the penalty

specified in section 135 and to interest at the rate

specified in section 117 and may be recovered in the

manner provided in sections 118, 119, or 121.

7. PAYMENT OR REMUNERATION FREE OF TAX

(1) Any agreement between an employer and an employee whereby

the employer agrees to pay, as remuneration to the employee,

an amount expressed to be free of tax, is considered an

agreement providing for payment to the employee of such an

amount of remuneration as, after deduction of tax would leave

an amount equal to the remuneration paid.

(2) In any case to which subparagraph (1) applies—

(a) the employer is liable to pay to the Comptroller an

amount equal to the difference between the remuneration

considered to be paid and the amount of remuneration

paid;

151Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

(b) the amount is considered to be tax to be deducted under

this Schedule; and

from employment the amount considered to have been

paid by the employer.

8. CERTIFICATE OF REMUNERATION AND TAX DEDUCTED

(1) Every employer who deducts any tax under this Schedule in any

calendar year shall within the time and in relation to the period

specified in subparagraph (2), furnish to every employee to

whom remuneration has been paid, a certificate in the

prescribed form the contents of which shall include—

(a) the total remuneration accrued to that employee; and

(b) the total of the amounts of tax deducted from such

remuneration.

(2) The certificate referred to in subparagraph (1) shall specify the

period of employment to which it relates and shall be furnished

to the employee or former employee—

(a) where the employer has not ceased to be an employer in

relation to that employee at the end of the calendar year,

within one month after the end of that calendar year;

(b) where the employer has ceased to be an employer in

relation to that employee but has continued to be an

employer in relation to other employees, on the date of

cessation of the employment of that person; or

relation to all employees, within one month after the date

on which he or she ceased to be an employer.

(3) Any employee who has not received a certificate within the

time specified in subparagraph (2) shall apply to the employer

for such certificate to be furnished and in the event of such

certificate not being furnished within a further period of 15 days

he or she shall notify the Comptroller of such failure by the

employer to furnish the certificate.

(4) Every employee, when furnishing his or her return of income

for any year of income, shall attach to such return the certificate

furnished to him or her under this paragraph.

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(5) The certificate to be furnished under this paragraph by an

employer to an employee may be delivered—

(a) by hand to such employee or his or her authorised agent;

(b) by registered letter addressed to that employee at his or

her usual or last known postal address; or

chargeable to tax in his or her name, by hand or registered

letter addressed to the person chargeable.

However, in the event of inability to deliver a certificate in the

manner provided by this subparagraph the employer shall retain

such certificate and forward it to the Comptroller with the

return required under paragraph 12.

(6) In addition to the annual certificate referred to in subparagraph

(1), on every occasion during the calendar year upon which a

payment of remuneration is made to an employee from which

tax is deducted under this Schedule the employer shall furnish

to him or her particulars of the total remuneration payable for

the pay period and of the amount of tax deducted therefrom.

9. PERSONAL LIABILITY OF EMPLOYER AND EMPLOYEE

(1) Where, in any calendar year, an employer fails to deduct any

tax under paragraph 2, he or she, in addition to any penalty for

which he or she may be liable, is personally liable to pay to the

Comptroller within the time specified in section 116 the amount

which he or she has failed to deduct.

(2) Where an employer pays to the Comptroller the amount of tax

which he or she failed to deduct, such amount is considered to

have been deducted under this Schedule.

(3) The employer shall be entitled to recover from the employee

any amount paid to the Comptroller under subparagraph (2).

(4) Where, in relation to any payment of remuneration an employer

has failed to deduct tax under paragraph 2, but the Comptroller

is satisfied that tax deducted under this Schedule from earlier or

later payments of remuneration is sufficient to meet the amount

of tax which he or she has failed to deduct, the Comptroller

may absolve the employer from his or her liability under

subparagraph (1).

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(5) Where the Comptroller is of the opinion that any amount of tax

which has been set off under section 81 under a certificate

under paragraph 8 has not been deducted by the employer, the

employer and the employee is jointly and severally liable to pay

to the Comptroller the amount which has been so set off and

such amount is recoverable under this Act.

However, where the Comptroller is satisfied that the employee

alone was responsible for the incorrect amount being shown on

his or her certificate under paragraph 8, the employer is

absolved from liability under this subparagraph.

(6) Where it is proved to the satisfaction of the Comptroller that

any amount of tax is deducted from the remuneration of any

employee, although the employer has failed to pay such amount

to the Comptroller, no action shall be taken by the Comptroller

for the recovery thereof from that employee.

10. EMPLOYER TO KEEP RECORDS

Every employer shall, in respect of each of his or her employees,

maintain a record showing in relation to each calendar year, the

amounts of—

(a) remuneration accrued to that employee; and

(b) tax deducted from such remuneration,

and such record shall be kept available for examination by the

Comptroller as and when required.

11. EMPLOYER’S MONTHLY RETURN OF TAX DEDUCTIONS AND REMITTANCES

Every employer shall, when making any payment under section 116

furnish a return showing the amount of tax deducted and remitted.

12. EMPLOYER’S MONTHLY RETURN OF TAX DEDUCTIONS AND REMITTANCES

(1) Every employer shall, in respect of each calendar year—

(a) within one month after the end of that year; or

(b) where he or she ceases to be an employer during that

year, within 15 days after such cessation,

154 Cap.15.02 Income Tax Act Laws of Saint Lucia

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or within such further time as the Comptroller may allow,

furnish to the Comptroller a return showing the total amount of

tax deducted by him or her in respect of all of his or her

employees during that year and the total payments of such tax

made to the Comptroller.

(2) In the event of there being any deficiency between the total

amount of tax deducted and the total payments of such tax

made to the Comptroller, the employer shall be required to

account to the Comptroller for such deficiency.

(3) The return referred to in subparagraph (1) shall be accompanied

by a copy of all certificates issued under paragraph 8.

13. DUTIES AND LIABILITIES OF REPRESENTATIVE EMPLOYERS

(1) Every representative employer, in relation to any remuneration

paid by him or her in his or her representative capacity to any

employee shall be subject to the same duties and liabilities

under this Schedule as if such remuneration had been paid by

him or her in his or her personal capacity.

(2) Any tax which should be deducted by a representative employer

under this Schedule, any penalty due by him or her under

section 135, any interest due by him or her under section 117 or

fine imposed under section 143 or 144 on him or her shall be

recoverable from him or her but to the extent only of any assets

of the person whom he or she represents which may be in his or

her possession or may come to him or her while acting in his or

her representative capacity.

(3) The executor of the estate of any deceased employer or the

trustee of the estate of any bankrupt employer shall fulfil such

obligations of that employer under this Schedule as were not

fulfilled at the time of his or her death or bankruptcy.

14. LIABILITY TO DEDUCT TAX NOT ABATED BY OTHER RIGHTS OR OBLIGATIONS

The liability of an employer to deduct tax under this Schedule shall

not be abated or extinguished by reason of—

(a) the fact that the employer has a right or is, otherwise than

in terms of any law, under an obligation to deduct any

other amount from the employee‘s remuneration and such

155Laws of Saint Lucia Income Tax Act Cap.15.02

Revision Date: 31 Dec 2008

right or obligation, despite anything to the contrary

contained in any other law, is considered to refer only to

the balance of remuneration remaining after tax has been

deducted; and

(b) the provisions of any law which may provide that the

amount of remuneration shall not be reduced or be

subjected to attachment.

15. DEFINITIONS

In this Schedule—

―employee‖ means any person who, in respect of an

employment, as defined in section 2, receives

remuneration from an employer, and includes any person

to whom remuneration accrues—

(a) as a director of a company;

(b) from a former employer or the trustee of a pension

fund, as a consequence of a former employment; or

remuneration accrued to that dependent as a

consequence of the former employment of that

deceased person;

―employer‖ means any person who pays remuneration to an

employee, and includes—

(a) the Government of Saint Lucia;

(b) a representative employer; and

―remuneration‖ means any amount accrued to an employee by

way of employment income within the meaning of section

34, and includes any advance payments of remuneration;

―representative employer‖ means—

(a) in the case of a company, the principal officer or,

where such company is in liquidation, the

liquidator;

(b) in the case of a partnership, the precedent partner;

authority, a corporation or other authority

156 Cap.15.02 Income Tax Act Laws of Saint Lucia

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established by statute or a body corporate or

unincorporate (not being a company or partnership),

the person responsible for paying remuneration on

behalf of such employer;

(d) in the case of an employer in respect of whose

chargeable income a representative taxpayer is

chargeable to tax, the representative taxpayer; or

(e) in the case of a non-resident employer, the agent

having responsibility to pay remuneration on behalf

of such employer,

but this definition shall not be construed as relieving any

employer from any duty or liability imposed upon him or

her by this Schedule.

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SCHEDULE 5

RATE OF TAX

(Section 80)

1. On the chargeable income of every individual, unincorporated body

of persons or trustee—

Income Year Rate of Tax

1988 On the first $6,000 and under............................... 10%

On the next $6,000 viz. 6,001–12,000 ................. 20%

On the next $5,000 viz. 12,001–17,000 ............... 30%

On the remainder.................................................. 40%

1989 On the first $8,000 and under............................... 10%

On the next $7,000 viz. 8,001–15,000 ................. 15%

On the next $5,000 viz. 15,001–20,000 ............... 25%

On the remainder. ................................................ 30%

1990 On the first $10,000 and under. ........................... 10%

On the next $10,000 viz. 10,001–20,000 ............. 15%

On the next $10,000 viz. 20,001–30,000 ............. 20%

On the remainder.................................................. 30%

2. On the chargeable income, on every dollar thereof, of—

(a) companies existing before the commencement of this Act—

(i) for the income year 1988–40%

(ii) for the income year 1989–35%

(iii) for the income year 1990–33%

(iv) for income year 2003-33%

(v) for income year 2004-32%

(vi) for income year 2005 and subsequent income years-

30%

(aa) The rates specified in items (iv), (v) and (vi) are applicable to

companies who prior to income year 2003—

(i) have no arrears of income or any other tax administered by

the Inland Revenue Department; and

(ii) have complied with the requirements of any enactment

administered by the Inland Revenue Department.

158 Cap.15.02 Income Tax Act Laws of Saint Lucia

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(ab) Despite subparagraph (aa), a company which complies with the

provisions of subparagraph (aa) subsequent to income year 2003,

shall only be entitled to the prevailing reduced rates for the

income year in which the company complies and for subsequent

income years.

(b) 10% with effect from income year 2001 and for subsequent

income years up to income year 2005.

(Amended by Act 9 of 2001and S.I.64/2003)

3. On the chargeable income of every individual, unincorporated body

of persons or trustee until the payment of the retroactive salary increase for

people in the public service for the period April, 1994 to December, 1995–

GRADE ANNUAL INCOME TAX RATE

1–2 $11,580 and below 0%

3–9 $11,581 – $28,380 5%

10–18 $28,381 and above 10%

(Inserted by S.I. 86/1995)

SCHEDULE 6

(Section 45)

PERSONAL ALLOWANCE TO INDIVIDUALS

Income Year

1988 $ 6,000

1989 8,000

1990 10,000

2001 12,000 effective 1 June 2001

2002 14,000

2003 16,000

(Amended by Act 9 of 2001)

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SCHEDULE 7

DISTRESS WARRANT

(Section 119)

SAINT LUCIA

IN THE MATTER OF THE INCOME TAX ACT

IN THE MATTER OF ARREARS OF INCOME TAX

WARRANT TO EXECUTE DISTRESS FOR ARREARS OF TAX

To...............................................................................................................

WHEREAS it has been made to appear to me .............................................

Comptroller of Inland Revenue that................................................................

is (are) in arrears of income tax in the sum

of....................................................

AND WHEREAS that sum has been duly demanded from...........................

.........................................................................................................................

AND WHEREAS such tax has not been paid and remains unpaid as at the

day of

NOW THEREFORE by virtue of the power vested in me as Comptroller by

section 107 of the Income Tax Act I do hereby authorise you to collect and

recover the several amounts—

.........................................................................................................................

respectively due for tax, and for the recovery thereof I further authorise

you, with the assistance of any Constable which assistance the Constable is

hereby authorised to give, to distrain upon the goods and chattels

of......................................................................................................................

.........................................................................................................................

and to keep such goods and chattels for a period not exceeding 30 days at

the premises where execution was levied or such other place as you may

consider appropriate and if within the said 30 days after the making of the

distress the said sums and also the costs and charges of and incidental to the

taking and keeping of such distress, on the goods and chattels and other

distrainable things of.....................................................................................

or of any part thereof charged with such tax are not paid, to sell such goods

and chattels by public auction for payment of the above-mentioned tax

160 Cap.15.02 Income Tax Act Laws of Saint Lucia

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together with the costs of levy or of such distress.

AND for the purpose of levying such distress you are authorised, if

necessary, with such assistance as aforesaid, to break open any building in

the day time.

Given under my hand at this day of

................................................................

Comptroller of Inland Revenue

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SCHEDULE 8

(Section 75)

1. Foreign currency tax credit would be allowed against profits for

agents registered under the Registered Agent and Trustee Licensing

Act as follows—

100% for the first 4 years

75% for the next 3 years

50% for the next 3 years

2. Where a person derives income from the provision of professional

services to the International Financial Services sector as listed in

paragraph 4, and also derives income from other services, the person

is entitled to a foreign tax credit only in respect of income earned in

the provision of professional services to the International Financial

Services sector. The foreign tax credit is calculated as follows—

Profits from Foreign currency Tax Relief

Up to 30% ......................................... 35%

31% but under 50%........................... 55%

51% but under 70%........................... 75%

71% but under 100%......................... 95%

for a period of 10 years.

For the purposes of calculation, profits from foreign currency

earnings declared by the domestic organizations, shall be deemed to

be profits arrived at by the formula—

where

(a) ―FCE‖ represents the foreign currency earnings transferred to

the credit of that person within the relevant income year;

(b) ―P‖ represents the net profits from all sources;

The profits would be taxed by using the normal tax rates specified in

Schedule 5.

3. The qualifying professional services provided by companies licensed

under the Registered Agent and Trustee Licensing Act are the

following—

(a) Application Preparation

162 Cap.15.02 Income Tax Act Laws of Saint Lucia

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(b) Incorporation

(d) Directorships

(e) Company Secretaries

(f) Actuarial Services

4. The qualifying professional services provided by persons to whom

paragraph 2 relates are the following—

(a) Administrative\Management Services

(b) Insurance Management

(d) Audit\Accounting Services.

(Inserted by Act 9 of 2001)

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INCOME TAX (EVASION OF TAX PAYMENT)

(PREVENTION) RULES – SECTION 151

(Statutory Instruments 18/1971, 19/1977, 38/1993 and 32/1998)

Commencement [26 June 1971]

1. SHORT TITLE

These Rules may be cited as the Income Tax (Evasion of Tax

Payment) (Prevention) Rules.7

2. EXIT CERTIFICATES

(1) Subject to the provisions of rule 3 a person shall not leave

or attempt to leave the State unless the person so leaving or

attempting to leave has in his or her possession an exit

certificate in the Form A contained in the Schedule duly

signed by or on behalf of the Comptroller certifying that he

or she—

(a) does not owe any income tax; or

(b) has made satisfactory arrangements for the payment

of any income tax payable by him or her.

(2) Subject to the provisions of rule 3 a person shall not issue

or cause to be issued to any other person any ticket

entitling such other person to leave the State unless such

other person has in his or her possession an exit certificate

as in the last preceding subrule mentioned.

(3) A person shall not—

(a) accept or cause to be accepted as a passenger or

otherwise any other person to whom this rule

applies; or

(b) arrange or cause to be arranged any transportation

for any person to whom this rule applies to leave the

State,

7 Editor’s note: These rules are made under the Income Tax Act, 1965. This Act was

repealed and replaced by the Income Tax Act. However, these rules continue in

force under section 153.

164 Cap.15.02 Income Tax (Evasion of Tax Payment) Laws of Saint Lucia

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unless such other person produces or causes to be

produced to the first-named person a valid certificate

issued to such other person by or on behalf of the

Comptroller.

(4) Every person to whom this rule applies when about to

leave the State, shall, if required so to do by any

immigration officer, surrender to such immigration officer

a valid exit certificate issued to him or her by or on behalf

of the Comptroller.

(5) An exit certificate shall be valid for such period as might

be stated therein and not thereafter.

(6) The following fees shall be payable in respect of every

certificate issued under this rule.

A Single Exit Certificate $

(i) individual with no tax liability 5

(ii) pensioners with no other source of 5

income

(iii) all other individuals 10

B For each Exit Certificate valid for 3 months 40

C For each Exit Certificate valid for 6 months 60

D For each Exit Certificate valid for 12 months 120

(Substituted by S.I. 38/1993)

3. PERSONS EXEMPTED FROM OPERATION OF RULE 2

(1) Rule 2 shall not apply to—

(a) any person of the age of 16 years or under;

(b) any person of the age of 25 years or under, who is a

whole time student at a secondary school, college or

university;

latter being resident in the State;

(d) the Governor General, his or her spouse and children

under 21 years of age;

(e)

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(i) members of the House of Assembly,

(ii) public officers of the State when travelling on

Government business;

(f) any member of the military, naval or air forces of

Her Majesty or of any foreign State;

(g) any person in the diplomatic or consular service of

Her Majesty or foreign state unless any such person

is also engaged in any business or other employment

in the State;

(h) any high official, his or her spouse and children

under 21 years of age and any other official of any

organisation in respect of which a declaration has

been made by order of the Minister under and for the

purpose of the International Organisations and

Overseas Countries (Immunities and Privileges) Act

and any representative of any other Government as

defined in any such order;

(i) any person temporarily resident in the State; for the

purposes of this paragraph a person is temporarily

resident in the State whose total period of residence

in any one year does not exceed 6 months;

(j) any trafficker or other person who by reason of the

nature of his or her occupation or employment the

Comptroller deems it expedient to exempt, and who

holds a certificate of exemption issued by the

Comptroller; and

(k) ministers of religion, their spouses and children

under 16 years of age;

(l) any citizen or permanent resident of Saint Lucia.

(Amended by S.I. 32/1998)

(2) The certificate of exemption under this rule shall be in the

Form B in the Schedule.

4. IMMIGRATION OFFICER TO GRANT PERMISSION TO LEAVE

(1) Despite anything to the contrary in these Rules if an

immigration officer is satisfied, on application made to

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him or her by any person, that circumstances have arisen in

which it is impracticable for such person before leaving the

State to apply to the Comptroller for an exit certificate or a

certificate of exemption then—

(a) if such person satisfies the immigration officer that

he or she has paid all income tax then due and owing

by him or her on his or her own behalf or on behalf

of some other person or has made satisfactory

arrangements for the payment thereof; or

(b) if such person or any other person on his or her

behalf enters into a bond in the Form D of the

Schedule, with such surety or sureties, if any, as an

immigration officer shall require in the sum of

$1,000 for the payment by such person of any

income, tax due and owing by him or her; or

he or she is exempted from complying with the

provisions of rule 2,

such immigration officer shall issue to such person a

certificate in the Form C in the Schedule (in these rules

referred to as a ―special certificate of exemption‖); and

every person holding a valid special certificate of

exemption is exempt from complying with the provisions

of rule 2.

(2) An immigration officer who issues a special certificate of

exemption shall, without delay, forward a copy of such

certificate together with the relevant bond, if any, to the

Comptroller.

(3) A special certificate of exemption shall be valid for such

period from the date of its issue as may be stated therein

and not thereafter.

(4) Any person who has obtained from an immigration officer

a special certificate of exemption under subrule (1) shall,

when about to leave the State, if required so to do by any

immigration officer, surrender such certificate to such

immigration officer.

(5) If an individual, upon his or her arrival in the State,

satisfies an immigration officer that he or she is visiting the

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State for a temporary purpose (not with a view to deriving

or earning income in the State) for a period not exceeding

30 days, the immigration officer shall mark the passport or

other travel document issued in the name of that individual

with an official stamp mark bearing the date of such arrival

and the letters ―E.W.T.C.‖ (denoting Exit Without Tax

Certificate) and during the period of 30 days commencing

on that date, whenever necessary for the purpose of these

Rules in lieu of producing a tax certificate, that individual

may produce his or her passport or other travel document

so marked.

5. POWER OF COMPTROLLER TO FORBID SALE OF TICKET

Despite anything to the contrary a person shall not issue or cause

to be issued to any other person any ticket entitling such other

person to leave the State and shall not arrange for any

transportation for such other person to leave the State if a written

request is issued by or on behalf of the Comptroller to such first

named person prohibiting the issue of a ticket to such other

person.

However, the provisions of this rule cease to have effect on the

receipt by such first named person of a subsequent written

request issued by or on behalf of the said Comptroller

withdrawing such prohibition.

6. RIGHT OF APPEAL

Any person aggrieved by—

(a) the refusal of the Comptroller to grant to such person

an exit certificate or a certificate of exemption under

these rules; or

(b) the request of the Comptroller prohibiting the issue

of a ticket to such person, or the refusal of the

Comptroller to issue a request withdrawing any such

prohibition,

may appeal to the Minister whose decision thereon is final.

168 Cap.15.02 Income Tax (Evasion of Tax Payment) Laws of Saint Lucia

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7. POWER OF POLICE TO PREVENT DEPARTURE OF PERSONS

It is lawful for any police officer who has reasonable grounds to

suspect that any person is attempting to leave the State in breach

of the provisions of rules 2, 3 or 4 to order such person to

disembark from or not to embark on any ship or aircraft, and to

arrest such person without a warrant if he or she disobeys any

such order.

8. PENALTY

If any person contravenes or fails to comply with any provisions

of these Rules, he or she commits an offence and is liable on

summary conviction to a penalty not exceeding $1000.

(Amended by S.I. 19/1997)

FORM A (Rule 2)

Income Tax Act

EXIT CERTIFICATE

(to be presented to shipping or air transport lines and to be surrendered on

demand to an immigration officer at the place of departure).

................................................. 20 ...............

Applicant .........................................................

Address .........................................................

Occupation .................................................

This is to certify that the above person

*(i) does not owe any income tax, or

(ii) has made satisfactory arrangements for the payment of any

income tax payable by him or her, and that the Comptroller has

no objection to a ticket being issued to the above person to

leave the State.

...........................................................

Comptroller.

Laws of Saint Lucia Income Tax (Evasion of Tax Payment) Cap.15.02 169

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* Delete what is not applicable.

FORM B (Rule 3)

Income Tax Act

CERTIFICATE OF EXEMPTION

(to be presented to shipping or air transport lines and to be surrendered on

demand to an immigration officer at the place of departure).

.................................................... 20 .............

Applicant .....................................................

Address ................................................

Occupation .........................................

*This is to certify that the above person is exempt from producing an exit

certificate on the grounds that such person is ...........................................

and that the Comptroller has no objection to a ticket being issued to the

above person to leave the State.

...........................................................

Comptroller.

*Insert what is applicable.

FORM C (Rule 4)

Income Tax Act

SPECIAL CERTIFICATE OF EXEMPTION

(to be presented to shipping or air transport lines and to be surrendered on

demand to an immigration officer at the place of departure).

This certificate is issued to .......................................................................

(Full name and occupation)

of .....................................................................................................................

being holder of .............................................. Passport No ............................

(Nationality and No. of Passport)

170 Cap.15.02 Income Tax (Evasion of Tax Payment) Laws of Saint Lucia

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This is to certify that the said .............................................................. is

exempted from producing an exit certificate—

*(a) paid all income tax now due and owing by him or her;

*(b) make satisfactory arrangements for the payment of any income tax

now due and owing by him or her;

*(c) entered into a Bond in the sum of ............................................. with

one or more sureties.

Issued this .................................... day of ....................................... 20 ..........

.................................................................

Immigration Officer.

*(a), (b) or (c) to be deleted as appropriate.

N.B.—This certificate is valid for a period of 2 clear days from the

date of its issue and not thereafter.

FORM D

Income Tax Act

BOND

SAINT LUCIA.

KNOW ALL MEN BY THESE PRESENTS THAT I ........................................

of .................................................., and I (We) ...........................................

of ................................................................, and .........................................

of .................................. in the State of Saint Lucia (hereinafter referred to

as the surety or sureties) are held and firmly bound unto the Comptroller of

Inland Revenue of the said State in the sum of $.......................... to be paid

to the said Comptroller, for which payment to be well and truly made we

bind ourselves and each one of us, our and each of our heirs, executors and

administrators jointly and severally by these presents.

Dated this ................................. day of ..................................... 20...........

WHEREAS ........................................ is desirous of leaving the State and

has not satisfied an immigration officer that he or she has paid the income

tax now due and owing by him or her, or that he or she has made

satisfactory arrangements for the payment of such income tax.

AND WHEREAS the said surety or sureties, desire to enable the said

................................. to leave the State.

NOW, THEREFORE, the condition of the above-written bond are as

Laws of Saint Lucia Income Tax (Evasion of Tax Payment) Cap.15.02 171

(Prevention) Rules

Revision Date: 31 Dec 2008

follows—

(a) if the said ................................ returns to the State within 6 months

of the date of this Bond; or

(b) pays or makes arrangements for the payment of the income tax due

and owing by him or her on the day of his or her departure from the

State, then the above-written bond is void, but otherwise the same

remains in full force and virtue.

Signed ...................................................

of ..........................................................

Signed ...................................................

(Surety)

of ..........................................................

Signed ...................................................

(Surety)

of ..........................................................

Before me

............................................................

Immigration Officer.

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INCOME TAX (EXEMPTIONS) PROCLAMATIONS-

SECTION 258

(Statutory Instruments 5/1924 and 93/1941)

It is hereby declared that the interest payable on all loans

charged on the Public Revenue of Saint Lucia or on the revenue

of any local authority to persons not resident in Saint Lucia is

exempted from income tax as from 1 January 1924.

It is hereby declared that the interest payable on any Saint Lucia

Savings Certificates issued by the Government of Saint Lucia is

exempted from income tax.

8 Editor’s note: This Proclamation was continued under the Income Tax Act, 1965. That

Act was repealed and replaced by the Income Tax Act. However, the Proclamation

continues in force under section 153.

175Laws of Saint Lucia Income Tax (Double Taxation Relief) Cap.15.02 (United Kingdom) Order

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INCOME TAX (DOUBLE TAXATION RELIEF) (UNITED

KINGDOM) ORDER – SECTION 609

(Statutory Instruments 33/1949, 33/1951 and 25/1968)

Commencement

[Paragraph 6(3) of Schedule: 7 September 1968]

[Paragraphs 13(1) and 13(2) of Schedule: 1 January 1968 Remainder:

28 May 1949]

1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(United Kingdom) Order.

2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in the Arrangement set out

in the Schedule to this Order were made with the

Government of the United Kingdom with a view to

affording relief from double taxation in relation to income

tax or profits tax and taxes of a similar character imposed

by the laws of the United Kingdom; and

(b) that it is expedient that those arrangements have effect.

SCHEDULE

ARRANGEMENT BETWEEN HIS MAJESTY‘S GOVERNMENT AND

THE GOVERNMENT OF SAINT LUCIA FOR THE AVOIDANCE OF

DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME

9 Editor’s note: This Order was continued under the Income Tax Act, 1965. That Act was

repealed and replaced by the Income Tax Act. However, the Order continues in force

under section 153.

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(1) The taxes which are the subject of this Arrangement are—

(a) In the United Kingdom:

The Income tax (including surtax) and the profits

tax (hereinafter referred to as ―United Kingdom

tax‖).

(b) In Saint Lucia:

The Income tax (hereinafter referred to as ―Saint

Lucia tax‖).

(2) This Arrangement shall also apply to any other taxes of a

substantially similar character imposed in the United

Kingdom or Saint Lucia after this Arrangement has come

into force.

(1) In this Arrangement, unless the context otherwise

requires—

(a) The term ―United Kingdom‖ means Great Britain

and Northern Ireland, excluding the Channel Islands

and the Isle of Man.

(b) (Repealed by S.I. 25/1968)

territory‖ mean the United Kingdom or Saint Lucia,

as the context requires.

(d) The term ―tax‖ means United Kingdom tax or Saint

Lucia tax, as the context requires.

(e) The term ―person‖ includes any body of persons,

corporate or not corporate.

(f) The term ―company‖ includes any body corporate.

(g) The terms ―resident of the United Kingdom‖ and

―resident of Saint Lucia‖ mean respectively any

person who is resident in the United Kingdom for

the purposes of United Kingdom tax and not

resident in Saint Lucia for the purposes of Saint

Lucia tax and any person who is resident in Saint

Lucia for the purposes of Saint Lucia tax and not

resident in the United Kingdom for the purposes of

United Kingdom tax; and a company shall be

regarded as resident in the United Kingdom if its

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(h)

(i)

(j)

(k)

business is managed and controlled in the United

Kingdom and as resident in Saint Lucia if its

business is managed and controlled in Saint Lucia.

The terms ―resident of one of the territories‖ and

―resident of the other territory‖ mean a person who

is a resident of the United Kingdom or a person who

is a resident of Saint Lucia, as the context requires.

The terms ―United Kingdom enterprise‖ and ―Saint

Lucia enterprise‖ mean respectively an industrial or

commercial enterprise or undertaking carried on by

a resident of the United Kingdom and an industrial

or commercial enterprise or undertaking carried on

by a resident of Saint Lucia; and the terms

―enterprise of one of the territories‖ and ―enterprise

of the other territory‖ mean a United Kingdom

enterprise or a Saint Lucia enterprise, as the context

requires.

The term ―industrial or commercial profits‖

includes rentals in respect of cinematograph films.

The term ―permanent establishment‖, when used

with respect to an enterprise of one of the territories

means a branch, management or other fixed place of

business, but does not include an agency unless the

agent has, and habitually exercises, a general

authority to negotiate and conclude contracts on

behalf of such enterprise or has a stock of

merchandise from which he regularly fills orders on

its behalf.

An enterprise of one of the territories shall not be

deemed to have a permanent establishment in the

other territory merely because it carries on business

dealings in that other territory through a bona fide

broker or general commission agent acting in the

ordinary course of his business as such.

The fact that an enterprise of one of the territories

maintains in the other territory a fixed place of

business exclusively for the purchase of goods or

merchandise shall not of itself constitute that fixed

178 Cap.15.02 Income Tax (Double Taxation Relief) Laws of Saint Lucia

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place of business a permanent establishment of the

enterprise.

The fact that a company which is a resident of one

of the territories has a subsidiary company which is

a resident of the other territory or which is engaged

in trade or business in that other territory (whether

through a permanent establishment or otherwise)

shall not of itself constitute that subsidiary company

a permanent establishment of its parent company.

(2) Where under this Arrangement any income is exempt

from tax in one of the territories if (with or without other

conditions) it is subject to tax in the other territory, and

that income is subject to tax in that other territory by

reference to the amount thereof which is remitted to or

received in that other territory, the exemption to be

allowed under this Arrangement in the first-mentioned

territory shall apply only to the amount so remitted or

received.

(3) In the application of the provisions of this Arrangement

by the United Kingdom or Saint Lucia, any term not

otherwise defined shall, unless the context otherwise

requires, have the meaning which it has under the laws of

the United Kingdom, or, as the case may be, Saint Lucia,

relating to the taxes which are the subject of this

Arrangement.

(1) The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to Saint Lucia tax unless

the enterprise is engaged in trade or business in Saint

Lucia through a permanent establishment situated therein.

If it is so engaged, tax may be imposed on those profits by

Saint Lucia but only on so much of them as is attributable

to that permanent establishment.

(2) The industrial or commercial profits of a Saint Lucia

enterprise shall not be subject to the United Kingdom tax

unless the enterprise is engaged in trade or business in the

United Kingdom through a permanent establishment

situated therein. If it is so engaged, tax may be imposed

on those profits by the United Kingdom, but only on so

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much of them as is attributable to that permanent

establishment.

(3) Where an enterprise of one of the territories is engaged in

trade or business in the other territory through a

permanent establishment situated therein, there shall be

attributed to that permanent establishment the industrial

or commercial profits which it might be expected to

derive from its activities in that other territory if it were

an independent enterprise engaged in the same or similar

activities under the same or similar conditions and dealing

at arm‘s length with the enterprise of which it is a

permanent establishment

(4) No portion of any profits arising from the sale of goods or

merchandise by an enterprise of one of the territories shall

be attributed to a permanent establishment situated in the

other territory by reason of the mere purchase of the

goods or merchandise within that other territory.

4. Where—

(a) an enterprise of one of the territories participates directly

or indirectly in the management, control or capital of an

enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory, and

2 enterprises, in their commercial or financial relations,

which differ from those which would be made between

independent enterprises,

then any profits which would but for those conditions have

accrued to one of the enterprises but by reason of those

conditions have not so accrued may be included in the profits of

that enterprise and taxed accordingly.

5. Notwithstanding the provisions of paragraphs 3 and 4, profits

which a resident of one of the territories derives from operating

ships or aircraft shall be exempt from tax in the other territory.

(1) Dividends paid by a company resident in one of the

territories to a resident of the other territory who is subject

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to tax in that other territory in respect thereof and not

engaged in trade or business in the first-mentioned

territory through a permanent establishment situated

therein, shall be exempt from any tax in that first

mentioned territory which is chargeable on dividends in

addition to the tax chargeable in respect of the profits or

income of the company.

(2) Where a company which is a resident of one of the

territories derives profits or income from sources within

the other territory, the Government of that other territory

shall not impose any form of taxation on dividends paid

by the company to persons not resident in that other

territory or any tax in the nature of an undistributed

profits tax on undistributed profits of the company, by

reason of the fact that those dividends or undistributed

profits represent, in whole or in part, profits or income so

derived.

(3) If the recipient of a dividend is a company which owns

10% or more of the class of shares in respect of which the

dividend is paid then subparagraph (1) shall not apply to

the dividend to the extent that it can have been paid only

out of profits which the company paying the dividend

earned or other income which it received in a period

ending 12 months or more before the relevant date. For

the purposes of this subparagraph the term ―relevant date‖

means the date on which the beneficial owner of the

dividend became the owner of 10% or more of the class

of shares in question. Provided that this subparagraph

shall not apply if the beneficial owner of the dividend

shows that the shares were acquired for bona fide

commercial reasons and not primarily for the purpose of

securing the benefit of this paragraph.

(Amended by S.I.25/1968)

(1) Any royalty derived from sources within one of the

territories by a resident of the other territory who is

subject to tax in that other territory in respect thereof and

is not engaged in trade or business in the first-mentioned

territory through a permanent establishment situated

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therein, shall be exempt from tax in that first mentioned

territory; but no exemption shall be allowed under this

paragraph in respect of so much of any royalty as exceeds

an amount which represents a fair and reasonable

consideration for the rights for which the royalty is paid.

(2) In this paragraph the term ―royalty‖ means any royalty or

other amount paid as consideration for the use of, or for

the privilege of using any copyright, patent, design, secret

process or formula, trade-mark, or other like property, but

does not include a royalty or other amount paid in respect

of the operation of a mine or quarry or of other extraction

of natural resources.

(1) Remuneration, including pensions, paid by the

Government of one of the territories to any individual for

services rendered to that Government in the discharge of

governmental functions shall be exempt from tax in the

other territory if the individual is not ordinarily resident in

that other territory or (where the remuneration is not a

pension) is ordinarily resident in that other territory solely

for the purpose of rendering those services.

(2) The provisions of this paragraph shall not apply to

payments in respect of services rendered in connection

with any trade or business carried on by either of the

Governments for purposes of profit.

(1) An individual who is a resident of the United Kingdom

shall be exempt from Saint Lucia tax on profits or

remuneration in respect of personal (including

professional) services performed within Saint Lucia in

any year of assessment if—

(a) he is present within Saint Lucia for a period or

periods not exceeding in the aggregate 183 days

during that year, and

(b) the services are performed for or on behalf of a

person resident in the United Kingdom, and

Kingdom tax.

182 Cap.15.02 Income Tax (Double Taxation Relief)

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(2) An individual who is a resident of Saint Lucia shall be

exempt from United Kingdom tax on profits or

remuneration in respect of personal (including

professional) services performed within the United

Kingdom in any year of assessment if—

(a) he is present within the United Kingdom for a

period or periods not exceeding in the aggregate

183 days during that year, and

(b) the services are performed for or

person resident in Saint Lucia, and

on behalf of a

Lucia tax.

or remuneration are subject to Saint

(3) The provisions of this paragraph shall not apply to the

profits or remuneration of public entertainers such as

stage, motion picture or radio artists, musicians and

athletes.

10.

(1) Any pension (other than a pension paid by the

Government of Saint Lucia for services rendered to it in

the discharge of governmental functions) and any annuity,

derived from sources within Saint Lucia by an individual

who is a resident of the United Kingdom and subject to

United Kingdom tax in respect thereof, shall be exempt

from Saint Lucia tax.

(2) Any pension (other than a pension paid by the

Government of the United Kingdom for services rendered

to it in the discharge of governmental functions) and any

annuity, derived from sources within the United Kingdom

by an individual who is a resident of Saint Lucia and

subject to Saint Lucia tax in respect thereof, shall be

exempt from United Kingdom tax.

(3) The term ―annuity‖ means a stated sum payable

periodically at stated times, during life or during a

specified or ascertainable period of time, under an

obligation to make the payments in consideration of

money paid.

11. The remuneration derived by a professor or teacher who is

ordinarily resident in one of the territories, for teaching, during

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a period of temporary residence not exceeding 2 years, at a

university, college, school or other educational institution in the

other territory, shall be exempt from tax in that other territory.

12. A student or business apprentice from one of the territories who

is receiving full-time education or training in the other territory

shall be exempt from tax in that other territory on payments

made to him by persons in the first-mentioned territory for the

purposes of his maintenance, education or training.

13.

(1) Subject to the provisions of the law of the United

Kingdom regarding the allowance as a credit against

United Kingdom tax or tax payable in a territory outside

the United Kingdom (which shall not effect the general

principle hereof)—

(a) Saint Lucia tax payable under the laws of Saint

Lucia and in accordance with this Arrangement,

whether directly or by deduction, on profits or

income from sources within Saint Lucia shall be

allowed as a credit against any United Kingdom tax

computed by reference to the same profits or

income by reference to which Saint Lucia tax is

computed. Provided that in the case of a dividend

the credit shall only take into account such tax in

respect thereof as is additional to any tax payable by

the company on the profits out of which the

dividend is paid and is ultimately borne by the

recipient without reference to any tax so payable.

(b) Where a company which is a resident of Saint Lucia

pays a dividend to a company resident in the United

Kingdom which controls directly or indirectly at

least 10% of the voting power in the first-mentioned

company, the credit shall take into account (in

addition to any Saint Lucia tax for which credit may

be allowed under (a) of this subparagraph) the Saint

Lucia tax payable by that first-mentioned company

in respect of the profits out of which such dividend

is paid.

(2) Subject to the provisions of the law of Saint Lucia

regarding the allowance as a credit against Saint Lucia tax

184 Cap.15.02 Income Tax (Double Taxation Relief) Laws of Saint Lucia

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Revision Date: 31 Dec 2008

of tax payable in a territory outside Saint Lucia (which

shall not affect the general principle hereof)—

(a) United Kingdom tax payable under the laws of the

United Kingdom and in accordance with this

Arrangement, whether directly of by deduction, on

profits or income from sources within the United

Kingdom shall be allowed as a credit against any

Saint Lucia tax computed by reference to which the

profits or income by reference to which the United

Kingdom tax is computed. Provided that in the case

of a dividend the credit shall only take into account

such tax in respect thereof as is additional to any tax

payable by the company on the profits out of which

the dividend is paid and is ultimately borne by the

recipient without reference to any tax so payable.

(b) Where a company which is a resident of the United

Kingdom pays a dividend to a company resident in

Saint Lucia which controls directly or indirectly at

least 10% of the voting power in the first-mentioned

company, the credit shall take into account (in

addition to any United Kingdom tax for which

credit may be allowed under (a) of this

subparagraph) the United Kingdom tax payable by

that first-mentioned company in respect of the

profits out of which such dividend is paid.

(3) For the purposes of this paragraph profits or remuneration

for personal (including professional) services performed

in one of the territories shall be deemed to be income

from sources within that territory, and the services of an

individual whose services are wholly or mainly performed

in ships or aircraft operated by a resident of one of the

territories shall be deemed to be performed in that

territory.

(4) Where Colonial income tax is payable for a year for

which this arrangement has effect in respect of any

income in respect of which United Kingdom income tax

is payable for a year prior to the year beginning on the 6th

April, 1949, then—

(a) in the case of a person resident in Saint Lucia, the

Colonial income tax shall, for the purposes of

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subparagraph (2) of this paragraph, be deemed to be

reduced by the amount of any relief allowable in

respect thereof under the provisions of section 27 of

the United Kingdom Finance Act, 1920; and

(b) in the case of a person resident in the United

Kingdom, the provisions of section 50 of the Saint

Lucia Income Tax Act, 1948, shall apply for the

purposes of the allowance of relief from the Saint

Lucia tax.

(Amended by S.I. 25/1968)

14.

(1) The taxation authorities of the United Kingdom and Saint

Lucia shall exchange such information (being information

available under their respective taxation laws) as is

necessary for carrying out the provisions of this

Arrangement or for the prevention of fraud or the

administration of statutory provisions against legal

avoidance in relation to the taxes which are the subject of

this Arrangement. Any information so exchanged shall be

treated as secret and shall not be disclosed to any persons

other than those concerned with the assessment and

collection of the taxes which are the subject of this

Arrangement. No information shall be exchanged which

would disclose any trade secret or trade process.

(2) As used in this paragraph, the term ―taxation authorities‖

means the Commissioners of Inland Revenue or their

authorised representative in the case of the United

Kingdom and the Commissioners of Income Tax or their

authorised representative in the case of Saint Lucia.

15. This Arrangement shall come into force on the date on which

the last of all such things shall have been done in the United

Kingdom and Saint Lucia as are necessary to give the

Arrangement the force of law in the United Kingdom and Saint

Lucia respectively, and shall thereupon have effect—

(a) In the United Kingdom:

as respects income tax, for any year of assessment

beginning on or after 6 April 1949; as respects surtax, for

any year of assessment beginning on or after 6 April

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1948; and as respects profits tax, in respect of the

following profits—

(i) profits arising in any chargeable accounting period

beginning on or after the 1 April 1949;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is, or but for the present

Arrangement would be, chargeable for any year of

assessment beginning on or after 6 April 1949;

(b) In Saint Lucia:

as respects income tax for the year of assessment

beginning on 1 January 1949, and subsequent years.

16. This Arrangement shall continue in effect indefinitely but either

of the Governments may, on or before 30 June in any calendar

year after the year 1950, give notice of termination to the other

Government and in such event, this Arrangement shall cease to

be effective—

(a) In the United Kingdom:

as respects income tax, for any year of assessment

beginning on or after the 6th April in the calendar year

next following that in which the notice is given; and as

respects surtax, for any year of assessment beginning on

or after the 6th April in the calendar year in which the

notice is given; and as respects profits tax, in respect of

the following profits—

(i) profits arising in any chargeable accounting period

beginning on or after 1 April in the calendar year

next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date.

(iii) profits not so arising or attributable by reference to

which income tax is chargeable for any year of

assessment beginning on or after 6 April in that next

following calendar year;

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(b) In Saint Lucia:

as respects income tax for any year of assessment

beginning on or after 1 January in the calendar year next

following that in which such notice is given.

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INCOME TAX (DOUBLE TAXATION RELIEF)

(SWEDEN) ORDER – SECTION 60

(Statutory Instrument 50/1954)

Commencement [31 December 1954]

WHEREAS it is provided by section 52(1) of the Income Tax Act

194710, that if the Governor General by order declares that

arrangements specified in the order were made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to income tax

despite anything in any enactment;

AND WHEREAS by a Convention dated 30 March 1949 between

His Majesty in respect of the United Kingdom and His Majesty

the King of Sweden, arrangements were made among other

things for the avoidance of double taxation;

AND WHEREAS provision is made in the said Convention for the

extension by means of an exchange of notes between the High

Contracting Parties of the said Convention, subject to such

modifications and conditions (including conditions as to

termination) as may be specified in the exchange of notes, to

any territory, for whose foreign relations the United Kingdom is

responsible, which imposes taxes substantially similar in

character to those which are the subject of the said Convention;

AND WHEREAS by a notification dated 18 December 1953 the

said Convention with certain modifications was applied to Saint

Lucia.

1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(Sweden) Order.

10 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in Schedule 1 to this

Order, as modified by the provisions of Schedule 2 to this

Order have been made with the Government of Sweden;

(b) that it is expedient that those arrangements have effect.

SCHEDULE 1

(Section 2)

CONVENTION BETWEEN HIS MAJESTY IN RESPECT OF THE

UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND

AND HIS MAJESTY THE KING OF SWEDEN FOR THE AVOIDANCE

OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL

EVASION WITH RESPECT TO TAXES ON INCOME.

London, 30th March, 1949

His Majesty The King of Great Britain, Ireland and the British

Dominions beyond the Seas and His Majesty the King of

Sweden,

Desiring to conclude a Convention for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income,

Have appointed for that purpose as their Plenipotentiaries:

His Majesty the King of Great Britain, Ireland and the British

Dominions beyond the Seas:

For the United Kingdom of Great Britain and Northern Ireland:

Sir William Strang, K.C.B., K.C.M.G., M.B.E., Permanent

Under-Secretary of State for Foreign Affairs:

His Majesty the King of Sweden:

His Excellency Monsieur Bo Gunnar Richardson, Hagglof, His

Majesty‘s Ambassador Extraordinary and Plenipotentiary in

London:

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Who, having exhibited their respective full powers, found in

good and due form, have agreed as follows:—

ARTICLE I

1. The taxes which are the subject of the present Convention are—

(a) In Sweden:

The State income tax (including coupon tax) and the tax

on the undistributed profits of companies

(Ersattningsskatt), and, for the purposes of Articles XXII,

paragraph (3), and XXIII to XXV inclusive, the State

capital tax (hereinafter referred to as ―Swedish tax‖).

(b) In the United Kingdom of Great Britain and Northern

Ireland:

The income tax (including surtax) and the profits tax

(hereinafter referred to as ―United Kingdom tax‖).

2. The present Convention shall also apply to any other taxes of a

substantially similar character imposed in the United Kingdom

or Sweden subsequently to the date of signature of the present

Convention.

ARTICLE II

1. In the present Convention, unless the context otherwise

requires—

(a) the term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man;

(b) the terms ―one of the territories‖ and ―the other territory‖

mean the United Kingdom or Sweden, as the context

requires;

as the context requires;

(d) the term ―person‖ includes any body of persons, corporate

or not corporate;

(e) the term ―company‖ means any body corporate;

(f) the terms ―resident of the United Kingdom‖ and ―resident

of Sweden‖ mean respectively any person who is resident

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in the United Kingdom for the purposes of United

Kingdom tax and not resident in Sweden for the purposes

of Swedish tax and any person who is resident in Sweden

for the purposes of Swedish tax and not resident in the

United Kingdom for the purposes of United Kingdom tax;

a company shall be regarded as resident in the United

Kingdom if its business is managed and controlled in the

United Kingdom and as resident in Sweden if it is

incorporated under the laws of Sweden and its business is

not managed and controlled in the United Kingdom, or if

it is not so incorporated but its business is managed and

controlled in Sweden;

(g) the terms ―resident of one of the territories‖ and ―resident

of the other territory‖ mean a person who is a resident of

the United Kingdom or a person who is a resident of

Sweden, as the context requires;

(h) the terms ―United Kingdom enterprise‖ and ―Swedish

enterprise‖ mean respectively an industrial or commercial

enterprise or undertaking carried on by a resident of the

United Kingdom and an industrial or commercial

enterprise or undertaking carried on by a resident of

Sweden, and the terms ―enterprise of one of the

territories‖ and ―enterprise of the other territory‖ mean a

United Kingdom enterprise or a Swedish enterprise, as the

context requires;

(i) the term ―industrial or commercial profits‖ includes rents

or royalties in respect of cinematograph films;

(j) the term ―permanent establishment,‖ when used with

respect to an enterprise of one of the territories, means a

branch, management, factory, or other fixed place of

business, a mine, quarry or any other place of natural

resources subject to exploitation. It also includes a place

where building construction is carried on by contract for a

period of at least one year, but does not include an agency

unless the agent has, and habitually exercises, a general

authority to negotiate and conclude contracts on behalf of

the enterprise or has a stock of merchandise from which

he regularly fills orders on its behalf. In this connection

(i) an enterprise of one of the territories shall not be

deemed to have a permanent establishment in the

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other territory merely because it carries on business

dealings in that other territory through a bona fide

broker or general commission agent acting in the

ordinary course of his business as such,

(ii) the fact that an enterprise of one of the territories

maintains in the other territory a fixed place of

business exclusively for the purchase of goods or

merchandise shall not of itself constitute that fixed

place of business a permanent establishment of the

enterprise,

(iii) the fact that a company which is a resident of one of

the territories has a subsidiary company which is a

resident of the other territory or which carries on a

trade or business in that other territory (whether

through a permanent establishment or otherwise)

shall not of itself constitute that subsidiary company

a permanent establishment of its parent company.

2. Where under this Convention any income is exempt from tax in

one of the territories if (with or without other conditions) it is

subject to tax in the other territory, and that income is subject to

tax in that other territory by reference to the amount thereof

which is remitted to or received in that other territory, the

exemption to be allowed under this Convention in the first-

mentioned territory shall apply only to the amount so remitted

or received.

3. In the application of the provisions of the present Convention of

the High Contracting Parties any term not otherwise defined

shall, unless the context otherwise requires, have the meaning

which it has under the laws in force in the territory of that Party

relating to the taxes which are the subject of the present

Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to Swedish tax unless the

enterprise carries on a trade or business in Sweden through a

permanent establishment situated therein. If it carries on a trade

or business as aforesaid, tax may be imposed on those profits by

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Sweden, but only on so much of them as is attributable to that

permanent establishment.

2. The industrial or commercial profits of a Swedish enterprise

shall not be subject to United Kingdom tax unless the enterprise

carries on a trade or business in the United Kingdom through a

permanent establishment situated therein. If it carries on a trade

or business as aforesaid, tax may be imposed on those profits by

the United Kingdom, but only on so much of them as is

attributable to that permanent establishment.

3. Where an enterprise of one of the territories carries on a trade or

business in the other territory through a permanent

establishment situated therein, there shall be attributed to that

permanent establishment the industrial or commercial profits

which it might be expected to derive in that other territory if it

were an independent enterprise engaged in the same or similar

activities under the same or similar conditions and dealing at

arm‘s length with the enterprise of which it is a permanent

establishment.

4. Where an enterprise of one of the territories derives profits,

under contracts concluded in that territory, from sales of goods

or merchandise stocked in a warehouse in the other territory for

convenience of delivery and not for purposes of display, those

profits shall not be attributed to a permanent establishment of

the enterprise in that other territory.

5. No portion of any profits arising to an enterprise of one of the

territories shall be attributed to a permanent establishment

situated in the other territory by reason of the mere purchase of

goods or merchandise within that other territory by the

enterprise.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly

or indirectly in the management, control or capital of an

enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory;

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and in either case, conditions are made or imposed between the

2 enterprises, in their commercial or financial relations, which

differ from those which would be made between independent

enterprises, then any profits which would but for those

conditions have accrued to one of the enterprises but by reason

of those conditions have not so accrued may be included in the

profits of that enterprise and taxed accordingly.

ARTICLE V

1. The industrial and commercial profits of a Swedish enterprise

shall, so long as undistributed profits of United Kingdom

enterprises are effectively charged to United Kingdom profits

tax at a lower rate than distributed profits of such enterprises, be

charged to United Kingdom profits tax only at that lower rate.

2 Where a company which is a resident of Sweden controls,

directly or indirectly, not less than 50%. of the entire voting

power of a company which is a resident of the United Kingdom,

distributions by the latter company to the former company shall

be left out of account in computing United Kingdom profits tax

effectively chargeable on the latter company at the rate

appropriate to distributed profits.

ARTICLE VI

Notwithstanding the provisions of Articles III, IV, and V,

profits which a resident of one of the territories derives from

operating ships or aircraft shall be exempt from tax in the other

territory.

ARTICLE VII

(a) Dividends paid by a company which is a resident of the

United Kingdom to a resident of Sweden, who is subject

to tax in Sweden in respect thereof and does not carry on

a trade or business in the United Kingdom through a

permanent establishment situated therein, shall be exempt

from United Kingdom surtax.

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(b) The Swedish coupon tax on dividends paid by a company

which is a resident of Sweden to a resident of the United

Kingdom, who is subject to tax in the United Kingdom in

respect thereof and does not carry on a trade or business

in Sweden through a permanent establishment situated

therein, shall not exceed 5%.

Provided that where the resident of the United Kingdom is a

company which controls, directly or indirectly, not less than

50%. of the entire voting power of the company paying the

dividends, the dividends shall be exempt from coupon tax.

2. Where a company which is a resident of one of the territories

derives profits or income from sources within the other

territory, there shall not be imposed in that other territory any

form of taxation on dividends paid by the company to persons

not resident in that other territory, or any tax in the nature of

undistributed profits tax on undistributed profits of the

company, whether or not those dividends or undistributed

profits represent, in whole or in part, profits or income so

derived.

ARTICLE VIII

1. Any interest derived from sources within one of the territories

by a resident of the other territory who is subject to tax in that

other territory in respect thereof and does not carry on a trade or

business in the first-mentioned territory through a permanent

establishment situated therein, shall be exempt from tax in that

first-mentioned territory.

2. In this Article, the term ―interest‖ includes interest on bonds,

securities, notes, debentures or any other form of indebtedness.

3. Where any interest exceeds a fair and reasonable consideration

in respect of the indebtedness for which it is paid, the

exemption provided by the present Article shall apply only to so

much of the interest as represents such fair and reasonable

consideration.

ARTICLE IX

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1. Any royalty derived from sources within one of the territories

by a resident of the other territory, who is subject to tax in that

other territory in respect thereof and does not carry on a trade or

business in the first-mentioned territory through a permanent

establishment situated therein, shall be exempt from tax in that

first-mentioned territory.

2. In this Article, the term ―royalty‖ means any royalty or other

amount paid as consideration for the use of, or for the privilege

of using, any copyright, patent, design, secret process or

formula, trade-mark, or other like property, but does not include

any royalty or other amount paid in respect of the operation of a

mine or quarry or of any other extraction of natural resources.

3. Where any royalty exceeds a fair and reasonable consideration

in respect of the rights for which it is paid, the exemption

provided by the present Article shall apply only to so much of

the royalty as represents such fair and reasonable consideration.

4. Any capital sum derived from sources within one of the

territories from the sale of patent rights by a resident of the

other territory who does not carry on a trade or business in the

first-mentioned territory through a permanent establishment

situated therein, shall be exempt from tax in that first-

mentioned territory.

ARTICLE X

1. Income of whatever nature derived from real property within

the territory of the United Kingdom (other than income from

mortgages or bonds secured by real property) by a resident of

Sweden who is subject to tax in the United Kingdom in respect

thereof shall be exempt from tax in Sweden.

2. Any royalty or other amount paid in respect of the operation of

a mine or quarry or of any other extraction of natural resources

within the territory of the United Kingdom to a resident of

Sweden who is subject to tax in the United Kingdom in respect

thereof, shall be exempt from tax in Sweden.

3. Swedish tax payable in respect of income of the kind referred to

in the preceding paragraphs, derived from sources within

Sweden by a resident of the United Kingdom who is liable to

tax in the United Kingdom in respect thereof, shall in

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accordance with Article XIX be allowed as a credit against the

United Kingdom tax payable in respect of that income.

ARTICLE XI

1. Where under the provisions of this Convention a resident of the

United Kingdom is exempt or entitled to relief from Swedish

tax, similar exemption or relief shall be applied to the undivided

estates of deceased persons in so far as one or more of the

beneficiaries is a resident of the United Kingdom.

2. Swedish tax on the undivided estate of a deceased person shall,

in so far as the income accrues to a beneficiary who is resident

in the United Kingdom, be allowed as a credit under Article

XIX.

ARTICLE XII

A resident of one of the territories who does not carry on a trade

or business in the other territory

establishment situated therein shall be

territory from any tax on gains from

exchange of capital assets.

ARTICLE XIII

through a permanent

exempt in that other

the sale, transfer, or

1. Remuneration or pensions paid by, or out of funds created by,

one of the High Contracting Parties to any individual in respect

of services rendered to that Party in the discharge of

governmental functions shall be exempt from tax in the territory

of the other High Contracting Party, unless the individual is a

national of that other Party without being also a national of the

first-mentioned Party.

2. The provisions of this Article shall not apply to payments in

respect of services rendered in connection with any trade or

business carried on by either of the High Contracting Parties for

purposes of profit.

ARTICLE XIV

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1. An individual who is a resident of the United Kingdom shall be

exempt from Swedish tax on profits or remuneration in respect

of personal (including professional) services performed within

Sweden in any year of assessment if—

(a) he is present within Sweden for a period or periods not

exceeding in the aggregate 183 days during that year; and

(b) the services are performed for or on behalf of a resident of

the United Kingdom, and

tax.

2. An individual who is a resident of Sweden shall be exempt from

United Kingdom tax on profits or remuneration in respect of

personal (including professional) services performed within the

United Kingdom in any year of assessment, if—

(a) he is present within the United Kingdom for a period or

periods not exceeding in the aggregate 183 days during

that year, and

(b) the services are performed for or on behalf of a resident of

Sweden, and

3. The provisions of this Article shall not apply to the profits or

remuneration of public entertainers such as theatre, motion

picture or radio artists, musicians and athletes.

ARTICLE XV

1. Any pension (other than a pension of the kind referred to in

paragraph 1 of Article XIII) and any annuity, derived from

sources within Sweden by an individual who is a resident of the

United Kingdom and subject to United Kingdom tax in respect

thereof, shall be exempt from Swedish tax.

2. Any pension (other than a pension of the kind referred to in

paragraph 1 of Article XIII) and any annuity, derived from

sources within the United Kingdom by an individual who is a

resident of Sweden and subject to Swedish tax in respect

thereof, shall be exempt from the United Kingdom tax.

3. The term ―annuity‖ means a stated sum payable periodically at

stated times, during life or during a specified or ascertainable

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period of time, under an obligation to make the payments in

return for adequate and full consideration in money or money‘s

worth.

ARTICLE XVI

A professor or teacher from one of the territories, who receives

remuneration for teaching, during a period of temporary

residence not exceeding 2 years, at a university, college or other

establishment for further education in the other territory, shall

be exempt from tax in that other territory in respect of that

remuneration.

ARTICLE XVII

A student or business apprentice from one of the territories who

is receiving full-time education or training in the other territory,

shall be exempt from tax in that other territory on payments

made to him by persons in the first-mentioned territory for the

purposes of his maintenance, education or training.

ARTICLE XVIII

1. Individuals who are residents of Sweden shall be entitled to the

same personal allowances, reliefs and reductions for the

purposes of United Kingdom tax as British subjects not resident

in the United Kingdom.

Individuals who are residents of the United Kingdom shall be

entitled to the same personal allowances, reliefs and reductions

for the purposes of Swedish tax as those to which Swedish

nationals not resident in Sweden may be entitled.

ARTICLE XIX

1. Subject to the provisions of the law of the United Kingdom

regarding the allowance as a credit against United Kingdom tax

of tax payable in a territory outside the United Kingdom,

Swedish tax payable under the laws of Sweden and in

accordance with this Convention, whether directly or by

deduction, in respect of income from sources within Sweden

shall be allowed as a credit against any United Kingdom tax

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payable in respect of that income. Where such income is an

ordinary dividend paid by a company which is a resident of

Sweden the credit shall take into account (in addition to any

Swedish tax appropriate to the dividend) the Swedish tax

payable by the company in respect of its profits; and, where it is

a dividend paid on participating preference shares and

representing both a dividend at the fixed rate to which the

shares are entitled and an additional participation in profits, the

Swedish tax so payable by the Company shall likewise be taken

into account in so far as the dividend exceeds that fixed rate.

2. Income from sources within the United Kingdom which under

the laws of the United Kingdom and in accordance with this

Convention is subject to tax in the United Kingdom either

directly or by deduction shall be exempt from Swedish tax:

Provided that where such income is a dividend paid by a

company being a resident of the United Kingdom to a person

resident in Sweden, not being a company, whether or not he is

also resident in the United Kingdom, Swedish tax may be

charged on the amount of the dividend after deduction of

United Kingdom income tax, but the amount of Swedish tax

chargeable shall be reduced by a sum equal to 20%. of the

amount of the dividend so charged.

3. Where income is derived from sources outside both the United

Kingdom and Sweden by a person who is resident in the United

Kingdom for the purposes of United Kingdom tax and also

resident in Sweden for the purposes of Swedish tax, the income

may be taxed in both countries (subject to any Convention

which may exist between either of the High Contracting Parties

and the territory or territories from which the income is

derived), but the Swedish tax on that income shall be limited to

tax on the proportion of such income represented by the

proportion which such person‘s income from sources in Sweden

bears to the sum of his income from sources in Sweden and of

his income from sources in the United Kingdom, and the United

Kingdom tax on that income shall be reduced by a credit, in

accordance with paragraph 1 of this Article, for the Swedish tax

on the proportion of that income so computed.

4. The special tax payable in Sweden by public entertainers such

as theatre and radio artists, musicians and athletes

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(bevillningsavgift för vissa offentliga f‖restallningar) shall be

regarded, for the purposes of this Article, as Swedish tax.

5. For the purposes of this Article, profits or remuneration for

personal (including professional) services performed in one of

the territories shall be deemed to be income from sources within

that territory, and the services of an individual whose services

are wholly or mainly performed in ships or aircraft operated by

a resident of one of the territories shall be deemed to be

performed in that territory.

6. That graduated rate of Swedish tax to be imposed on residents

of Sweden may be calculated as though income exempted under

this Convention were included in the amount of the total

income.

ARTICLE XX

1. The taxation authorities of the High Contracting Parties shall

exchange such information (being information which is at their

disposal under their respective taxation laws in the normal

course of administration) as is necessary for carrying out the

provisions of the present Convention or for the prevention of

fraud or for the administration of statutory provisions against

legal avoidance in relation to the taxes which are the subject of

the present Convention. Any information so exchanged shall be

treated as secret and shall not be disclosed to any person other

than those concerned with the assessment and collection of the

taxes which are the subject of the present Convention. No

information as aforesaid shall be exchanged which would

disclose any trade, business, industrial or professional secret or

trade process.

2. As used in these Articles, the term ―taxation authorities‖ means,

in the case of the United Kingdom, the Commissioners of

Inland Revenue; in the case of Sweden, the Finance Ministry;

and, in the case of any territory to which the present Convention

is extended under Article XXIII, the competent authority for the

administration in such territory of the taxes to which the present

Convention applies.

ARTICLE XXI

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The following agreements between the United Kingdom and

Sweden shall not have effect for any period for which the

present Convention has effect, that is to say—

(a) the agreement dated 19th December, 1924 (1) for the

reciprocal exemption from income tax in certain cases of

profits accruing from the business of shipping;

(b) the agreement dated 6th July, 1931, (2) for the reciprocal

exemption from taxes in certain cases of profits arising

through agencies.

ARTICLE XXII

1. The nationals of one of the High Contracting Parties shall not

be subjected in the territory of the other High Contracting Party

to any taxation or any requirements connected therewith which

is other, higher, or more burdensome than the taxation and

connected requirements for which the nationals of the latter

Party are or may be subjected.

2. The enterprises of one of the territories shall not be subject in

the other territory, in respect of profits attributable to their

permanent establishments in that other territory, to any taxation

which is other, higher or more burdensome than the taxation to

which the enterprises of that other territory are or may be

suspected in respect of the like profits.

3. An individual or company being a resident of one of the

territories shall not be subject to any tax on capital in the other

territory which is other, higher or more burdensome than the tax

on capital to which an individual or, as the case may be, a

company, being a resident of that other territory is or may be

subjected.

4. Nothing in paragraph 1 or paragraph 2 of this Article shall be

construed as obliging one of the High Contracting Parties to

grant to nationals of the other High Contracting Party who are

not resident in the territory of the former Party the same

personal allowances, reliefs and reductions for tax purposes as

are granted to his own nationals.

5. In this Article the term ―nationals‖ means—

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(a) in relation to Sweden, all Swedish subjects and all legal

persons, partnerships and associations deriving their

status as such from the law in force in Sweden;

(b) in relation to the United Kingdom, all British subjects and

British-protected persons residing in the United Kingdom

or any British territory to which the present Convention

applies by reason of extension made under Article XXIII

and all legal persons, partnerships and associations

deriving their status as such from the law in force in any

British territory to which the present Convention applies.

6. In this Article the term ―taxation‖ means taxes of every kind

and description levied on behalf of any authority whatsoever.

ARTICLE XXIII

1. The present Convention may be extended, either in its entirety

or with modifications, to any territory for whose foreign

relations the United Kingdom is responsible and which imposes

taxes substantially similar in character to those which are the

subject of the present Convention, and any such extension shall

take effect from such date and subject to such modifications and

conditions (including conditions as to termination) as may be

specified and agreed between the High Contracting Parties in

notes to be exchanged for this purpose.

2. The termination in respect of Sweden or the United Kingdom of

the present Convention under Article XXV shall, unless

otherwise expressly agreed by both High Contracting Parties,

terminate the application of the present Convention to any

territory to which the Convention has been extended under this

Article.

ARTICLE XXIV

1. The present Convention shall be ratified by the High

Contracting Parties. Ratification by His Majesty the King of

Sweden shall be subject to the consent of the Riksdag.

2. The instruments of ratification shall be exchanged at Stockholm

as soon as possible.

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3. Upon exchange of ratifications the present Convention shall

have effect—

(a) In Sweden:

as respects tax on income which is assessed in or after the

calendar year beginning on 1st January, 1950, being

income for which preliminary tax is payable during the

period 1st March, 1949, to 28th February, 1950; or any

succeeding period;

as respects coupon tax payable on or after 1st January

1949;

as respects capital tax which is assessed in or after the

calendar year beginning on 1st January, 1950.

(b) In the United Kingdom:

as respects income tax for any year of assessment

beginning on or after 6th April, 1949;

as respects surtax for any year of assessment beginning on

or after 6th April, 1948; and

as respects profits tax in respect of the following

profits:—

(i) profits arising in any chargeable accounting period

beginning on or after 1st April, 1949;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is, or but for the present

Convention would be chargeable for any year of

assessment beginning on or after 6th April, 1949.

ARTICLE XXV

The present Convention shall continue in effect indefinitely but

either of the High Contracting Parties may, on or before 30th

June in any calendar year not earlier than the year 1953, give to

the other High Contracting Party, through diplomatic channels,

written notice of termination and, in such event, the present

Convention shall cease to be effective—

(a) In Sweden:

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as respects tax on income for which preliminary tax is

payable after the last day of February in the calendar year

next following that in which the notice is given;

as respects coupon tax payable on or after 1st January in

the calendar year next following that in which the notice

is given.

as respects capital tax assessed in or after the second

calendar year following that in which the notice is given.

(b) In the United Kingdom:

as respects income tax for any year of assessment

beginning on or after 6th April in the calendar year next

following that in which the notice is given;

as respects surtax for any year of assessment beginning on

or after 6th April in the calendar year in which the notice

is given; and

as respects profits tax in respect of the following

profits:—

(i) profits arising in any chargeable accounting period

beginning on or after 1st April in the calendar year

next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is chargeable for any year of

assessment beginning on or after 6th April in the

next following calendar year.

In witness whereof the above-mentioned plenipotentiaries have

signed the present Convention and have affixed thereto their

seals.

Done at London, in duplicate, in the English and Swedish

languages, both texts being equally authentic, on the thirtieth

day of March, one thousand nine hundred and forty-nine.

(L.S.) WILLIAM STRANG

(L.S.) GUNNAR HAGGLOF.

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SCHEDULE 2

(Section 2)

1. APPLICATION

(1) The provisions of the Convention incorporated in Schedule 1 to

this Order shall apply as modified below—

(a) as if the contracting parties were Saint Lucia and the

Government of Sweden; and as if the tax concerned in the

case of Saint Lucia were income tax;

(b) as if references to the date of signature were references to

18 December 1953.

(2) The extension

(a) has effect in Saint Lucia as respects tax for the year of

assessment beginning in the calendar year next following

the date of this Order and for subsequent years of

assessment; and

(b) has effect in Sweden—

as respects Swedish tax on income for which preliminary

tax is payable after the last day of February in the

calendar year next following the date of this Order;

as respects Swedish coupon tax payable on or after 1

January in the calendar year next following the date of

this Order;

as respects Swedish capital tax assessed in or after the

second calendar year next following that date.

(3) The extension continues in effect indefinitely but may be

terminated as respects Saint Lucia by written notice of

termination given on or before 30 June in any calendar year by

either of the High Contracting Parties to the Convention to the

other High Contracting Party through the diplomatic channel

and in such event the extension—

(a) ceases to have effect in Saint Lucia as respects tax for the

year of assessment beginning in the calendar year next

following the date of such notice and for subsequent years

of assessment; and

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(b) ceases to have effect in Sweden as respects Swedish tax

on income for which preliminary tax is payable after the

last day of February in the calendar year next following

that in which the notice is given, as respects Swedish

coupon tax payable on or after 1 January in the calendar

year next following that in which the notice is given, and

as respects Swedish capital tax assessed in or after the

second calendar year next following that in which the

notice is given.

2. MODIFICATIONS

(1) In article VII(1) of the Convention the words ―exempt from

United Kingdom Surtax‖ shall be understood for the purposes

of this extension as though they read ―is not liable to tax in the

territory at a rate in excess of the rate applicable to a company‖.

(2) Article VIII is considered to be deleted.

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INCOME TAX (DOUBLE TAXATION RELIEF)

(CANADA) ORDER – SECTION 60

(Statutory Instrument 19/1953)

Commencement [4 April 1953]

WHEREAS it is provided by section 52(1) of the Income Tax

Act, 194711 that if the Governor General by order declares that

arrangements specified in the order have been made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to income tax

despite anything in any enactment;

AND WHEREAS by an Agreement dated 5 June 1946, between

the Government of the United Kingdom and the Government of

Canada, arrangements were made, among other things, for the

avoidance of double taxation;

AND WHEREAS provision is made in the said Agreement for the

application by means of a notification of extension given to the

other Government by either of the said Governments of the said

Agreement to all or any of its colonies, overseas territories,

protectorates or territories in respect of which it exercises a

mandate or trusteeship, that impose taxes substantially similar

in character to those that are the subject of the said Agreement:

AND WHEREAS by a notification dated 9 May 1952, the said

Agreement was applied to Saint Lucia.

1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(Canada) Order.

11 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in the Schedule to this

Order subsist between the Government of Saint Lucia and

the Government of Canada in manner provided by Article

XV of the Schedule to this Order;

(b) that it is expedient that those arrangements have effect

subject to modification of Article VI(3) of the Agreement

contained in the Schedule to this Order substituting for

the words ―shall be exempt from United Kingdom surtax‖

of the words ―is not liable to tax in Saint Lucia at a rate in

excess of the rate applicable to a company‖.

SCHEDULE

(Section 2)

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED

KINGDOM AND THE GOVERNMENT OF CANADA FOR THE

AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of Canada, desiring to

conclude an agreement for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income,

have agreed as follows—

ARTICLE I

(1) The taxes which are the subject of the present Agreement are—

(a) In Canada:

The income taxes, including surtaxes and excess profits

tax imposed by Canada (hereinafter referred to as

―Canadian tax‖).

(b) In the United Kingdom:

The income tax (including surtax), the excess profits tax

and the national defence contribution (hereinafter referred

to as ―United Kingdom tax‖).

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(2) The present Agreement shall also apply to any other taxes of a

substantially similar character imposed by either Contracting

Government subsequently to the date of signature of the present

Agreement or by the Government of any territory to which the

present Agreement is extended under Article XV.

ARTICLE II

(1) In the present Agreement, unless the context otherwise

requires—

(a) The term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man.

(b) The terms ―one of the territories‖ and ―the other territory‖

mean the United Kingdom or Canada, as the context

requires.

tax, as the context requires.

(d) The term ―person‖ includes any body of persons,

corporate or not corporate.

(e) The term ―company‖ includes any body corporate.

(f) The terms ―resident of the United Kingdom‖ and

―resident of Canada‖ mean respectively any person who is

resident in the United Kingdom for the purposes of

United Kingdom tax and not resident in Canada for the

purposes of Canadian tax and any person who is resident

in Canada for the purposes of Canadian tax and not

resident in the United Kingdom for the purposes of

United Kingdom tax; and a company shall be regarded as

resident in the United Kingdom if its business is managed

and controlled in the United Kingdom and as resident in

Canada if its business is managed and controlled in

Canada.

(g) The terms ―resident of one of the territories‖ and ―resident

of the other territory‖ mean a person who is a resident of

the United Kingdom or a person who is a resident of

Canada, as the context requires.

(h) The terms ―United Kingdom enterprise‖ and ―Canadian

enterprise‖ mean respectively an industrial or commercial

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enterprise or undertaking carried on by a resident of the

United Kingdom and an industrial or commercial

enterprise or undertaking carried on by a resident of

Canada; and the terms ―enterprise of one of the

territories‖ and ―enterprise of the other territory‖ mean a

United Kingdom enterprise or a Canadian enterprise, as

the context requires.

(i) The term ―permanent establishment‖ when used with

respect to an enterprise of one of the territories, means a

branch or other fixed place of business, but does not

include an agency unless the agent has, and habitually

exercises, a general authority to negotiate and conclude

contracts on behalf of such enterprise or has a stock of

merchandise from which he regularly fills orders on its

behalf.

An enterprise of one of the territories shall not be deemed

to have a permanent establishment in the other territory

merely because it carries on business dealings in that

other territory through a bona fide broker or general

commission agent acting in the ordinary course of his

business as such.

The fact that an enterprise of one of the territories

maintains in the other territory a fixed place of business

exclusively for the purchase of goods or merchandise

shall not of itself constitute that fixed place of business a

permanent establishment of the enterprise.

The fact that a company which is a resident of one of the

territories has a subsidiary company which is a resident of

the other territory or which is engaged in trade or business

in that other territory (whether through a permanent

establishment or otherwise) shall not of itself constitute

that subsidiary company a permanent establishment of its

parent company.

(2) The term ―industrial or commercial profits‖, as used in the

present Agreement, does not include income in the form of

dividends, interest, rents or royalties, management charges, or

remuneration for labour or personal services.

(3) In the application of the provisions of the present Agreement by

one of the Contracting Governments any term not otherwise

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defined shall, unless the context otherwise requires, have the

meaning which it has under the laws of that Contracting

Government relating to the taxes which are the subject of the

present Agreement.

ARTICLE III

(1) The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to a Canadian tax unless the

enterprise is engaged in trade or business in Canada through a

permanent establishment situated therein. If it so engaged, tax

may be imposed on those profits by Canada, but only on so

much of them as is attributable to that permanent establishment.

(2) The industrial or commercial profits of a Canadian enterprise

shall not be subject to United Kingdom tax unless the enterprise

is engaged in trade or business in the United Kingdom through

a permanent establishment situated therein. If it is so engaged,

tax may be imposed on those profits by the United Kingdom,

but only on so much of them as is attributable to that permanent

establishment; Provided that nothing in this paragraph shall

affect any provisions of the law of the United Kingdom

regarding the imposition of excess profits tax and national

defence contribution in the case of inter-connected companies.

(3) Where an enterprise of one of the territories is engaged in trade

or business in the other territory through a permanent

establishment situated therein, there shall be attributed to such

permanent establishment the industrial or commercial profits

which it might be expected to derive if it were an independent

enterprise engaged in the same or similar activities under the

same or similar conditions and dealing at arm‘s length with the

enterprise of which it is a permanent establishment.

(4) No portion of any profits arising from the sale of goods or

merchandise by an enterprise of one of the territories shall be

deemed to arise in the other territory by reason of the mere

purchase of the goods or merchandise within that other

territory.

(5) Where a company which is a resident of one of the territories

derives profits or income from sources within the other

territory, the Government of that other territory shall not impose

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any form of taxation on dividends paid by the company to

persons not resident in that other territory, or any tax in the

nature of an undistributed profits tax on undistributed profits of

the company, by reason of the fact that those dividends or

undistributed profits represent, in whole or in part, profits or

income so derived.

ARTICLE IV

Where—

(a) an enterprise of one of the territories directly or indirectly

in the management, control or capital of an enterprise of

the other territory, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory, and

2 enterprises, in their commercial or financial relations,

which differ from those which would be made between

independent enterprises,

then any profits which would but for those conditions have

accrued to one of the enterprises but by reason of those

conditions have not so accrued may be included in the profits of

that enterprise and taxed accordingly.

ARTICLE V

Notwithstanding the provisions of Articles III and IV, profits

which a resident of one of the territories derives from operating

ships or aircraft shall be exempt from tax in the other territory.

ARTICLE VI

(1) The rate of Canadian tax on income (other than earned income)

derived from sources within Canada by a resident of the United

Kingdom who is subject to United Kingdom tax in respect

thereof and not engaged in trade or business in Canada through

a permanent establishment situated therein, shall not exceed

15%.

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(2) Notwithstanding the provisions of the foregoing paragraph,

dividends paid to a company which is a resident of the United

Kingdom by a Canadian company, all of whose shares (less

directors‘ qualifying shares) which have under all

circumstances full voting rights are beneficially owned by the

former company, shall be exempt from Canadian Tax.

Provided that exemption shall not be allowed if ordinarily more

than one-quarter of the gross income of the Canadian company

is derived from interest and dividends other than interest and

dividends from any wholly-owned subsidiary company.

(3) Income (other than earned income) derived from sources within

the United Kingdom by an individual who is a resident of

Canada, subject to Canadian tax in respect of the income, and

not engaged in trade or business in the United Kingdom through

a permanent establishment situated therein, shall be exempt

from United Kingdom surtax.

ARTICLE VII

the production or reproduction of any literary, dramatic,

musical or artistic work (but not including rents or royalties in

respect of motion picture films) and derived from sources

within one of the territories by a resident of the other territory

who is liable to tax in that other territory in respect thereof and

not engaged in trade or business in the first-mentioned territory

through a permanent establishment situated therein, shall be

exempt from tax in that first-mentioned territory.

ARTICLE VIII

(1) Remuneration (other than pensions) paid by one of the

Contracting Governments to any individual for services

rendered to that Contracting Government in the discharge of

governmental functions shall be exempt from tax in the territory

of the other Contracting Government if the individual is not

ordinarily resident in that territory or is ordinarily resident in

that territory solely for the purpose of rendering those services.

(2) Any pension paid by one of the Contracting Governments to

any individual for services rendered to that Contracting

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Government in the discharge of governmental functions shall be

exempt from tax in the territory of the Contracting Government,

if immediately prior to the cessation of those services the

remuneration therefor was exempt from tax in that territory,

whether under paragraph (1) of this Article or otherwise, or

would have been exempt under that paragraph if the present

Agreement had been in force at the time when the remuneration

was paid.

(3) The provisions of this Article shall not apply to payments in

respect of services rendered in connection with any trade or

business carried on by either of the Contracting Governments

for purposes of profit.

ARTICLE IX

(1) An individual who is a resident of the United Kingdom shall be

exempt from Canadian tax on profits or remuneration in respect

of personal (including professional) services performed within

Canada in any taxation year if—

(a) he is present within Canada for a period or periods not

exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a person

resident in the United Kingdom, and

tax.

(2) An individual who is a resident of Canada shall be exempt from

United Kingdom tax on profits or remuneration in respect of

personal (including professional) services performed within the

United Kingdom in any year of assessment if—

(a) he is present within the United Kingdom for a period or

periods not exceeding in the aggregate 183 days during

that year, and

(b) the services are performed for or on behalf of a person

resident in Canada, and

(3) The provisions of this Article shall not apply to the profits or

remuneration of public entertainers such as stage, motion

picture or radio artists, musicians and athletes.

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ARTICLE X

(1) Any pension (other than a pension paid by the Government of

Canada for services rendered to it in the discharge of

governmental functions) and any annuity, derived from sources

within Canada by an individual who is a resident of the United

Kingdom and subject to United Kingdom tax in respect thereof,

shall be exempt from Canadian tax.

(2) Any pension (other than a pension paid by the Government of

the United Kingdom for services rendered to it in the discharge

of governmental functions) and any annuity, derived from

sources within the United Kingdom by an individual who is a

resident of Canada and subject to Canadian tax in respect

thereof, shall be exempt from United Kingdom tax.

(3) The term ―annuity‖ means a stated sum payable periodically at

stated times, during life or during a specified or ascertainable

period of time, under an obligation to make the payments in

consideration of money paid.

ARTICLE XI.

A professor or teacher from one of the territories who receives

remuneration for teaching, during a period of temporary

residence not exceeding 2 years, at a university, college, school

or other educational institution in the other territory, shall be

exempt from tax in that other territory in respect of that

remuneration.

ARTICLE XII

A student or business apprentice from one of the territories who

is receiving full-time education or training in the other territory

shall be exempt from tax in that other territory on payments

made to him by persons in the first-mentioned territory for the

purposes of his maintenance, education or training.

ARTICLE XIII

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(1) Subject to the provisions of the law of the United Kingdom

regarding the allowance as a credit against United Kingdom tax

of tax payable in a territory outside the United Kingdom,

Canadian tax payable in respect of income from sources within

Canada shall be allowed as a credit against any United

Kingdom tax payable in respect of that income. Where such

income is an ordinary dividend paid by a Canadian debtor, the

credit shall take into account (in addition to any Canadian

income tax chargeable directly or by deduction in respect of the

dividend) the Canadian income tax payable in respect of its

profits by the company paying the dividend, and where it is a

dividend paid on participating preference shares and

representing both a dividend at a fixed rate to which the shares

are entitled and an additional participation in profits, the

Canadian income tax so payable by the company shall likewise

be taken into account in so far as the dividend exceeds that

fixed rate.

(2) For the purposes of the foregoing paragraph and of the

aforesaid provisions of the law of the United Kingdom, so much

of the tax chargeable under the law of Canada relating to excess

profits tax as is chargeable otherwise than by reference to

excess profits shall be treated as income tax and not as excess

profits tax.

(3) Subject to the provisions of the law of Canada regarding the

deduction from tax payable in Canada of tax paid in a territory

outside Canada, United Kingdom tax payable in respect of

income from sources within the United Kingdom shall be

deducted from any Canadian tax payable in respect of that

income. Where such income is an ordinary dividend paid by a

company resident in the United Kingdom, the deduction shall

take into account (in addition to any United Kingdom income

tax appropriate to the dividend) the United Kingdom national

defence contribution payable by the company in respect of its

profits, and where it is a dividend paid on participating

preference shares and representing both a dividend at the fixed

rate to which the shares are entitled and an additional

participation in profits, the national defence contributions so

payable by the company shall likewise be taken into account in

so far as the dividend exceeds that fixed rate.

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(4) For the purposes of this Article, profits or remuneration for

personal (including professional) services performed in one of

the territories shall be deemed to be income from sources within

that territory, and the services of an individual whose services

are wholly or mainly performed in ships or aircraft operated by

a resident of one of the territories shall be deemed to be

performed in that territory.

ARTICLE XIV

(1) The taxation authorities of the Contracting Governments shall

exchange such information (being information available under

the respective taxation laws of the Contracting Governments) as

is necessary for carrying out the provisions of the present

Agreement or for the prevention of fraud or the administration

of statutory provisions against legal avoidance in relation to the

taxes which are the subject of the present Agreement. Any

information so exchanged shall be treated as secret and shall not

be disclosed to any persons other than those concerned with the

assessment and collection of the taxes which are the subject of

the present Agreement. No information shall be exchanged

which would disclose any trade secret or trade process.

(2) The taxation authorities of the Contracting Governments may

consult together as may be necessary for the purpose of

carrying out the provisions of the present Agreement and, in

particular, the provisions of Articles III and IV.

(3) As used in this Article, the term ―taxation authorities‖ means, in

the case of Canada, the Minister of National Revenue or his

authorised representative; in the case of the United Kingdom,

the Commissioners of Inland Revenue or their authorised

representative; and, in the case of any territory to which the

present Agreement is extended under Article XV, the competent

authority for the administration in such territory of the taxes to

which the present Agreement applies.

ARTICLE XV

(1) Either of the Contracting Governments may, on the coming into

force of the present Agreement or at any time thereafter while it

continues in force, by a written notification of extension given

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to the other Contracting Government, declare its desire that the

operation of the present Agreement shall extend, subject to such

modification as may be necessary, to all or any of its colonies,

overseas territories, protectorates, or territories in respect of

which it exercises a mandate or trusteeship, which impose taxes

substantially similar in character to those which are the subject

of the present Agreement. The present Agreement shall, subject

to such modifications (if any) as may be specified in the

notification, apply to the territory or territories named in such

notification on the date or dates specified in the notification (not

being less than 60 days from the date of the notification) or, if

no date is specified in respect of any such territory, on the

sixtieth day after the date of the notification, unless prior to the

date on which the Agreement would otherwise become

applicable to a particular territory, the Contracting Government

to whom notification is given shall have informed the other

Contracting Government in writing that it does not accept the

notification as to that territory. In the absence of such extension,

the present Agreement shall not apply to any such territory.

(2) At any time after the expiration of one year from the entry into

force of an extension under paragraph (1) of this Article, either

of the Contracting Governments may, by written notice of

termination given to the other Contracting Government,

terminate the application of the present Agreement to any

territory to which it has been extended under paragraph (1), and

in that event the present Agreement shall cease to apply, 6

months after the date of the notice, to the territory or territories

named therein, but without affecting its continued application to

Canada, the United Kingdom or to any other territory to which

it has been extended under paragraph (1) hereof.

(3) In the application of the present Agreement in relation to any

territory to which it is extended by notification by the United

Kingdom or Canada, references to the ―United Kingdom‖ or, as

the case may be, ―Canada‖ shall be construed as references to

that territory.

(4) The termination in respect of Canada or the United Kingdom of

the present Agreement under Article XVIII shall, unless

otherwise expressly agreed by both Contracting Governments,

terminate the application of the present Agreement to any

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territory to which the Agreement has been extended by Canada

or the United Kingdom.

(5) The provisions of the preceding paragraphs of this Article shall

apply to the Channel Islands and the Isle of Man as if they were

colonies of the United Kingdom.

ARTICLE XVI

The present Agreement shall come into force on the date on

which the last of all such things shall have been done in the

United Kingdom and Canada as are necessary to give the

Agreement the force of law in the United Kingdom and Canada

respectively, and shall thereupon have effect—

(a) in Canada as respects income taxes, including surtaxes,

for the taxation year 1946 and subsequent years, and as

respects excess profits tax for any fiscal period beginning

on or after the first day of January, 1946, and for the

unexpired portion of any fiscal period current at that date;

(b) in the United Kingdom, as respects income tax for the

year of assessment beginning on the 6th day of April,

1946, and subsequent years; as respects surtax for the year

of assessment beginning on the 6th day of April, 1945,

and subsequent years; and as respects excess profits tax

and national defence contribution for any chargeable

accounting period beginning on or after the first day of

January, 1946, and for unexpired portion of any

chargeable accounting period current at that date.

ARTICLE XVII

The present Agreement shall be deemed to have superseded the

Agreements made on the 8th day of May, 1930, and the 3rd day

of October, 1935, between the Government of the United

Kingdom and the Government of Canada for reciprocal

exemption from income tax in certain cases of profits accruing

from the business of shipping and profits or gains accruing

through an agency respectively, and those Agreements shall

cease to have effect—

(a) in Canada, for the taxation year 1946 and subsequent

years;

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(b) in the United Kingdom, as respects income tax for the

year of assessment beginning on the 6th day of April,

1946, and subsequent years, and as respects surtax for the

year of assessment beginning on the 6th day of April,

1945, and subsequent years.

ARTICLE XVIII

(1) The present Agreement shall continue in effect indefinitely but

either of the Contracting Governments may, on or before the

30th day of June in any calendar year after the year 1947, give

notice of termination to the other Contracting Government and,

in such event, the present Agreement shall cease to be

effective—

(a) in Canada, as respects income taxes, including surtaxes,

for any taxation year ending in or after the calendar year

next following that in which such notice is given, and as

respects excess profits tax for any fiscal period beginning

on or after the first day of January in the calendar year

next following that in which such notice is given and for

the unexpired portion of any fiscal period current at that

date;

(b) in the United Kingdom, as respects income tax for any

year of assessment beginning on or after the 6th day of

April in the calendar year next following that in which

such notice is given; as respects surtax for any year of

assessment beginning on or after the 6th day of April in

the calendar year in which such notice is given, and as

respects excess profits tax or national defence

contribution for any chargeable accounting period

beginning on or after the first day of January in the

calendar year next following that in which such notice is

given and for the unexpired portion of any chargeable

accounting period current at that date.

(2) The termination of the present Agreement shall not have the

effect of reviving any agreement or arrangement abrogated by

the present Agreement or by agreements previously concluded

between the Contracting Governments.

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IN WITNESS thereof the undersigned, duly authorised thereto,

have signed the present Agreement and have affixed thereto

their seals.

Done at London, in duplicate, on the fifth day of June, one

thousand nine hundred and forty-six.

For the Government of the United Kingdom:

[L.S.]

Hugh Dalton.

For the Government of Canada:

[L.S.]

W. L. Mackenzie King.

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INCOME TAX (DOUBLE TAXATION RELIEF)

(DENMARK) ORDER – SECTION 60

(Statutory Instrument appearing in volume 7, page 1106 of the 1957 Revision of the

Laws of Saint Lucia)

WHEREAS it is provided by section 52(1) of the Income Tax

Act, 194712 that if the Governor General by order declares that

arrangements specified in the order were made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to income tax

despite anything in any enactment;

AND WHEREAS by a Convention dated 27 March 1950, between

the Government of the United Kingdom and the Government of

Denmark arrangements were made among other things for the

avoidance of double taxation;

AND WHEREAS provision is made in the said Convention for the

extension by means of an exchange of notes between the High

Contracting Parties of the said Convention, subject to such

modifications and conditions (including conditions as to

termination) as may be specified in the exchange of notes, to

any territory, for whose international relations the United

Kingdom is responsible, which imposes taxes substantially

similar in character to those which are the subject of the said

Convention;

AND WHEREAS by an Exchange of Notes dated respectively 18

November and 22 December 1954 the said Convention with

certain modifications was applied to Saint Lucia.

12 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(Denmark) Order.

2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in Schedule 1 to this

Order, as modified by the provisions of Schedule 2 to this

Order, have been made with the Government of Denmark;

(b) that it is expedient that those arrangements have effect.

SCHEDULE 1

(Section 2)

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED

KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE

GOVERNMENT OF THE KINGDOM OF DENMARK FOR THE

AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of the Kingdom of

Denmark,

Desiring to conclude a Convention for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income,

Have appointed for that purpose as their Plenipotentiaries:

The Government of the United Kingdom of Great Britain and

Northern Ireland:

The Right Honourable Ernest Bevin, M.P., Principal Secretary

of State for Foreign Affairs;

The Government of the Kingdom of Denmark:

His Excellency Count Eduard Reventlow; Ambassador Extra-

ordinary and Plenipotentiary of Denmark in London;

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Who, having exhibited their respective full powers, found in

good and due form, have agreed as follows—

ARTICLE I

1. The taxes which are the subject of the present Convention are:

(a) In Denmark: The national income tax (including the

extraordinary company tax) (hereinafter referred to as

―Danish tax‖).

(b) In the United Kingdom of Great Britain and Northern

Ireland: The income tax (including surtax) and the profits

tax (hereinafter referred to as ―United Kingdom tax‖).

2. The present Convention shall also apply to any other taxes of a

substantially similar character imposed in Denmark or the

United Kingdom subsequently to the date of signature of the

present Convention.

ARTICLE II

1. In the present Convention, unless ‗the context otherwise

requires:

(a) The term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man;

(b) The term ―Denmark‖ means the Kingdom of Denmark,

excluding the Faroe Islands and Greenland;

mean the United Kingdom of Denmark, as the context

requires;

(d) The term ―tax‖ means United Kingdom tax or Danish tax,

as the context requires;

(e) The term ―person‖ includes any body of persons,

corporate or not corporate;

(f) The term ―company‖ means any body corporate;

(g) The terms ―resident of the United Kingdom‖ and

―resident of Denmark‖ mean respectively any person who

is resident in the United Kingdom for the purposes of

United Kingdom tax and not resident in Denmark for the

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purposes of Danish tax, and any person who is resident in

Denmark for the purposes of Danish tax and not resident

in the United Kingdom for the purpose of United

Kingdom tax; a company shall be regarded as resident in

the United Kingdom if its business is managed and

controlled in the United Kingdom and as resident in

Denmark if its business is managed and controlled in

Denmark;

(h) The terms ―resident of one of the territories‖ and ―resident

of the other territory‖ mean a person who is a resident of

the United Kingdom or a person who is a resident of

Denmark, as the context requires;

(i) The terms ―United Kingdom enterprise‖ and ―Danish

enterprise‖ mean respectively an industrial or commercial

enterprise or undertaking carried on by a resident of the

United Kingdom and an industrial or commercial

enterprise or undertaking carried on by a resident of

Denmark, and the terms ―enterprise of one of the

territories‖ and ―enterprise of the other territory‖ mean a

United Kingdom enterprise or a Danish enterprise, as the

context requires;

(j) The term ―industrial or commercial profits‖ includes rents

or royalties in respect of cinematograph films;

(k) The term ―permanent establishment,‖ when used with

respect to an enterprise of one of the territories, means a

branch, management, factory, or other fixed place of

business, but does not include an agency unless the agent

has, and habitually exercises, a general authority to

negotiate and conclude contracts on behalf of such

enterprise or has a stock of merchandise from which he

regularly fills orders on its behalf. In this connection—

(i) An enterprise of one of the territories shall not be

deemed to have a permanent establishment in the

other territory merely because it carries on business

dealings in that other territory through a bono fide

broker or general commission agent acting in the

ordinary course of his business as such;

(ii) The fact that an enterprise of one of the territories

maintains in the other territory a fixed place of

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Revision Date: 31 Dec 2008

business exclusively for the purchase of goods or

merchandise shall not of itself constitute that fixed

place of business a permanent establishment of the

enterprise;

(iii) The fact that a company which is a resident of one

of the territories has a subsidiary company which is

a resident of the other territory or which carries on a

trade or business in that other territory (whether

through a permanent establishment or otherwise)

shall not of itself constitute that subsidiary company

a permanent establishment of its parent company.

2. Where under this Convention any income is exempt from tax in

one of the territories if (with or without other conditions) it is

subject to tax in the other territory, and that income is subject to

tax in that other territory by reference only to the amount

thereof which is remitted to or received in that other territory,

the exemption to be allowed under this Convention in the first-

mentioned territory shall apply only to the amount so remitted

or received.

3. In the application of the provisions of the present Convention

by one of the High Contracting Parties any term not otherwise

defined shall, unless the context otherwise requires, have the

meaning which it has under the laws in force in the territory of

that Party relating to the taxes which are the subject of the

present Convention.

ARTICLE III

1. The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to Danish tax unless the

enterprise carries on a trade or business in Denmark through a

permanent establishment situated therein. If it carries on a trade

or business as aforesaid, tax may be imposed on those profits by

Denmark, but only on so much of them as is attributable to that

permanent establishment.

2. The industrial or commercial profits of a Danish enterprise shall

not be subject to United Kingdom tax unless the enterprise

carries on a trade or business in the United Kingdom through a

permanent establishment situated therein. If it carries on a trade

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or business as aforesaid, tax may be imposed on those profits by

the United Kingdom, but only on so much of them as is

attributable to that permanent establishment.

3. Where an enterprise of one of the territories carries on a trade or

business in the other territory through a permanent

establishment situated therein, there shall be attributed to that

permanent establishment the industrial or commercial profits

which it might be expected to derive in that other territory if it

were an independent enterprise engaged in the same or similar

activities under the same or similar conditions and dealing at

arm‘s length with the enterprise of which it is a permanent

establishment.

4. Where an enterprise of one of the territories derives profits,

under contracts concluded in that territory, from sales of goods

or merchandise stocked in a warehouse in the other territory for

convenience of delivery and not for purposes of display, those

profits shall not be attributed to a permanent establishment of

the enterprise in that other territory, notwithstanding that the

offers of purchase have been obtained by an agent in that other

territory and transmitted by him to the enterprise for

acceptance.

5. No portion of any profits arising to an enterprise of one of the

territories shall be attributable to a permanent establishment

situated in the other territory by reason of the mere purchase of

goods or merchandise within that other territory by the

enterprise.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly

or indirectly in the management, control or capital of an

enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory,

and in either case, conditions are made or imposed between the

2 enterprises, in their commercial or financial relations, which

differ from those which would be made between independent

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enterprises, then any profits which would but for those

conditions have accrued to one of the enterprises but by reason

of those conditions have not so accrued may be included in the

profits of that enterprise and taxed accordingly.

ARTICLE V

1. The industrial and commercial profits of a company which is a

resident of Denmark shall, so long as undistributed profits of

United Kingdom enterprises are effectively charged to United

Kingdom Profits Tax at a lower rate than distributed profits of

such enterprises, be charged to United Kingdom Profits Tax

only at that lower rate.

2. Where a company which is a resident of Denmark controls,

directly or indirectly, not less than 50%, of the entire voting

power of a company which is a resident of the United Kingdom,

distributions by the latter company to the former company shall

be left out of account in computing United Kingdom Profits

Tax effectively chargeable on the latter company at the rate

appropriate to distributed profits.

3. If the industrial and commercial profits of a company which is a

resident of the United Kingdom become chargeable to a form of

Danish tax under which, in the case of companies which are

residents of Denmark, the undistributed or undistributable

income is charged to tax at a lower rate than the distributed or

distributable income of such companies, these industrial and

commercial profits shall be charged to Danish tax only at the

lower rate.

4. Where a company which is a resident of the United Kingdom

beneficially owns not less than 50%, of the entire ordinary

share capital of a company which is a resident of Denmark,

distributed or distributable income payable by the latter

company to the former company shall be left out of account in

computing the liability of the latter company to Danish tax at

any higher rate appropriate to distributed or distributable

income, and this shall apply, in particular, in computing the

liability of the latter company to that part of the Danish

extraordinary tax on companies known as Udbytterate.

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ARTICLE VI

1. Notwithstanding the provisions of Articles III, IV and V, profits

which a resident of one of the territories derives from operating

ships or aircraft shall be exempt from tax in the other territory.

2. The Agreement dated 18th December, 1924, between the

United Kingdom and Denmark for the reciprocal exemption

from Income Tax in certain cases of profits accruing from the

business of shipping shall not have effect for any year or period

for which the present Convention has effect.

ARTICLE VII

(a) Dividends paid by a company which is a resident of the

United Kingdom to a resident of Denmark, who is subject

to tax in Denmark in respect thereof and does not carry on

a trade or business in the United Kingdom through a

permanent establishment situated therein, shall be exempt

from United Kingdom surtax.

(b) Dividends paid by a company which is a resident of

Denmark to a resident of the United Kingdom, who is

subject to tax in the United Kingdom in respect thereof

and does not carry on a trade or business in Denmark

through a permanent establishment situated therein, shall

not be chargeable to tax in addition to the tax on the

profits out of which the dividends are paid at a rate

exceeding 5%.: Provided that where the resident of the

United Kingdom is a company which beneficially owns

not less than 50%, of the entire ordinary share capital of

the company paying the dividends, the dividends shall be

exempt from any such tax on dividends.

2. Where a company which is a resident of one of the territories

derives profits or income from sources within the other

territory, there shall not be imposed in that other territory any

form of taxation on dividends paid by the company to persons

not resident in that other territory, or any tax in the nature of

undistributed profits tax on undistributed profits of the

company, whether or not those dividends or undistributed

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profits represent, in whole or in part, profits or income so

derived.

ARTICLE VIII

1. Any interest or royalty derived from sources within one of the

territories by a resident of the other territory, who is subject to

tax in that other territory in respect thereof and does not carry

on a trade or business in the first-mentioned territory through a

permanent establishment situated therein, shall be exempt from

tax in that first-mentioned territory; but no exemption shall be

allowed in respect of interest paid by a company which is a

resident of one of the territories to a company which is a

resident of the other territory where the latter company controls,

either directly or indirectly, more than 50%, of the entire voting

power of the former company.

2. In this Article—

(a) The term ―interest‖ includes interest on bonds, securities,

notes, debentures or on any other form of indebtedness;

(b) The term ―royalty‖ means any royalty or other amount

paid as consideration for the use of, or for the privilege of

using, any copyright, patent, design, secret process or

formula, trade mark or other like property, but does not

include any royalty or other amount paid in respect of the

operation of a mine or quarry or of any other extraction of

natural resources.

3. Where any interest or royalty exceeds a fair and reasonable

consideration in respect of the indebtedness or rights for which

it is paid, the exemption provided by the present Article shall

apply only to so much of the interest or royalty as represents

such fair and reasonable consideration.

4. Any capital sum derived from one of the territories from the

sale of patent rights by a resident of the other territory who does

not carry on a trade or business in the first-mentioned territory

through a permanent establishment situated therein, shall be

exempt from tax in that first-mentioned territory.

ARTICLE IX

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Income of whatever nature derived from real property within

one of the territories (except interest on mortgages secured on

real property) shall be chargeable to tax in accordance with the

laws of that territory. Where the said income is also chargeable

to tax in the other territory, credit for the tax payable in the

first-mentioned territory shall be given against the tax payable

on that income in the other territory in accordance with Article

XVII.

ARTICLE X

A resident of one of the territories who does not carry on a trade

or business in the other territory through a permanent

establishment situated therein shall be exempt in that other

territory from any tax on gains from the sale, transfer, or

exchange of capital assets.

ARTICLE XI

1. Remuneration, including pensions, paid by, or out of funds

created by, one of the High Contracting Parties to any

individual in respect of services rendered to that Party in

discharge of governmental functions shall be exempt from tax

in the territory of the other High Contracting Party, unless the

individual is a national of that other Party without being also a

national of the first-mentioned Party.

2. The provisions of this Article shall not apply to payments in

respect of services rendered in connection with any trade or

business carried on by either of the High Contracting Parties for

purposes of profit.

ARTICLE XII

1. An individual who is a resident of the United Kingdom shall be

exempt from Danish tax on profits or remuneration in respect of

personal (including professional) services performed within

Denmark in any year of assessment if—

(a) he is present within Denmark for a period or periods not

exceeding in the aggregate 183 days during that year, and

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(b) the services are performed for or on behalf of a resident of

the United Kingdom, and

tax.

2. An individual who is a resident of Denmark shall be exempt

from United Kingdom tax on profits or remuneration in respect

of personal (including professional) services performed within

the United Kingdom in any year of assessment, if—

(a) he is present within the United Kingdom for a period or

periods not exceeding in the aggregate 183 days during

that year, and

(b) the services are performed for or on behalf of a resident of

Denmark, and

3. The provisions of this Article shall not apply to the profits or

remuneration of public entertainers such as theatre, motion

picture or radio artists, musicians and athletes.

ARTICLE XIII

1. Any pension (other than a pension of the kind referred to in

paragraph 1 of Article XI) and any annuity, derived from

sources within Denmark by an individual who is a resident of

the United Kingdom and subject to United Kingdom tax in

respect thereof, shall be exempt from Danish tax.

2. Any pension (other than a pension of the kind referred to in

paragraph 1 of Article XI) and any annuity, derived from

sources within the United Kingdom by an individual who is a

resident of Denmark and subject to Danish tax in respect

thereof, shall be exempt from United Kingdom tax.

3. The term ―annuity‖ means a stated sum payable periodically at

stated times, during life or during a specified or ascertainable

period of time, under an obligation to make the payments in

return for adequate and full consideration in money or money‘s

worth.

ARTICLE XIV

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A professor or teacher from one of the territories, who receives

remuneration for teaching, during a period of temporary

residence not exceeding 2 years, at a university, college, school

or other educational institution in the other territory, shall be

exempt from tax in that other territory in respect of that

remuneration.

ARTICLE XV

A student or business apprentice from one of the territories,

who is receiving full-time education or training in the other

territory, shall be exempt from tax in that other territory on

payments made to him by persons in the first-mentioned

territory for the purposes of his maintenance, education or

training.

ARTICLE XVI

1. Individuals who are residents of Denmark shall be entitled to

the same personal allowances, reliefs and reductions for the

purposes of United Kingdom income tax as British subjects not

resident in the United Kingdom.

2. Individuals who are residents of the United Kingdom shall be

entitled to the same personal allowances and reliefs for the

purposes of Danish tax as Danish nationals not resident in

Denmark.

ARTICLE XVII

1. The laws of the High Contracting Parties shall continue to

govern the taxation of income arising in either of the territories

except where express provision to the contrary is made in this

Convention. Where income is subject to tax in both territories,

relief from double taxation shall be given in accordance with

the following paragraphs.

2. Subject to the provisions of the law of the United Kingdom

regarding the allowance as a credit against United Kingdom tax

of tax payable in a territory outside the United Kingdom,

Danish tax, payable whether directly or by deduction, in respect

of income from sources within Denmark shall be allowed as a

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credit against the United Kingdom tax payable in respect of that

income. Where such income is an ordinary dividend paid by a

company resident in Denmark, the credit shall take into account

(in addition to any Danish tax appropriate to the dividend) the

Danish tax payable by the company in respect of its profits;

and, where it is a dividend paid on participating preference

shares and representing both a dividend at the fixed rate to

which the shares are entitled and an additional participation in

profits, the Danish tax so payable by the company shall

likewise be taken into account in so far as the dividend exceeds

that fixed rate.

3. United Kingdom tax payable, whether directly or by deduction,

in respect of income from sources within the United Kingdom

shall be allowed as a deduction from Danish tax payable in

respect of that income. Provided that the amount of deduction

shall not exceed the proportion of the Danish tax which such

income chargeable to Danish tax bears to the total income

chargeable to Danish tax. For the purposes of this paragraph

only, the expression ―Danish tax‖ shall include the Danish

inter-municipal income tax.

4. In the case of a person who is resident in the United Kingdom

for the purposes of United Kingdom tax and is also resident in

Denmark for the purposes of Danish tax, the provisions of

paragraph 2 of this Article shall apply in relation to income

which that person derives from sources within Denmark, and

the provisions of paragraph 3 of this Article shall apply in

relating to income which he derives from sources within the

United Kingdom. If such person derives income from sources

outside both the United Kingdom and Denmark, tax may be

imposed on that income in both the territories (subject to the

laws in force in the territories and to any Convention which

may exist between either of the High Contracting Parties and

the territory from which the Income is derived). A credit shall

be allowed in accordance with paragraph 2 of this Article

against any United Kingdom tax payable in respect of that

income, equal to that proportion of the United Kingdom tax or

the Danish tax on that income, whichever is the less, which

such person‘s income from sources within the United Kingdom

bears to the sum of his income from sources within the United

Kingdom and his income from sources within Denmark; and a

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deduction shall be allowed in accordance with paragraph 3 of

this Article against any Danish tax payable in respect of that

income equal to that proportion of the United Kingdom tax or

the Danish tax on that income, whichever is the less, which

such person‘s income from sources within Denmark bears to

the sum of his income from sources within the United Kingdom

and his income from sources within Denmark.

5. For the purposes of this Article, profits or remuneration for

personal (including professional) services performed in one of

the territories shall be deemed to be income from sources within

that territory, and the services of an individual whose services

are wholly or mainly performed in ships or aircraft operated by

a resident of one of the territories shall be deemed to be

performed in that territory.

ARTICLE XVIII

1. The taxation authorities of the High Contracting Parties shall

exchange such information (being information which is at their

disposal under their respective taxation laws in the normal

course of administration) as is necessary for carrying out the

provisions of the present Convention or for the prevention of

fraud or for the administration of statutory provisions against

legal avoidance in relation to the taxes which are the subject of

the present Convention. Any information so exchanged shall be

treated as secret and shall not be disclosed to any persons other

than those concerned with the assessment and collection of

taxes which are the subject of the present Convention. No

information as aforesaid shall be exchanged which would

disclose any trade, business, industrial or professional secret or

trade process.

2. As used in this Article, the term ―taxation authorities‖ means, in

the case of the United Kingdom, the Commissioners of Inland

Revenue or their authorised representatives; in the case of

Denmark, the Director General of Taxation or his authorised

representative; and, in the case of any territory to which the

present Convention is extended under Article XX, the

competent authority for the administration in such territory of

the taxes to which the present Convention applies.

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ARTICLE XIX

1. The nationals of one of the High Contracting Parties shall not

be subjected in the territory of the other High Contracting Party

to any taxation or any requirement connected therewith which

is other, higher, or more burdensome than the taxation and

connected requirements to which the nationals of the latter

Party are or may be subjected.

2. The enterprises of one of the territories, whether carried on by a

company, a body of persons or by individuals alone or in

partnership, shall not be subjected in the other territory, in

respect of profits or capital attributable to their permanent

establishments in that other territory, to any taxation which is

other, higher or more burdensome than the taxation to which

the enterprises of that other territory similarly carried on are or

may be subjected in respect of the like profits or capital.

3. The income, profits and capital of an enterprise of one of the

territories, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by a resident or residents of

the other territory shall not be subjected in the first-mentioned

territory to any taxation which is other, higher or more

burdensome than the taxation to which other enterprises of that

first-mentioned territory are or may be subjected in respect of

the like income, profits and capital.

4. Nothing in paragraph 1 or paragraph 2 of this Article shall be

construed as obliging one of the High Contracting Parties to

grant to nationals of the other High Contracting Party who are

not resident in the territory of the former Party the same

personal allowances, reliefs and reductions for tax purposes as

are granted to his own nationals.

5. In this Article the term ―nationals‖ means—

(a) in relation to Denmark, all Danish citizens and all legal

persons, partnerships, associations and other entities

deriving their status as such from the law in force in

Denmark or in any Danish territory to which the present

Convention applies by reason of extension made under

Article XX;

(b) in relation to the United Kingdom, all British subjects and

British-protected persons residing in the United Kingdom

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or any British territory to which the present Convention

applies by reason of extension made under Article XX,

and all legal persons, partnerships, associations and other

entities deriving their status as such from the law in force

in any British territory to which the present Convention

applies.

6. In this Article the term ―taxation‖ means taxes of every kind

and description levied on behalf of any authority whatsoever.

ARTICLE XX

1. The present Convention may be extended, either in its entirety

or with modifications, to any territory of one of the High

Contracting Parties to which this Article applies and which

imposes taxes substantially similar in character to those which

are the subject of the present Convention, and any such

extension shall take effect from such date and subject to such

modifications and conditions (including conditions as to

termination) as may be specified and agreed between the High

Contracting Parties in notes to be exchanged for this purpose.

2. The termination in respect of Denmark or the United Kingdom

of the present Convention under Article XXII shall, unless

otherwise expressly agreed by both High Contracting Parties,

terminate the application of the present Convention to any

territory to which the Convention has been extended under this

Article.

3. The territories to which this Article applies are—

(a) in relation to the United Kingdom: any territory other,

than the United Kingdom for whose international

relations the United Kingdom is responsible;

(b) in relation to Denmark: any territory other than Denmark

for whose international relations Denmark is responsible.

ARTICLE XXI

1. The present Convention shall be ratified and the instruments of

ratification shall be exchanged at London as soon as possible.

2. Upon exchange of ratifications the present Convention shall

have effect—

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(a) In the United Kingdom:

as respects income tax for any year of assessment

beginning on or after the 6th April, 1949;

as respect surtax for any year of assessment beginning on

or after the 6th April, 1948; and

as respects profits tax in respect of the following profits—

(i) profits arising in any chargeable accounting period

beginning on or after the 1st April, 1949;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is, or but for the present

Convention would be, chargeable for any year of

assessment beginning on or after the 6th April,

1949.

(b) In Denmark:

as respects Danish tax for any taxation year beginning on

or after the 1st April, 1949.

ARTICLE XXII

The present Convention shall continue in effect indefinitely but

either of the High Contracting Parties may, on or before the

30th June in any calendar year not earlier than the year 1953,

give to the other High Contracting Party, through diplomatic

channels, written notice of termination and, in such event the

present Convention shall cease to be effective—

(a) In the United Kingdom:

as respects income tax for any year of assessment

beginning on or after the 6th April in the calendar year

next following that in which the notice is given; and

as respects surtax for any year of assessment beginning on

or after the 6th April in the calendar year in which the

notice is given; and

as respects profits tax in respect of the following

profits:—

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(i) profits arising in any chargeable accounting period

beginning on or after the 1st April in the calendar

year next following that in which the notice is

given;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is chargeable for any year of

assessment beginning on or after the 6th April in the

next following calendar year.

(b) In Denmark:

as respects Danish tax for any taxation year beginning on

or after the 1st April in the calendar year next following

that in which the notice is given.

In witness whereof the above-mentioned Plenipotentiaries have

signed the present Convention and have affixed thereto their

seals.

Done at London in duplicate, in the English and Danish

languages, both texts being equally authentic, on the twenty-

seventh day of March, one thousand nine hundred and fifty.

(L.S.) ERNEST BEVIN.

(L.S.) E. REVENTLOW.

SCHEDULE 2

(Section 2)

1. APPLICATION

(1) The provisions of the Convention incorporated in Schedule 1 to

this Order apply as modified below—

(a) as if the contracting parties were Saint Lucia and the

Government of Denmark;

(b) as if the tax concerned in the case of Saint Lucia were

income tax;

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the Defence tax;

(d) as if references to the date of signature were references to

22 December 1954;

(e) as if references to the 6th day of April were references to

1 January 1954.

(2) The extension shall have effect in Saint Lucia as respect tax for

the year of assessment 1954 (or 1954/55) and for subsequent

years of assessment, (and will have effect in Denmark as

respects Danish tax for any taxation year beginning on or after

1 April 1954).

(3) The extension shall continue in effect indefinitely but may be

terminated as respects Saint Lucia by written notice of

termination given on or before 30 June in any calendar year not

earlier than the year 1957 by either of the High Contracting

Parties to the Convention to the other High Contracting Party

through the diplomatic channel and in such event the extension

shall cease to have effect in Saint Lucia as respects tax for the

year of assessment beginning in the calendar year next

following the date of such notice and for subsequent years of

assessment and will cease to have effect in Denmark as respects

Danish tax for any taxation year beginning on or after 1 April in

the calendar year next following that in which the notice is

given.

2. MODIFICATIONS

(1) In Article VII(1) of the Convention the words ―exempt from

United Kingdom surtax‖ shall be understood for the purposes of

this extension as though they read ―is not liable to tax in the

territory at a rate in excess of the rate applicable to a company‖.

(2) In Articles VIII and IX all references to interest shall be

deemed to be deleted.

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INCOME TAX (DOUBLE TAXATION RELIEF)

(NORWAY) ORDER – SECTION 60

(Statutory Instrument appearing in volume 7, page 1119 of the 1957 Revision of the

Laws of Saint Lucia)

WHEREAS it is provided by section 52 of the Income Tax Act,

194713 that if the Governor General by order declares that

arrangements specified in the Order were made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to Income Tax

despite anything in any enactment;

AND WHEREAS by a Convention dated the 2nd day of May,

1951 between the Government of the United Kingdom and the

Government of Norway, arrangements were made among other

things for the avoidance of Double Taxation;

AND WHEREAS provision is made in the said Convention for the

extension by means of an exchange of notes between the

Contracting Parties of the said Convention, subject to such

modifications and conditions (including conditions as to

termination) as may be specified in the exchange of notes, to

any territory, for whose international relations the United

Kingdom is responsible, which imposes taxes substantially

similar in character to those which are the subject of the said

Convention;

AND WHEREAS by an Exchange of Notes dated 18 May 1955,

the said Convention with certain modifications was applied to

Saint Lucia.

NOW, THEREFORE, it is hereby ordered and declared by His

Excellency the Governor General as follows—

13 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(Norway) Order.

2. DECLARATION

It is hereby declared—

(a) That the arrangements specified in Schedule 1 to this

Order, as modified by the provisions of Schedule 2 to this

Order, have been made with the Government of Norway.

(b) That it is expedient that those arrangements should have

effect.

SCHEDULE 1

(Section 2)

AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED

KINGDOM AND THE NORWEGIAN GOVERNMENT FOR THE

AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of Norway,

Desiring to conclude a Convention for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income.

Have agreed as follows—

ARTICLE I

(1) The taxes which are the subject of the present Convention are—

(a) In Norway:

The national income tax, including the national defence

tax on income, the communal income tax, the old age

pension tax, the war pension tax, and the seamen‘s tax,

and, for the purposes of Article XIX, the national property

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tax, including the national defence tax on property

(hereinafter referred to as ―Norwegian tax‖);

(b) In the United Kingdom of Great Britain and Northern

Ireland:

The income tax (including surtax) and the profits tax

(hereinafter referred to as ―United Kingdom tax‖).

(2) The present Convention shall also apply to any other taxes of a

substantially similar character imposed in Norway or the United

Kingdom subsequently to the date of signature of the present

Convention.

ARTICLE II

(1) In the present Convention, unless the context otherwise

requires—

(a) The term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man;

(b) The term ―Norway‖ means the Kingdom of Norway,

excluding Spitsbergen and Bear Island and Jan Mayen

and the Norwegian dependencies outside Europe;

mean the United Kingdom or Norway, as the context

requires;

(d) The term ―tax‖ means United Kingdom tax or Norwegian

tax, as the context requires;

(e) The term ―person‖ includes any body of persons,

corporate or not corporate;

(f) The term ―company‖ means any body corporate;

(g) The terms ―resident of the United Kingdom‖ and

―resident of Norway‖ mean respectively any person who

is resident in the United Kingdom for the purposes of

United Kingdom tax and not resident in Norway for the

purposes of Norwegian tax, and any person who is

resident in Norway for the purposes of Norwegian tax and

not resident in the United Kingdom for the purposes of

United Kingdom tax; a company shall be regarded as

resident in the United Kingdom if its business is managed

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and controlled in the United Kingdom and as resident in

Norway, if its business is managed and controlled in

Norway;

(h) The terms ―resident of one of the territories‖ and ―resident

of the other territory‖ mean a person who is a resident of

the United Kingdom or a person who is a resident of

Norway, as the context requires;

(i) The terms ―United Kingdom enterprise‖ and ―Norwegian

enterprise‖ mean respectively an industrial or commercial

enterprise or undertaking carried on by a resident of the

United Kingdom and an industrial or commercial

enterprise or undertaking carried on by a resident of

Norway, and the terms ―enterprise of one of the

territories‖ and ―enterprise of the other territory‖ mean a

United Kingdom enterprise or a Norwegian enterprise, as

the context requires;

(j) The term ―industrial or commercial profits‖ includes rents

or royalties in respect of cinematograph films;

(k) The term ―permanent establishment,‖ when used with

respect to an enterprise of one of the territories, means a

branch, management, factory, or other fixed place of

business, but does not include an agency unless the agent

has, and habitually exercises, a general authority to

negotiate and conclude contracts on behalf of such

enterprise or has a stock of merchandise from which he

regularly fills orders on its behalf. In this connection—

(i) An enterprise of one of the territories shall not be

deemed to have a permanent establishment in the

other territory merely because it carries on business

dealings in that other territory through a bona fide

broker or general commission agent acting in the

ordinary course of his business as such.

(ii) The fact that an enterprise of one of the territories

maintains in the other territory a fixed place of

business exclusively for the purchase of goods or

merchandise shall not of itself constitute that fixed

place of business a permanent establishment of the

enterprise.

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(iii) The fact that a company which is a resident of one

of the territories has a subsidiary company which is

a resident of the other territory or which carries on a

trade or business in that other territory (whether

through a permanent establishment or otherwise)

shall not of itself constitute that subsidiary company

a permanent establishment of its parent company.

(2) Where under the present Convention any income is exempt

from tax in one of the territories if (with or without other

conditions) it is subject to tax in the other territory, and that

income is subject to tax in that other territory, by reference to

the amount thereof which is remitted to or received in that other

territory, the exemption to be allowed under this Convention in

the first-mentioned territory shall apply only to the amount so

remitted or received.

(3) In the application of the provisions of the present Convention

by one of the Contracting Parties any term not otherwise

defined shall, unless the context otherwise requires, have the

meaning which it has under the laws in force in the territory of

that Party relating to the taxes which are the subject of the

present Convention.

ARTICLE III

(1) The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to Norwegian tax unless the

enterprise carries on a trade or business in Norway through a

permanent establishment situated therein. If it carries on a trade

or business as aforesaid, tax may be imposed on those profits by

Norway, but only on so much of them as is attributable to that

permanent establishment.

(2) The industrial or commercial profits of a Norwegian enterprise

shall not be subject to United Kingdom tax unless the enterprise

carries on a trade or business in the United Kingdom through a

permanent establishment situated therein. If it carries on a trade

or business as aforesaid, tax may be imposed on those profits by

the United Kingdom, but only on so much of them as is

attributable to that permanent establishment.

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(3) Where an enterprise of one of the territories carries on a trade or

business in the other territory through a permanent

establishment situated therein, there shall be attributed to that

permanent establishment the industrial or commercial profits

which it might be expected to derive in that other territory if it

were an independent enterprise engaged in the same or similar

activities under the same or similar conditions and dealing at

arm‘s length with the enterprise of which it is a permanent

establishment.

(4) Where an enterprise of one of the territories derives profits,

under contracts concluded in that territory, from sales of goods

or merchandise stocked in a warehouse in the other territory for

convenience of delivery and not for purposes of display, those

profits shall not be attributed to a permanent establishment of

the enterprise in that other territory, notwithstanding that the

offers of purchase have been obtained by an agent in that other

territory and transmitted by him to the enterprise for

acceptance.

(5) No portion of any profits arising to an enterprise of one of the

territories shall be attributed to a permanent establishment

situated in the other territory by reason of the mere purchase of

goods or merchandise within that other territory by the

enterprise.

ARTICLE IV

Where—

(a) an enterprise of one of the territories participates directly

or indirectly in the management, control or capital of an

enterprise of the other territory, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory,

and, in either case, conditions are made or imposed between the

2 enterprises, in their commercial or financial relations, which

differ from those which would be made between independent

enterprises, then any profits which would but for those

conditions have accrued to one of the enterprises but by reason

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of those conditions have not so accrued may be included in the

profits of that enterprise and taxed accordingly.

ARTICLE V

Notwithstanding the provisions of Articles III and IV, profits

which a resident of one of the territories derives from operating

ships or aircraft shall be exempt from tax in the other territory.

ARTICLE VI

(1)

(a) Dividends paid by a company which is a resident of the

United Kingdom to a resident of Norway, who is subject

to tax in Norway in respect thereof and does not carry on

a trade or business in the United Kingdom through a

permanent establishment situated therein, shall be exempt

from United Kingdom surtax.

(b) Norwegian tax on dividends paid by a company which is

a resident of Norway to a resident of the United Kingdom,

who is subject to tax in the United Kingdom in respect

thereof and does not carry on trade or business in Norway

through a permanent establishment situated therein, shall

not exceed 5%.

Provided that, where the resident of the United Kingdom

is a company which controls, directly or indirectly, not

less than 50% of the entire voting power of the company

paying the dividends, the dividends shall be exempt from

Norwegian tax.

(2) Where a company which is a resident of one of the territories

derives profits or income from sources within the other

territory, there shall not be imposed in that other territory any

form of taxation on dividends paid by the company to persons

not resident in that other territory, or any tax in the nature of an

undistributed profits tax on undistributed profits of the

company, whether or not those dividends or undistributed

profits represent, in whole or in part, profits or income so

derived.

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ARTICLE VII

(1) Any interest or royalty derived from sources within one of the

territories by a resident of the other territory, who is subject to

tax in that other territory in respect thereof and does not carry

on a trade or business in the first-mentioned territory through a

permanent establishment situated therein, shall be exempt from

tax in that first-mentioned territory.

(2) In this Article—

(a) The term ―interest‖ includes interest on bonds, securities,

notes, debentures or on any other form of indebtedness;

(b) The term ―royalty‖ means any royalty or other amount

paid as consideration for the use of, or for the privilege of

using, any copyright, patent, design, secret process or

formula, trade mark or other like property, but does not

include any royalty or other amount paid in respect of the

operation of a mine or quarry or of any other extraction of

natural resources.

(3) Where any interest or royalty exceeds a fair and reasonable

consideration in respect of the indebtedness or rights for which

it is paid, the exemption provided by the present Article shall

apply only to so much of the interest or royalty as represents

such fair and reasonable consideration.

(4) Any capital sum derived from sources within one of the

territories from the sale of patent rights by a resident of the

other territory, who does not carry on a trade or business in the

first-mentioned territory through a permanent establishment

situated therein, shall be exempt from tax in that first-

mentioned territory.

ARTICLE VIII

(1) Where under the provisions of the present Convention a

resident of the United Kingdom is exempt or entitled to relief

from Norwegian tax, similar exemption or relief shall be

applied to the undivided estates of deceased persons in so far as

one or more of the beneficiaries is a resident of the United

Kingdom.

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(2) Norwegian tax on the undivided estate of a deceased person

shall, in so far as the income accrues to a beneficiary who is

resident in the United Kingdom, be allowed as a credit under

Article XVI.

ARTICLE IX

(1) Remuneration, including pensions, paid by, or out of funds

created by, one of the Contracting Parties to any individual in

respect of services rendered to that Party in the discharge of

governmental functions shall be exempt from tax in the territory

of the other Contracting Party, unless the individual is a

national of that other Party without being also a national of the

first-mentioned Party.

(2) The provisions of this Article shall not apply to payments in

respect of services rendered in connection with any trade or

business carried on by either of the Contracting Parties for

purposes of profit.

ARTICLE X

(1) An individual who is a resident of the United Kingdom shall be

exempt from Norwegian tax on profits or remuneration in

respect of personal (including professional) services performed

within Norway in any year of assessment if—

(a) he is present within Norway for a period or periods not

exceeding in the aggregate 183 days during that year, and

(b) the services are performed for or on behalf of a resident of

the United Kingdom, and

tax.

(2) An individual who is a resident of Norway shall be exempt

from United Kingdom tax on profits or remuneration in respect

of personal (including professional) services performed within

the United Kingdom in any year of assessment, if—

(a) he is present within the United Kingdom for a period or

periods not exceeding in the aggregate 183 days during

that year, and

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(b) the services are performed for or on behalf of a resident of

Norway, and

(3) The provisions of this Article shall not apply to the profits or

remuneration of public entertainers such, as theatre, motion

picture or radio artistes, musicians and athletes.

ARTICLE XI

A resident of one of the territories shall be exempt from tax in

the other territory in respect of remuneration for services

performed on ships or aircraft operating outside the other

territory.

ARTICLE XII

(1) Any pension (other than a pension of the kind referred to in

paragraph (1) of Article IX) and any annuity, derived from

sources within Norway by an individual who is a resident of the

United Kingdom and subject to United Kingdom tax in respect

thereof, shall be exempt from Norwegian tax.

(2) Any pension (other than a pension of the kind referred to in

paragraph (1) of Article IX) and any annuity, derived from

sources within the United Kingdom by an individual who is a

resident of Norway and subject to Norwegian tax in respect

thereof, shall be exempt from United Kingdom tax.

(3) The term ―annuity‖ means a stated sum payable periodically at

stated times, during life or during a specified or ascertainable

period of time, under an obligation to make the payments in

return for adequate and full consideration in money or money‘s

worth.

ARTICLE XIII

A professor or teacher from one of the territories, who receives

remuneration for teaching, during a period of temporary

residence not exceeding 2 years, at a university, college, school,

or other educational institution in the other territory, shall be

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exempt from tax in that other territory in respect of that

remuneration.

ARTICLE XIV

A student or apprentice from one of the territories, who is

receiving full-time education or training in the other territory,

shall be exempt from tax in that other territory on payments

made to him from abroad for the purposes of his maintenance,

education or training.

ARTICLE XV

(1) Individuals who are residents of Norway shall be entitled to the

same personal allowances, reliefs and reductions for the

purposes of United Kingdom tax as British subjects not resident

in the United Kingdom.

(2) Individuals who are residents of the United Kingdom shall be

entitled to the same personal allowances, reliefs and reductions

for the purposes of Norwegian tax as Norwegian nationals not

resident in Norway.

ARTICLE XVI

(1) Subject to the provisions of the laws of the United Kingdom

regarding the allowance as a credit against United Kingdom tax

of tax payable in a territory outside the United Kingdom,

Norwegian tax payable, whether directly or by deduction, in

respect of income from sources within Norway shall be allowed

as a credit against any United Kingdom tax payable in respect

of that income.

Where such income is an ordinary dividend paid by a company

resident in Norway the credit shall take into account (in

addition to any Norwegian tax appropriate to the dividend) the

Norwegian tax payable by the company in respect of its profits;

and, where it is a dividend paid on participating preference

shares and representing both a dividend at the fixed rate to

which the shares are entitled and an additional participation in

profits, the Norwegian tax so payable by the company shall

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likewise be taken into account in so far as the dividend exceeds

that fixed rate.

Provided that for the purposes of this paragraph of this Article,

the credit to be allowed for Norwegian communal income tax

shall not exceed one-half of the said communal income tax.

(2) Where United Kingdom tax is payable, whether directly or by

deduction, in respect of income from sources within the United

Kingdom, and that income is chargeable also to Norwegian tax,

the Norwegian tax payable by the person entitled to such

income on his total income chargeable to Norwegian tax shall

be reduced by an amount which bears the same proportion to

that Norwegian tax as the income from sources within the

United Kingdom bears to the said total income. Provided that

the Norwegian Ministry of Finance and Customs may decide

that the deduction shall not exceed the amount of the United

Kingdom tax.

Where such income is an ordinary dividend paid by a company

resident in the United Kingdom, the deduction, in the event that

it is restricted to the amount of the United Kingdom tax, shall

take into account (in addition to the United Kingdom tax

appropriate to the dividend) the United Kingdom profits tax

payable by the company in respect of its profits; and, where it is

a dividend paid on participating preference shares and

representing both a dividend at a fixed rate to which the shares

are entitled and an additional participation in profits, the profits

tax so payable by the company shall likewise be taken into

account in so far as the dividend exceeds that fixed rate.

(3) Where income is derived from sources outside both the United

Kingdom and Norway by a person who is resident in the United

Kingdom for the purposes of United Kingdom tax and also

resident in Norway for the purposes of Norwegian tax the

income may be taxed in both countries (subject to any

Convention which may exist between either of the Contracting

Parties and the territory or territories from which the income is

derived). A credit shall be allowed in accordance with

paragraph (1) of this Article against any United Kingdom tax

payable in respect of that income, equal to that proportion of the

United Kingdom tax or the Norwegian tax, which ever is the

less, which such person‘s income from sources within the

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United Kingdom bears to the sum of his income from sources

within the United Kingdom and his income from sources within

Norway; and a deduction shall be allowed in accordance with

paragraph (2) of this Article against any Norwegian tax payable

in respect of that income equal to that proportion of the United

Kingdom tax or the Norwegian tax, whichever is the less, which

such person‘s income from sources within Norway bears to the

sum of his income from sources within the United Kingdom

and his income from sources within Norway.

(4) For the purposes of this Article, profits or remuneration for

personal (including professional) services performed in one of

the territories shall be deemed to be income from sources within

that territory, except that the remuneration of a director of a

company shall be deemed to be income from sources within the

territory in which the company is resident, and the services of

an individual whose services are wholly or mainly performed in

ships or aircraft operated by a resident of one of the territories

shall be deemed to be performed in that territory.

ARTICLE XVII

(1) The taxation authorities of the Contracting Parties shall

exchange such information (being information which is at their

disposal under their respective taxation laws in the normal

course of administration) as is necessary for carrying out the

provisions of the present Convention or for the prevention of

fraud or for the administration of statutory provisions against

legal avoidance in relation to the taxes which are the subject of

the present Convention. Any information so exchanged shall be

treated as secret and shall not be disclosed to any persons other

than persons (including a Court) concerned with the assessment,

determination and collection of the taxes which are the subject

of the present Convention. No information as aforesaid shall be

exchanged which would disclose any trade, business, industrial

or professional secret or trade process.

As used in this Article, the term ―taxation authorities‖ means, in

the case of the United Kingdom, the Commissioners of Inland

Revenue or their authorised representative; in the case of

Norway, the Ministry of Finance and Customs: and, in the case

of any territory to which the present Convention is extended

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under Article XX, the competent authority for the

administration in such territory of the taxes to which the present

Convention applies.

ARTICLE XVIII

The Agreement of 18th December, 1924, between Great Britain

and Norway for the reciprocal exemption from income tax in

certain cases of profits accruing from the business of shipping,

and the Agreement of 21st December, 1938 between the United

Kingdom and Norway for the reciprocal exemption from taxes

in certain cases of profits arising through agencies, shall not

have effect—

(a) in Norway, for any period for which

Convention has effect in that country;

the present

(b) in the United Kingdom, in relation to any tax for any

period for which the present Convention has effect as

respects that tax.

ARTICLE XIX

(1) The nationals of one of the Contracting Parties shall not be

subjected in the territory of the other Contracting Party to any

taxation or any requirement connected therewith which is other,

higher or more burdensome than the taxation and connected

requirements to which the nationals of the latter Party are or

may be subjected.

(2) The enterprises of one of the territories shall not be subjected in

the other territory, in respect of profits or capital attributable to

their permanent establishments in that other territory, to any

taxation which is other, higher or more burdensome than the

taxation to which the enterprises of that other territory are or

may be subjected in respect of the like profits or capital.

(3) The income, profits and capital of an enterprise of one of the

territories, the capital of which is wholly or partly owned or

controlled, directly or indirectly by a resident or residents of the

other territory shall not be subjected in the first-mentioned

territory to any taxation which is other, higher or more

burdensome than the taxation to which other enterprises of that

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first-mentioned territory are or may be subjected in respect of

the like income, profits and capital.

(4) Nothing in paragraph (1) or paragraph (2) of this Article shall

be construed as obliging one of the Contracting Parties to grant

to nationals of the other Contracting Party who are not resident

in the territory of the former Party the same personal

allowances, reliefs and reductions for tax purposes as are

granted to its own nationals.

(5) In this Article the term ―nationals‖ means—

(a) in relation to Norway, all Norwegian citizens and all

juridical persons domiciled in Norway;

(b) in relation to the United Kingdom all British subjects and

British protected persons residing in the United Kingdom

or any British territory to which the present Convention

applies by reason of extension made under Article XX,

and all legal persons, partnerships and associations

deriving their status as such from the law in force in any

British territory to which the present Convention applies.

(6) In this Article the term ―taxation‖ means taxes of every kind

and description levied on behalf of any authority whatsoever.

ARTICLE XX

(1) The present Convention may be extended, either in its entirety

or with modifications, to any territory for whose international

relations the United Kingdom is responsible and which imposes

taxes substantially similar in character to those which are the

subject of the present Convention, and any such extension shall

take effect from such date and subject to such modifications and

conditions (including conditions as to termination) as may be

specified and agreed between the Contracting Parties in notes to

be exchanged for this purpose.

(2) The termination in respect of Norway or the United Kingdom of

the present Convention under Article XXII shall, unless

otherwise expressly agreed by both Contracting Parties,

terminate the application of the present Convention to any

territory to which the Convention has been extended under this

Article.

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(3) The territories to which this Article applies are:

(a) in relation to the United Kingdom: any territory other than

the United Kingdom for whose international relations the

United Kingdom is responsible;

(b) in relation to Denmark: any territory other than Denmark

for whose international relations Denmark is responsible.

ARTICLE XXI

(1) The present Convention shall be ratified and the instruments of

ratification shall be exchanged at Oslo as soon as possible.

(2) The present Convention shall enter into force upon the

exchange of ratifications and the foregoing provisions thereof

shall have effect—

(a) In the United Kingdom:

as respects income tax for any year of assessment

beginning on or after 6th April, 1950;

as respects surtax for any year of assessment beginning on

or after 6th April, 1949; and

as respects profits tax in respect of the following

profits:—

(i) profits arising in any chargeable accounting period

beginning on or after 1st April, 1950;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date;

(iii) profits not so arising or attributable by reference to

which income tax is, or but for the present

convention would be, chargeable for any year of

assessment beginning on or after 6th April, 1950;

(b) In Norway:

for the taxable years beginning on or after 1st January,

1950.

ARTICLE XXII

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The present Convention shall continue in force indefinitely but

either of the Contracting Parties may, on or before 30th June in

any calendar year not earlier than the year 1954, give to the

other Contracting Party, through diplomatic channels, written

notice of termination, provided that such notice of termination

may be given in any year before 1954 if there should be any

important change in the laws of the other Contracting Party

affecting the application of Article XVI. In such event, the

present Convention shall cease to be effective—

(a) In the United Kingdom:

as respects income tax, for any year of assessment

beginning on or after 6th April in the calendar year next

following that in which the notice is given:

as respects surtax, for any year of assessment beginning

on or after 6th April in the calendar year in which the

notice is given; and as respects profits tax, in respect of

the following profits—

(i) profits arising in any chargeable accounting period

beginning on or after 1st April in the calendar year

next following that in which the notice is given;

(ii) profits attributable to so much of any chargeable

accounting period falling partly before and partly

after that date as falls after that date:

(iii) profits not so arising or attributable by reference to

which income tax is chargeable for any year of

assessment beginning on or after 6th April in the

next following calendar year;

(b) In Norway:

for the taxable years beginning on or after 1st January in

the calendar year next following that in which the notice

is given.

IN WITNESS WHEREOF the undersigned, being duly authorised

by their respective Governments, have signed the present

Convention and have affixed thereto their seals.

Done at London, in duplicate, in the English and Norwegian

languages, both texts being equally authoritative, on the 2nd

day of May, 1951.

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(L.S.) HERBERT MORRISON,

(L.S.) P. PREBENSEN.

SCHEDULE 2

(Section 2)

1. APPLICATION

(a) The provisions of the Convention incorporated in Schedule 1 to

this Order shall apply as modified below—

(i) as if the Contracting Parties were Saint Lucia and the

Government of Norway; and as if the tax concerned in the

case of Saint Lucia were Income Tax;

(ii) as if references to the date of signature were references to

the 18th day of May, 1955.

(b) The extension shall have effect in Saint Lucia as respects tax for

the year of assessment 1955 and for subsequent years of

assessment, and will have effect in Norway – as respects

Norwegian tax for taxable years beginning on or after 1st

January, 1954.

terminated as respects Saint Lucia by written notice of

termination given on or before the 30th June in any calendar

year not earlier than the year 1957 by either of the Contracting

Parties to the Convention to the other Contracting Party through

the diplomatic channel and in such event the extension shall

cease to have effect in Saint Lucia as respects tax for the year of

assessment beginning in the calendar year next following the

date of such notice and for subsequent years of assessment, and

will cease to have effect in Norway as respects Norwegian tax

for the taxable years beginning on or after 1st January in the

calendar year in which the notice is given.

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2. MODIFICATIONS

(a) In article VI(1) of the Convention the words ―shall be exempt

from United Kingdom surtax‖ shall be understood for the

purposes of this extension as though they read ―is not liable to

tax in the territory at a rate in excess of the rate applicable to a

company‖.

(b)

(i) In Article VII all references to interest is considered to be

deleted; and

(i) in paragraph 2 of Article XVI references to income

(except in the phrase ―total income‖) is considered not to

include interest.

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INCOME TAX (DOUBLE TAXATION RELIEF) (U.S.A.)

ORDER – SECTION 60

(Statutory Instrument 42/1958)

Commencement [27 December 1958]

WHEREAS it is provided by section 52(1) of the Income Tax

Act, 194714 that if the Governor General by Order declares that

arrangements specified in the Order were made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the Laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to income tax

despite anything in any enactment;

AND WHEREAS by a Convention dated 16 April 1945 and a

protocol thereto dated 6 June 1946 and a further protocol

thereto dated 25 May 1954 and a further protocol thereto dated

19 August 1957 between the Government of the United

Kingdom and the Government of the United States,

arrangements were made among other things for the avoidance

of double taxation;

AND WHEREAS provision is made in the said Convention as

amended by the said protocols for the application by means of a

notification of extension given by either of the said

Governments to the other Government and acceptance thereof

by the other Government of the said Convention as amended,

subject to such modifications, if any, as may be specified in the

notification, to all or any of its Colonies, overseas territories,

protectorates or territories in respect of which it exercise a

mandate or trusteeship, which impose taxes substantially

similar in character to those which are the subject of the said

Convention.

14 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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AND WHEREAS by acceptance of a notification dated 3

December 1958 the said Convention as amended, with certain

modifications, was applied to Saint Lucia;

1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(U.S.A.) Order.

2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in Schedule 1 to this

Order, as modified by the provisions of Schedule 2 to this

Order, have been made with the Government of the

United States of America;

(b) that it is expedient that those arrangements should have

effect.

SCHEDULE 1

(Section 2)

PART 1 CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND

THE GOVERNMENT OF THE UNITED STATES OF AMERICA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of the United States of

America,

Desiring to conclude a Convention for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income,

Have appointed for that purpose as their Plenipotentiaries:

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The Government of the United Kingdom of Great Britain and

Northern Ireland:

The Right Honourable the Earl of Halifax, K.G., Ambassador

Extraordinary in Washington; and

The Government of the United States of America:

Mr. Edward R. Stettinius, Jr., Secretary of State;

Who, having exhibited their respective full powers, found in

good and due form, have agreed as follows—

ARTICLE 1

(1) The taxes which are the subject of the present Convention are—

(a) In the United States of America:

The Federal income taxes, including surtaxes and excess

profits taxes (hereinafter referred to as United States tax).

(b) In the United Kingdom of Great Britain and Northern

Ireland;

The income tax (including surtax), the excess profits tax

and the national defence contribution (hereinafter referred

to as United Kingdom tax).

(2) The present Convention shall also apply to any other taxes of a

substantially similar character imposed by either Contracting

Party subsequently to the date of signature of the present

Convention or by the Government of any territory to which the

present Convention is extended under Article XXII.

ARTICLE II

(1) In the present Convention, unless the context otherwise

requires—

(a) The term ―United States‖ means the United States of

America, and when used in a geographical sense means

the States, the Territories of Alaska and of Hawaii, and

the District of Columbia.

(b) The term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man.

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and ―territory of the other Contracting Party‖ mean the

United States or the United Kingdom as the context

requires.

(d) The term ―United States corporation‖ means a

corporation, association or other like entity created or

organised in or under the laws of the United States.

(e) The term ―United Kingdom corporation‖ means any kind

of juridical person created under the laws of the United

Kingdom.

(f) The terms ―corporation of one Contracting Party‖ and

―corporation of the other Contracting Party‖ mean a

United States corporation, or a United Kingdom

corporation as the context requires.

(g) The term ―resident of the United Kingdom‖ means any

person (other than a citizen of the United States or a

United States corporation) who is resident in the United

Kingdom for the purposes of United Kingdom tax and not

resident in the United States for the purposes of United

States tax. A corporation is to be regarded as resident in

the United Kingdom if its business is managed and

controlled in the United Kingdom.

(h) The term ―resident of the United States‖ means any

individual who is resident in the United States for the

purposes of United States tax and not resident in the

United Kingdom for the purposes of United Kingdom tax,

and any United States corporation and any partnership

created or organised in or under the laws of the United

States, being a corporation or partnership which is not

resident in the United Kingdom for the purposes of

United Kingdom tax.

(1) The term ―United Kingdom enterprise‖ means an

industrial or commercial enterprise or undertaking carried

on by a resident of the United Kingdom.

(j) The term ―United States enterprise‖ means an industrial

or commercial enterprise or undertaking carried on by a

resident of the United States.

(k) The terms ―enterprise of one of the Contracting Parties‖

and ―enterprise of the other Contracting Party‖ mean a

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United States enterprise or a United Kingdom enterprise,

as the context requires.

(l) The term ―permanent establishment‖ when used with

respect to an enterprise of one of the Contracting Parties

means a branch, management, factory or other fixed place

of business, but does not include an agency unless the

agent has, and habitually exercises, a general authority to

negotiate and conclude contracts on behalf of such

enterprise or has a stock of merchandise from which he

regularly fills orders on its behalf. An enterprise of one of

the Contracting Parties shall not be deemed to have a

permanent establishment in the territory of the other

Contracting Party merely because it carries on business

dealings in the territory of such other Contracting Party

through a bona fide commission agent, broker or

custodian acting in the ordinary course of his business as

such. The fact that an enterprise of one of the Contracting

Parties maintains in the territory of the other Contracting

Party a fixed place of business exclusively for the

purchase of goods or merchandise shall not of itself

constitute such fixed place of business a permanent

establishment of such enterprise. The fact that a

corporation of one Contracting Party has a subsidiary

corporation which is a corporation of the other

Contracting Party or which is engaged in trade or business

in the territory of such other Contracting Party (whether

through a permanent establishment or otherwise) shall not

of itself constitute that subsidiary corporation a permanent

establishment of its parent corporation.

(2) For the purposes of Articles VI, VII, VIII, IX and XIV a

resident of the United Kingdom shall not be deemed to be

engaged in trade or business in the United States in any taxable

year unless such resident has a permanent establishment

situated therein in such taxable year. The same principle shall

be applied, mutatis mutandis, by the United Kingdom in the

case of a resident of the United States.

(3) In the application of the provisions of the present Convention

by one of the Contracting Parties any term not otherwise

defined shall, unless the context otherwise requires, have the

meaning which it has under the laws of that Contracting Party

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relating to the

Convention.

taxes which are the subject of the present

ARTICLE III

(1) A United Kingdom enterprise shall not be subject to United

States tax in respect of its industrial or commercial profits

unless it is engaged in trade or business in the United States

through a permanent establishment situated therein. If it is so

engaged, United States tax may be imposed upon the entire

income of such enterprise from sources within the United

States.

(2) A United States enterprise shall not be subject to United

Kingdom tax in respect of its industrial or commercial profits

unless it is engaged in trade or business in the United Kingdom

through a permanent establishment situated therein. If it is so

engaged, United Kingdom tax may be imposed upon the entire

income of such enterprise from sources within the United

Kingdom : Provided that nothing in this paragraph shall affect

any provisions of the law of the United Kingdom regarding the

imposition of United Kingdom excess profits tax and national

defence contribution in the case of inter-connected companies.

(3) Where an enterprise of one of the Contracting Parties is

engaged in trade or business in the territory of the other

Contracting Party through a permanent establishment situated

therein, there shall be attributed to such permanent

establishment the industrial or commercial profits which it

might be expected to derive if it were an independent enterprise

engaged in the same or similar activities under the same or

similar conditions and dealing at arm‘s length with the

enterprise of which it is a permanent establishment, and the

profits so attributed shall, subject to the law of such other

Contracting Party, be deemed to be income from sources within

the territory of such other Contracting Party.

(4) In determining the industrial or commercial profits from

sources within the territory of one of the Contracting Parties of

an enterprise of the other Contracting Party, no profits shall be

deemed to arise from the mere purchase of goods or

merchandise within the territory of the former Contracting Party

by such enterprise.

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ARTICLE IV

Where an enterprise of one of the Contracting Parties, by reason

of its participation in the management, control or capital of an

enterprise of the other Contracting Party, makes with or

imposes on the latter, in their commercial or financial relations,

conditions different from those which would be made with an

independent enterprise, any profits which would but for those

conditions have accrued to one of the enterprises but by reason

of those conditions have not so accrued, may be included in the

profits of that enterprise and taxed accordingly.

ARTICLE V

(1) Notwithstanding the provisions of Articles III and IV of the

present Convention, profits which an individual (other than a

citizen of the United States) resident in the United Kingdom or

a United Kingdom corporation derives from operating ships

documented or aircraft registered under the laws of the United

Kingdom, shall be exempt from United States tax.

(2) Notwithstanding the provisions of Articles III and IV of the

present Convention, profits which a citizen of the United States

not resident in the United Kingdom or a United States

corporation derives from operating ships documented or aircraft

registered under the laws of the United States, shall be exempt

from United Kingdom tax.

(3) This Article shall be deemed to have superseded, on and after

the first day of January, 1945, as to United States tax, and on

and after the 6th day of April, 1945, as to United Kingdom tax,

the arrangements relating to reciprocal exemption of shipping

profits from income tax effected between the Government of

the United States and the Government of the United Kingdom

by exchange of Notes dated August 11, 1924, November 18,

1924, November 26, 1924, January 15, 1925, February 13,

1925, and March 16, 1925, which shall accordingly cease to

have effect.

ARTICLE VI

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(1) The rate of United States tax on dividends derived from a

United States corporation by a resident of the United Kingdom

who is subject to United Kingdom tax on such dividends and

not engaged in trade or business in the United States shall not

exceed 15%.: Provided that such rate of tax shall not exceed

5%, if such resident is a corporation controlling, directly or

indirectly, at least 95%, of the entire voting power in the

corporation paying the dividend, and not more than 25%, of the

gross income of such paying corporation is derived from

interest and dividends, other than interest and dividends

received from its own subsidiary corporations. Such reduction

of the rate to 5%, shall not apply if the relationship of the 2

corporations has been arranged or is maintained primarily with

the intention of securing such reduced rate.

(2) Dividends derived from sources within the United Kingdom by

an individual who is (a) a resident of the United States, (b)

subject to United States tax with respect to such dividends and

shall be exempt from United Kingdom surtax.

(3) Either of the contracting Parties may terminate this Article by

giving written notice of termination to the other Contracting

Party, through diplomatic channels, on or before the thirtieth

day of June in any year after the year 1945, and in such event

paragraph (1) hereof shall cease to be effective as to United

States tax on and after the first day of January, and paragraph

(2) hereof shall cease to be effective as to United Kingdom tax

on and after the 6th day of April, in the year next following that

in which such notice was given.

ARTICLE VII

(1) Interest (on bonds, securities, notes, debentures, or on any other

form of indebtedness) derived from sources within the United

States by a resident of the United Kingdom who is subject to

United Kingdom tax on such interest and not engaged in trade

or business in the United States, shall be exempt from United

States tax ; but such exemption shall not apply to such interest

paid by a United States corporation to a corporation resident in

the United Kingdom controlling, directly or indirectly, more

than 50%, of the entire voting power in the paying corporation.

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(2) Interest (on bonds, securities, notes, debentures, or on any other

form of indebtedness) derived from sources within the United

Kingdom by a resident of the United States who is subject to

United States tax on such interest and not engaged in trade or

business in the United Kingdom, shall be exempt from United

Kingdom tax ; but such exemption shall not apply to such

interest paid by a corporation resident in the United Kingdom to

a United States corporation controlling, directly or indirectly,

more than 50%, of the entire voting power in the paying

corporation.

ARTICLE VIII

(1) Royalties and other amounts paid as consideration for the use

of, or for the privilege of using, copyrights, patents, designs,

secret processes and formulae, trade marks, and other like

property, and derived from sources within the United States by

a resident of the United Kingdom who is subject to United

Kingdom tax on such royalties or other amounts and not

engaged in trade or business in the United States, shall be

exempt from United States tax.

(2) Royalties and other amounts paid as consideration for the use

of, or for the privilege of using, copyrights, patents, designs,

secret processes and formulae, trade-marks and other like

property, and derived from sources within the United Kingdom

by a resident of the United States who is subject to United

States tax on such royalties or other amounts and not engaged in

trade or business in the United Kingdom, shall be exempted

from United Kingdom tax.

(3) For the purposes of this Article the term ―royalties‖ shall be

deemed to include rentals in respect of motion picture films.

ARTICLE IX

(1) The rate of United States tax on royalties in respect of the

operation of mines or quarries or of other extraction of natural

resources, and on rentals from real property or from an interest

in such property, derived from sources within the United States

by a resident of the United Kingdom who is subject to United

Kingdom tax with respect to such royalties or rentals and not

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engaged in trade or business in the United States, shall not

exceed 15%. : Provided that any such resident may elect for any

taxable year to be subject to United States tax as if such resident

were engaged in trade or business in the United States.

(2) Royalties in respect of the operation of mines or quarries of

other extraction of natural resources, and rentals from real

property or from an interest in such property, derived from

sources within the United Kingdom by an individual who is (a)

a resident of the United States, (b) subject to United States tax

with respect to such royalties and rentals, and (c) not engaged in

trade or business in the United Kingdom, shall be exempt from

United Kingdom surtax.

ARTICLE X

(1) Any salary, wage, similar remuneration, or pension, paid by the

Government of the United States to an individual (other than a

British subject who is not also a citizen of the United States) in

respect of services rendered to the United States in the

discharge of governmental functions, shall be exempt from

United Kingdom tax.

(2) Any salary, wage, similar remuneration, or pension, paid by the

Government of the United Kingdom to an individual (other than

a citizen of the United States who is not also a British subject)

in respect of services rendered to the United Kingdom in the

discharge of governmental functions, shall be exempt from

United States tax.

(3) The provisions of this Article shall not apply to payments in

respect of services rendered in connection with any trade or

business carried on by either of the Contracting Parties for

purposes of profit.

ARTICLE XI

(1) An individual who is a resident of the United Kingdom shall be

exempt from United States tax upon compensation for personal

(including professional) services performed during the taxable

year within the United States if (a) he is present within the

United States for a period or periods not exceeding in the

aggregate 183 days during such taxable year, and (b) such

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services are performed for or on behalf of a person resident in

the United Kingdom.

(2) An individual who is a resident of the United States shall be

exempt from United Kingdom tax upon profits, emoluments or

other remuneration in respect of personal (including

professional) services performed within the United Kingdom in

any year of assessment if (a) he is present within the United

Kingdom for a period or periods not, exceeding in the aggregate

183 days during that year, and (b) such services are performed

for or on behalf of a person resident in the United States.

(3) The provisions of this Article shall not apply to the

compensation, profits, emoluments or other remuneration of

public entertainers such as stage, motion picture or radio artists,

musicians and athletes.

ARTICLE XII

(1) Any pension (other than a pension to which Article X applies),

and any life annuity, derived from sources within the United

States by an individual who is a resident of the United Kingdom

shall be exempt from United States tax.

(2) Any pension (other than a pension to which Article X applies),

and any life annuity, derived from sources within the United

Kingdom by an individual who is a resident of the United States

shall be exempt from United Kingdom tax.

(3) The term ―life annuity‖ means a stated sum payable periodically

at stated times, during life or during a specified or ascertainable

period of time, under an obligation to make the payments in

consideration of money paid.

ARTICLE XIII

(1) Subject to section 131 of the United States Internal Revenue

Code as in effect on the first day of January, 1945, United

Kingdom tax shall be allowed as a credit against United States

tax. For this purpose, the recipient of a dividend paid by a

corporation which is a resident of the United Kingdom shall be

deemed to have paid the United Kingdom income tax

appropriate to such dividend if such recipient elects to include

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in his gross income for the purposes of United States tax the

amount of such United Kingdom income tax.

(2) Subject to such provisions (which shall not affect the general

principle hereof) as may be enacted in the United Kingdom,

United States tax payable in respect of income from sources

within the United States shall be allowed as a credit against any

United Kingdom tax payable in respect of that income. Where

such income is an ordinary dividend paid by a United States

corporation, such credit shall take into account (in addition to

any United States income tax deducted from or imposed on

such dividend) the United States income tax imposed on such

corporation in respect of its profits, and where it is a dividend

paid on participating preference shares and representing both a

dividend at the fixed rate to which the shares are entitled and an

additional participation in profits, such tax on profits shall

likewise be taken into account in so far as the dividend exceeds

such fixed rate.

(3) For the purposes of this Article, compensation, profits,

emoluments and other remuneration for personal (including

professional) services shall be deemed to be income from

sources within the territory of the Contracting Party where such

services are performed.

ARTICLE XIV

A resident of the United Kingdom not engaged in trade or

business in the United States shall be exempt from United

States tax on gains from the sale or exchange of capital assets.

ARTICLE XV

Dividends and interest paid on or after the first day of January,

1945, by a United Kingdom corporation shall be exempt from

United States tax except where the recipient is a citizen of or a

resident of the United States or a United States corporation.

ARTICLE XVI

A United Kingdom corporation shall be exempt from United

States tax on its accumulated or undistributed earnings, profits,

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income or surplus, if individuals who are residents of the United

Kingdom control, directly or indirectly, throughout the last half

of the taxable year, more than 50%, of the entire voting power

in such corporation.

ARTICLE XVII

(1) The United States income tax liability for any taxable year

beginning prior to the 1st January, 1936, of any individual

(other than a citizen of the United States) resident in the United

Kingdom, or of any United Kingdom corporation, remaining

unpaid on the date of signature of the present Convention, may

be adjusted on a basis satisfactory to the United States

Commissioner of Internal Revenue: Provided that the amount to

be paid in settlement of such liability shall not exceed the

amount of the liability which would have been determined if—

(a) the United States Revenue Act of 1936 (except in the case

of a United Kingdom corporation in which more than

50%, of the entire voting power was controlled, directly

or indirectly, throughout the latter half of the taxable year,

by citizens or residents of the United States), and

(b) Articles XV and XVI of the present Convention,

had been in effect for such year. If the taxpayer was not, within

the meaning of such Revenue Act, engaged in trade or business

in the United States and had no office or place of business

therein during the taxable year, the amount of interest and

penalties shall not exceed 50%, of the amount of the tax with

respect to which such interest and penalties have been

computed.

(2) The United States income tax unpaid on the date of signature of

the present Convention for any taxable year beginning after the

31 December 1935, and prior to 1 January 1945, in the case of

an individual (other than a citizen of the United States) resident

of the United Kingdom, or in the case of any United Kingdom

corporation shall be determined as if the provisions of Articles

XV and XVI of the present Convention had been in effect for

such taxable year.

(3) The provisions of paragraph (1) of this Article shall not apply—

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(a) unless the taxpayer files with the Commissioner of

Internal Revenue on or before 31 December 1947, a

request that such tax liability be so adjusted and furnishes

such information as the Commissioner may require; or

(b) in any case in which the Commissioner is satisfied that

any deficiency in tax is due to fraud with intent to evade

the tax.

ARTICLE XVIII

A professor or teacher from the territory of one of the

Contracting Parties who visits the territory of the other

Contracting Party for the purpose of teaching, for a period not

exceeding 2 years, at a university, college, school or other

educational institution in the territory of such other Contracting

Party shall be exempted by such other Contracting Party from

tax on his remuneration for such teaching for such period.

ARTICLE XIX

A student or business apprentice from the territory of one of the

Contracting Parties who is receiving full-time education or

training in the territory of the other Contracting Party shall be

exempted by such other Contracting Party from tax on

payments made to him by persons within the territory of the

former Contracting Party for the purposes of his maintenance,

education or training.

ARTICLE XX

(1) The taxation authorities of the Contracting Parties shall

exchange such information (being information available under

the respective taxation laws of the Contracting Parties) as is

necessary for carrying out the provisions of the present

Convention or for the prevention of fraud or the administration

of statutory provisions against legal avoidance in relation to the

taxes which are the subject of the present Convention. Any

information so exchanged shall be treated as secret and shall not

be disclosed to any person other than those concerned with the

assessment and collection of the taxes which are the subject of

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the present Convention. No information shall be exchanged

which would disclose any trade secret or trade process.

(2) As used in this Article, the term ―taxation authorities‖ means, in

the case of the United States, the Commissioner of Internal

Revenue or his authorised representative; in the case of the

United Kingdom, the Commissioners of Inland Revenue or their

authorised representative ; and, in the case of any territory to

which the present Convention is extended under Article XXII,

the competent authority for the administration in such territory

of the taxes to which the present Convention applies.

ARTICLE XXI

(1) The nationals of one of the Contracting Parties shall not, while

resident in the territory of the other Contracting Party, be

subjected therein to other or more burdensome taxes than are

the nationals of such other Contracting Party, resident in its

territory.

(2) The term ―nationals‖ as used in this Article means—

(a) In relation to the United Kingdom, all British subjects and

British protected persons, from the United Kingdom or

any territory with respect to which the present Convention

is applicable by reason of extension made by the United

Kingdom under Article XXII; and

(b) In relation to the United States, United States citizens, and

all persons under the protection of the United States, from

the United States or any territory to which the present

Convention is applicable by reason of extension made by

the United States under Article XXII;

and includes all legal persons, partnerships and associations

deriving their status as such from, or created or organised

under, the laws in force in any territory of the Contracting

Parties to which the present Convention applies.

(3) In this Article the word ―taxes‖ means taxes of every kind or

description, whether national, federal, state, provincial or

municipal.

ARTICLE XXII

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(1) Either of the Contracting Parties may, at the time of exchange

of instruments of ratification or thereafter while the present

Convention continues in force, by a written notification of

extension given to the other Contracting Party through

diplomatic channels, declare its desire that the operation of the

present Convention shall extend to all or any of its Colonies,

overseas territories, protectorates, or territories in respect of

which it exercises a mandate, which impose taxes substantially

similar in character to those which are the subject of the present

Convention. The present Convention shall apply to the territory

or territories named in such notification on the date or dates

specified in the notification (not being less than 60 days from

the date of the notification) or, if no date is specified in respect

of any such territory, on the sixtieth day after the date of such

notification, unless, prior to the date on which the Convention

would otherwise become applicable to a particular territory, the

Contracting Party to whom notification is given shall have

informed the other Contracting Party in writing through

diplomatic channels that it does not accept such notification as

to that territory. In the absence of such extension, the present

Convention shall not apply to any such territory.

(2) At any time after the expiration of one year from the entry into

force of an extension under paragraph (1) of this Article, either

of the Contracting Parties may, by written notice of termination

given to the other Contracting Party through diplomatic

channels, terminate the application of the present Convention to

any territory to which it has been extended under paragraph (1),

and in such event the present Convention shall cease to apply, 6

months after the date of such notice, to the territory or

territories named therein, but without affecting its continued

application to the United States, the United Kingdom or to any

other territory to which it has been extended under paragraph

(1) hereof.

(3) In the application of the present Convention in relation to any

territory to which it is extended by notification by the United

Kingdom or the United States references to the ―United

Kingdom‖ or, as the case may be, the ―United States‖ shall be

construed as references to that territory.

(4) The termination in respect of the United States or the United

Kingdom of the present Convention under Article XXIV or of

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Article VI shall, unless otherwise expressly agreed by both

Contracting Parties, terminate the application of the present

Convention or, as the case may be, that Article to any territory

to which the Convention has been extended by the United

States or the United Kingdom.

(5) The provisions of the preceding paragraphs of this Article shall

apply to the channel Islands and the Isle of Man as if they were

colonies of the United Kingdom.

ARTICLE XXIII

(1) The present Convention shall be ratified and the instruments of

ratification shall be exchanged at Washington as soon as

possible.

(2) Upon exchange of ratifications, the present Convention shall

have effect—

(a) as respects United States tax, for the taxable years

beginning on or after the first day of January, 1945;

(b)

(i) as respects United Kingdom income tax, for the year

of assessment beginning on the 6th day of April,

1945, and subsequent years;

(ii) as respects United Kingdom surtax, for the year of

assessment beginning on the 6th day of April, 1944,

and subsequent years; and

(iii) as respects United Kingdom excess profits tax and

national defence contribution, for any chargeable

accounting period beginning on or after the first day

of April, 1945, and for the unexpired portion of any

chargeable accounting period current at that date.

ARTICLE XXIV

(1) The present Convention shall continue in effect indefinitely but

either of the Contracting Parties may, on or before the 30th day

of June in any year after the year 1946, give to the other

Contracting Party, through diplomatic channels, notice of

termination and, in such event, the present Convention shall

cease to be effective—

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(a) as respects United States tax for the taxable years

beginning on or after the first day of January in the year

next following that in which such notice is given;

(b)

(i) as respects United Kingdom income tax, for any

year of assessment beginning on or after the 6th day

of April in the year next following that in which

such notice is given;

(ii) as respects United Kingdom surtax, for any year of

assessment beginning on or after the 6th day of

April in the year in which such notice is given; and

(iii) as respects United Kingdom excess profits tax and

national defence contribution, for any chargeable

accounting period beginning on or after the first day

of April in the year next following that in which

such notice is given and for the unexpired portion of

any chargeable accounting period current at that

date.

(2) The termination of the present Convention or of any Article

thereof shall not have the effect of reviving any treaty or

arrangement abrogated by the present Convention or by treaties

previously concluded between the Contracting Parties.

In witness whereof the above-mentioned Plenipotentiaries have

signed the present Convention and have affixed thereto their

seals.

Done at Washington, in duplicate, on the sixteenth day of April,

one thousand nine hundred and forty-five.

For the Government of the United Kingdom of Great Britain

and Northern Ireland :

(L.S.) HALIFAX.

For the Government of the United States of America :

(L.S.) E. R. STETTINIUS, Jr.

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PART 2 PROTOCOL

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of the United States of

America,

Desiring to conclude a supplementary Protocol modifying in

certain respects the Convention for the avoidance of double

taxation and the prevention of fiscal evasion with respect to

taxes on income which was signed at Washington on April

16th, 1945,

Have agreed as follows :

ARTICLE 1

Paragraph (3) of Article XI of the Convention of April 16th,

1945, for the avoidance of double taxation and the prevention of

fiscal evasion with respect to taxes on income shall be deemed

to be deleted and of no effect.

ARTICLE II

This Protocol, which shall be regarded as an integral part of the

said Convention, shall be ratified and the instruments of

ratification thereof shall be exchanged at Washington.

IN WITNESS WHEREOF the undersigned Plenipotentiaries,

being authorized thereto by their respective Governments, have

signed this Protocol and have affixed thereto their seals.

DONE at Washington, in duplicate, this sixth day of June,

1946.

FOR THE GOVERNMENT OF THE UNITED KINGDOM OF

GREAT BRITAIN AND NORTHERN IRELAND:

JOHN BALFOUR,

His Majesty‘s

Envoy Extraordinary and Minister Plenipotentiary

in Washington.

FOR THE GOVERNMENT OF THE UNITED STATES OF

AMERICA:

JAMES F. BYRNES,

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Secretary of State of the United

States of America,

SUPPLEMENTARY PROTOCOL AMENDING THE

CONVENTION FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL

EVASION WITH RESPECT TO TAXES ON INCOME,

SIGNED AT WASHINGTON ON THE 16TH APRIL, 1945,

AS MODIFIED BY THE SUPPLEMENTARY PROTOCOL,

SIGNED AT WASHINGTON ON THE 6TH JUNE, 1946.

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of the United States of

America,

Desiring to conclude a further supplementary Protocol

amending the Convention for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to

Taxes on Income, signed at Washington on the 16th April,

1945, as modified by the Supplementary Protocol, signed at

Washington on the 6th June, 1946,

Have agreed as follows :

ARTICLE 1

Paragraph (1) of Article XXII of the Convention of the 16th

April, 1945, for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to Taxes on Income is

hereby amended to read as follows :

―(1) Either of the Contracting Parties may, at any time while the

present Convention continues in force, by a written notification

given to the other Contracting Party through the diplomatic

channel, declare its desire that the operation of the present

Convention, either in whole or in part or with such

modifications as may be found necessary for special application

in a particular case, shall extend to all or any of its territories for

whose international relations it is responsible, which impose

taxes substantially similar in character to those which are the

subject of the present Convention. When the other Contracting

Party has, by a written communication through the diplomatic

channel, signified to the first Contracting Party that such

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notification is accepted in respect of such territory or territories,

the present Convention, in whole or in part or with such

modifications as may be found necessary for special application

in a particular case, as specified in the notification, shall apply

to the territory or territories named in the notification on and

after the date or dates specified therein. None of the provisions

of the present Convention shall apply to any such territory in

the absence of such acceptance in respect of that territory.‖

ARTICLE II

This supplementary Protocol, which shall be regarded as an

integral part of the said Convention, shall be ratified and the

instruments of ratification thereof shall be exchanged in

London.

IN WITNESS WHEREOF the undersigned, being authorized

thereto by their respective Governments, have signed this

supplementary Protocol and have affixed thereto their seals.

DONE in duplicate at Washington this twenty-fifth day of May,

1954.

FOR THE GOVERNMENT OF THE UNITED KINGDOM OF

GREAT BRITAIN AND NORTHERN IRELAND :

Roger Makins,

Her Majesty‘s

Ambassador Extraordinary and Plenipotentiary

at Washington.

FOR THE GOVERNMENT OF THE UNITED STATES OF

AMERICA :

John Foster Dulles,

Secretary of State of the

United States of America.

SUPPLEMENTARY PROTOCOL BETWEEN THE UNITED

KINGDOM OF GREAT BRITAIN AND NORTHERN

IRELAND AND THE UNITED STATES OF AMERICA

AMENDING THE CONVENTION FOR THE AVOIDANCE

OF DOUBLE TAXATION AND THE PREVENTION OF

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FISCAL EVASION WITH RESPECT TO TAXES ON

INCOME, SIGNED AT WASHINGTON ON THE 16TH

APRIL 1945, AS MODIFIED BY THE SUPPLEMENTARY

PROTOCOL SIGNED AT WASHINGTON ON THE 6TH

JUNE 1946 AND BY THE SUPPLEMENTARY PROTOCOL

SIGNED AT WASHINGTON ON THE 25TH MAY 1954.

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Government of the United States of

America,

Desiring to conclude a further supplementary Protocol

amending the Convention for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with respect to

Taxes on Income, signed at Washington on the 16th April 1945,

as modified by the supplementary Protocol signed at

Washington on the 6th June 1946 and by the supplementary

Protocol signed at Washington on the 25th May 1954,

Have agreed as follows :

ARTICLE 1

Paragraphs (1) and (2) of Article VIII of the Convention of the

16th April 1945 for the Avoidance of Double Taxation and the

Prevention of Fiscal Evasion with respect to taxes on income

are hereby amended to read as follows :

―(1) Royalties and other amounts paid as consideration for the use

of, or for the privilege of using, copyrights, patents, designs,

secret processes and formulae, trade marks and other like

property, and derived from sources within the United States by

a resident of the United Kingdom who is subject to United

Kingdom tax on such royalties or other amounts shall be

exempt from United States tax (a) if such resident is not

engaged in trade or business in the United States through a

permanent establishment situated therein or (b) if such resident

is so engaged, the royalties or other amounts are not directly

associated with the business carried on through that permanent

establishment.

(2) Royalties and other amounts paid as consideration for the use

of, or for the privilege of using, copyrights, patents, designs,

secret processes and formulae, trade marks, and other like

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property, and derived from sources within the United Kingdom

by a resident of the United States who is subject to United

States tax on such royalties or other amounts shall be exempt

from United Kingdom tax (a) if such resident is not engaged in

trade or business in the United Kingdom through a permanent

establishment situated therein or (b) if such resident is so

engaged, the royalties or other amounts are not directly

associated with the business carried on through that permanent

establishment.‖

ARTICLE II

Paragraph (1) of Article XIII of the said Convention is hereby

amended to read as follows :

―(1) Subject to Sections 901 to 905 of the United States Internal

Revenue Code as in effect on the 1st day of January 1956,

United Kingdom tax shall be allowed as a credit against United

States tax. For this purpose

(a) the recipient of a dividend paid by a corporation which is

a resident of the United Kingdom shall be deemed to have

paid the United Kingdom tax appropriate to such

dividend, and

(b) the recipient of any royalty or other amount coming

within the scope of Article VIII of the present Convention

shall be deemed to have paid any United Kingdom tax

legally deducted from the royalty or other amount by the

person by or through whom any payment thereof is made,

if the recipient of the dividend or royalty or other amount, as the

case may be, elects to include in his gross income for the

purposes of United States tax the amount of such United

Kingdom income tax.‖

ARTICLE III

(1) This supplementary Protocol shall be ratified and the

instruments of ratification shall be exchanged at London as

soon as possible.

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(2) This supplementary Protocol shall enter into force upon the

exchange of instruments of ratification and shall thereupon have

effect—

(a) In the United Kingdom:

(1) as respects income tax and surtax for any year of

assessment beginning on or after the 6th April 1956;

(ii) as respects profits tax for any chargeable accounting

period beginning on or after the 1st April 1956, and

for the unexpired portion of any chargeable

accounting period current at that date.

(b) In the United States:

As respects taxable years beginning on or after the 1st January

1956.

IN WITNESS WHEREOF the undersigned, being authorised

thereto by their respective Governments, have signed this

supplementary Protocol and have affixed thereto their seals.

DONE in duplicate at Washington this nineteenth day of August,

1957.

For the Government of the United Kingdom of Great Britain

and Northern Ireland:

(L.S.) HAROLD CACCIA.

For the Government of the United States of America:

(L.S.) JOHN FOSTER DULLES.

SCHEDULE 2

(Section 2)

1. APPLICATION

(a) The provisions of the Convention and Protocols incorporated in

Schedule 1 to this Order shall apply as modified below—

(1) as if the contracting parties were Saint Lucia and the

Government of the United States; and as if the tax

concerned in the case of Saint Lucia were Income Tax;

(ii) as if references to the date of signature were references to

the 3rd day of December, 1958;

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(iii) as if references to the 6th day of April were references to

the 1st day of January.

(b) The extension shall have effect in Saint Lucia as respects tax for

the year of assessment next following that in which the last of

those measures shall have been taken in the United States and

Saint Lucia necessary to give the extension the force of law in

the United States and Saint Lucia and for subsequent years of

assessment and will have effect in the United States as respects

United States tax for the taxable year beginning on or after the

1st day of January in that next following calendar year.

2. MODIFICATIONS

(a) In Article VI(2) the words ―exempt from United Kingdom

Surtax‖ shall be understood for the purposes of this extension as

though they read ―is not liable to any tax in the territory other

than tax imposed with respect to the profits or earnings of the

corporation out of which such dividends are paid‖.

(b) In Article IX(2) the words ―shall be exempt from United

Kingdom surtax‖ shall be understood for the purposes of this

extension as though they read ―is not liable to tax in the

territory at a rate in excess of the rate applicable to a company‖.

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INCOME TAX (DOUBLE TAXATION RELIEF)

(SWITZERLAND) ORDER – SECTION 60

(Statutory Instrument 16/1965)

Commencement [28 August 1965]

WHEREAS it is provided by section 52(1) of the Income Tax

Act, 194715 that if the Governor General by Order declares that

arrangements specified in the Order have been made with the

Government of any territory outside Saint Lucia with a view to

affording relief from double taxation in relation to income tax

and any tax of a similar character imposed by the laws of that

territory and that it is expedient that those arrangements have

effect, the arrangements have effect in relation to income tax

despite anything in any enactment;

AND WHEREAS by a Convention dated 30 September 1954

between the Government of the United Kingdom and Northern

Ireland and the Swiss Federal Council, arrangements were made

among other things for the avoidance of double taxation;

AND WHEREAS provision is made in the said Convention for the

extension by means of an exchange of notes between the High

Contracting Parties of the said Convention, subject to such

modifications and conditions (including conditions as to

termination) as may be specified in the exchange of notes, to

any territory, for whose foreign relations the United Kingdom is

responsible, which imposes taxes substantially similar in

character to those which are the subject of the said Convention;

AND WHEREAS by a notification dated 1 January 1961 the said

Convention with certain modifications was applied to Saint

Lucia.

1. SHORT TITLE

This Order may be cited as the Income Tax (Double Taxation Relief)

(Switzerland) Order.

15 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. This Order was continued in force by the

1965 Act and section 153 of the Income Tax Act.

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2. DECLARATION

It is hereby declared—

(a) that the arrangements specified in Schedule 1 to this

Order as modified by the provisions of Schedule 2 to this

Order have been made with the Swiss Federal Council;

(b) that it is expedient that those arrangements should have

effect.

SCHEDULE 1

(Section 2)

CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT

BRITAIN AND NORTHERN IRELAND AND THE SWISS

CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION

WITH RESPECT TO TAXES ON INCOME.

The Government of the United Kingdom of Great Britain and

Northern Ireland and the Swiss Federal Council.

Desiring to conclude a Convention for the avoidance of double

taxation with respect to taxes on income.

Have appointed for that purpose as their respective

Plenipotentiaries:

The Government of the United Kingdom of Great Britain and

Northern Ireland:

Alfred Douglas Dodds-Parker, Esquire, Parliamentary

Under-Secretary of State for Foreign Affairs;

The Swiss Federal Council;

Monsieur Erwin Bernath, Swiss Charge d‘Affaires ad

interim in London;

Who, having communicated to one another their full powers,

found in good and due form, have agreed as follows:

ARTICLE 1

(1) The taxes which are the subject of the present Convention are—

(a) In the United Kingdom:

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The income tax (including surtax), the profits tax and the

excess profits levy (hereinafter referred to as ―United

Kingdom tax‖);

(b) In Switzerland:

The federal, cantonal and communal taxes on income

(total income, earned income, income from capital,

industrial and commercial profits, &c.), but not including

the Federal coupon tax except where expressly mentioned

(hereinafter referred to as ―Swiss tax‖).

(2) The present Convention shall also apply to any other taxes of a

substantially similar character imposed in the United Kingdom

or Switzerland subsequently to the date of signature of the

present Convention.

ARTICLE II

(1) In the present Convention, unless the context otherwise

requires—

(a) The term ―United Kingdom‖ means Great Britain and

Northern Ireland, excluding the Channel Islands and the

Isle of Man;

(b) The term ―Switzerland‖ means the Swiss Confederation.

mean the United Kingdom or Switzerland, as the context

requires;

(d) The term ―tax‖ means United Kingdom tax or Swiss tax,

as the context requires;

(e) The term ―person‖ includes any individual, company,

unincorporated body of persons and any other entity with

or without juridical personality;

(f) The term ―company‖ means in relation to the United

Kingdom any body corporate, and in relation to

Switzerland any entity with juridical personality;

(g) The term ―resident of the United Kingdom‖ means:

(i) any company or partnership whose business is

managed and controlled in the United Kingdom;

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(ii) any other person who is resident in the United

Kingdom for the purposes of United Kingdom tax

and not resident (by reason of domicile or sojourn)

in Switzerland for the purposes of Swiss tax;

(h) The term ―resident of Switzerland‖ means—

(i) any company or partnership (―société simple,‖

―société‚ en nom collectif‖ or ―société‚ en

commandite‖) created or organised under Swiss

law, if its business is not managed and controlled in

the United Kingdom;

(ii) any other person who is resident (by reason of

domicile or sojourn) in Switzerland for the purposes

of Swiss tax and not resident in the United

Kingdom for the purposes of United Kingdom tax;

(i) The terms ―resident of one of the territories‖ and ―resident

of the other territory‖ mean a resident of the United

Kingdom or a resident of Switzerland, as the context

requires;

(j) the terms ―United Kingdom enterprise‖ and ―Swiss

enterprise‖ mean respectively an industrial or commercial

enterprise or undertaking carried on by a resident of the

United Kingdom and an industrial or commercial

enterprise or undertaking carried on by a resident of

Switzerland, and the terms ―enterprise of one of the

territories‖ and ―enterprise of the other territory‖ mean a

United Kingdom enterprise or a Swiss enterprise, as the

context requires;

(k) The term ―permanent establishment‖ means a branch,

management, office, factory, workshop or other fixed

place of business, and a farm, mine, quarry or other place

of natural resources subject to exploitation. It also

includes a place where building construction is carried on

by contract for a period of at least one year, but does not

include an agency unless the agent has and habitually

exercises a general authority to negotiate and conclude

contracts on behalf of an enterprise of one of the

territories. In this connexion—

(i) An enterprise of one of the territories shall not be

deemed to have a permanent establishment in the

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other territory merely because it carries on business

dealings in that other territory through a bona fide

broker, general commission agent or other

independent agent acting in the ordinary course of

his business as such;

(ii) The fact that an enterprise of one of the territories

maintains in the other territory a fixed place of

business exclusively for the purchase of goods or

merchandise shall not of itself constitute that fixed

place of business a permanent establishment of the

enterprise;

(iii) The fact that an enterprise of one of the territories

has a subsidiary company which is a resident of the

other territory or which is engaged in trade or

business in that other territory (whether through a

permanent establishment or otherwise) shall not of

itself constitute that subsidiary company a

permanent establishment of the enterprise of the

former territory;

(l) The term ―industrial or commercial profits‖ includes

manufacturing, mercantile, mining, farming, financial and

insurance profits, and rents and royalties in respect of

cinematograph films, but does not include income in the

form of dividends, interest or royalties (other than

cinematograph royalties) except any such income which,

under the laws of one of the territories and in accordance

with Article III of the present Convention, is attributable

to a permanent establishment situated therein;

(m) The term ―competent authority‖ means, in the case of the

United Kingdom, the Commissioners of Inland Revenue

or their authorised representative; in the case of

Switzerland, the Director of the Federal Tax

Administration or his authorised representative; and in the

case of any territory to which the present Convention is

extended under Article XXI, the competent authority for

the administration in such territory of the taxes to which

the Convention applies.

(2) Where the present Convention provides that income from a

source within Switzerland shall be exempt from, or entitled to a

reduced rate of, tax in Switzerland if (with or without other

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conditions) it is subject to tax in the United Kingdom, and

under the law in force in the United Kingdom the said income is

subject to tax by reference to the amount thereof which is

remitted to or received in the United Kingdom and not by

reference to the full amount thereof, then the exemption or

reduction in rate to be allowed under the Convention in

Switzerland shall apply only to so much of the income as is

remitted to or received in the United Kingdom.

(3) Where under any provision of the present Convention a

partnership is entitled to exemption from United Kingdom tax

as a resident of Switzerland on any income, such a provision

shall not be construed as restricting the right of the United

Kingdom to charge any member of the partnership, being a

person who is resident in the United Kingdom for the purposes

of United Kingdom tax (whether or not he is also resident in

Switzerland for the purposes of Swiss tax), to tax on his share

of the income of the partnership; but any such income shall be

deemed for the purposes of Article XV to be income from

sources within Switzerland.

(4) Where under any provision of the present Convention an estate

of a deceased person is entitled to exemption from United

Kingdom tax as a resident of Switzerland on any income, such a

provision shall not be construed as requiring the United

Kingdom to grant exemption from United Kingdom tax in

respect of such part of such income as goes to any heir of such

estate who is not resident in Switzerland for the purposes of

Swiss tax and whose share of such income is not subject to

Swiss tax either in his hands or in the hands of the estate.

(5) In the application of the provisions of the present Convention

by either Contracting Party any term not otherwise defined

shall, unless the context otherwise requires, have the meaning

which it has under the laws in force in the territory of that Party

relating to the taxes which are the subject of the Convention.

ARTICLE III

(1) The industrial or commercial profits of a United Kingdom

enterprise shall not be subject to Swiss tax unless the enterprise

is engaged in trade or business in Switzerland through a

permanent establishment situated therein. If it is so engaged, tax

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may be imposed on those profits by Switzerland, but only on so

much of them as is attributable to that permanent establishment.

(2) The industrial or commercial profits of a Swiss enterprise shall

not be subject to United Kingdom tax unless the enterprise is

engaged in trade or business in the United Kingdom through a

permanent establishment situated therein. If it is so engaged, tax

may be imposed on those profits by the United Kingdom, but

only on so much of them as is attributable to that permanent

establishment.

(3) Where an enterprise of one of the territories is engaged in trade

or business in the other territory through a permanent

establishment situated therein, there shall be attributed to that

permanent establishment the industrial or commercial profits

which it might be expected to derive if it were an independent

enterprise engaged in the same or similar activities under the

same or similar conditions and dealing at arm‘s length with the

enterprise of which it is a permanent establishment.

(4) Where an enterprise of one of the territories derives profits,

under contracts concluded in that territory, from sales of goods

or merchandise stocked in a warehouse in the other territory,

those profits shall not be attributed to a permanent

establishment of the enterprise in that other territory,

notwithstanding that the offers of purchase have been obtained

by an agent in that other territory and transmitted by him to the

enterprise for acceptance.

(5) No portion of any profits arising to an enterprise of one of the

territories shall be attributed to a permanent establishment

situated in the other territory by reason of the mere purchase of

goods or merchandise within that other territory by the

enterprise.

(6) In the determination of the industrial or commercial profits of a

permanent establishment there shall be allowed as deductions

all expenses which are reasonably applicable to the permanent

establishment, including executive and general administrative

expenses so applicable, whether incurred in the territory in

which the permanent establishment is situated or elsewhere.

ARTICLE IV

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Where—

(a) an enterprise of one of the territories participates directly

in the management, control or capital of an enterprise of

the other territory, or

(b) the same persons participate directly or indirectly in the

management, control or capital of an enterprise of one of

the territories and an enterprise of the other territory.

and, in either case, conditions are made or imposed between the

2 enterprises, in their commercial or financial relations, which

differ from those which would be made between independent

enterprises, then any profits which would but for those

conditions have accrued to one of the enterprises but by reason

of those conditions have not so accrued may be included in the

profits of that enterprise and taxed accordingly.

ARTICLE V

Notwithstanding the provisions of Articles III and IV, profits

which a resident of one of the territories derives from operating

ships or aircraft, including profits of that resident from the sale

of tickets for passages by such ships or aircraft, shall be exempt

from tax in the other territory.

ARTICLE VI

(1) Dividends (other than dividends which, under the laws of the

United Kingdom and in accordance with Article III of this

Convention, are attributable to a permanent establishment

situated in the United Kingdom) paid by a company which is a

resident of the United Kingdom to a resident of Switzerland

who is subject to Swiss tax in respect thereof shall be exempt

from United Kingdom surtax.

(2) The industrial and commercial profits of a Swiss enterprise

engaged in trade or business through a permanent establishment

in the United Kingdom shall, so long as undistributed profits of

United Kingdom enterprises are effectively charged to United

Kingdom profits tax at a lower rate than distributed profits of

such enterprises, be charged to United Kingdom profits tax only

at that lower rate.

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(3) Where not less than 50% of the entire voting power of a

company which is a resident of the United Kingdom is

controlled, directly or indirectly, by a company which is a

resident of Switzerland, the distributions by the former

company to the latter company, and to any other company

which is a resident of Switzerland and which beneficially owns

not less than 10%. of the entire share capital of the company

paying the dividends, shall be left out of account in computing

United Kingdom profits tax effectively chargeable on that

company at the rate appropriate to distributed profits.

(4)

(a) The Swiss anticipatory tax may be charged in respect of

dividends paid by any company created under Swiss law

to a resident of the United Kingdom, but, in the case of

any such resident who is subject to United Kingdom tax

in respect thereof, the rate of anticipatory tax shall be

reduced in accordance with the following provisions of

this paragraph (unless the dividends are, under the laws of

Switzerland and in accordance with Article III of this

Convention, attributable to a permanent establishment

situated in Switzerland).

(b) If that resident is an individual whose effective rate of

United Kingdom tax does not exceed 5%., the

anticipatory tax shall not be charged.

United Kingdom tax exceeds 5%., the anticipatory tax

shall be charged only at the rate which, when added to the

rate of Federal coupon tax, equals that effective rate.

(d) If that resident is a company which controls, directly or

indirectly not less than 95% of the entire voting power of

the company paying the dividends, the anticipatory tax

shall be reduced by an amount equal to 20% of the

dividend.

(e) If that resident is a company which controls, directly or

indirectly less than 95% but not less than 50%. of the

entire voting power of the company paying the dividends,

the anticipatory tax shall be reduced by an amount equal

to 10%. of the dividend.

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(f) If that resident is a company which beneficially owns not

less than 10%. of the entire share capital of the company

paying the dividends, and that provisions of either

subparagraph (d) or subparagraph (e) of this paragraph

apply to some part of the dividends paid by the latter

company, the anticipatory tax shall be reduced by an

amount equal to 10%. of the dividend.

(5) If at any time distributed profits of companies become

chargeable to United Kingdom profits tax at a rate other than

20%. above the rate at which undistributed profits are

effectively chargeable to that tax, the competent authorities of

the 2 Contracting Parties may consult together in order to

determine whether it is necessary for this reason to amend

subparagraphs (d), (e) and (f) of the preceding paragraph. After

such consultation has taken place either of the Contracting

Parties may give to the other Contracting Party through the

diplomatic channel written notice of termination of the

provisions of paragraph (3) and of subparagraphs (d), (e) and (f)

of paragraph (4) of this Article, and, in such event, those

provisions shall cease to be effective from the date on which the

relevant change in the rates of United Kingdom profits tax took

effect.

(6) Subject to the provisions of subparagraph (a) of paragraph (4)

of this Article, where a company which is a resident of one of

the territories derives profits or income from sources within the

other territory, there shall not be imposed in that other territory

any form of taxation on dividends paid by the company to

persons not resident in that other territory, or any tax in the

nature of an undistributed profits tax on undistributed profits of

the company, whether or not those dividends or undistributed

profits represent, in whole or in part, profits or income so

derived.

ARTICLE VII

(1) Any interest or royalty derived from sources within one of the

territories by a resident of the other territory, who is subject to

tax in that other territory in respect thereof, shall be exempt

from tax in that first territory.

(2) In this Article—

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(a) The term ―interest‖ means interest on bonds, securities,

notes, debentures or on any other form of indebtedness

(including mortgages or bonds secured on real property);

(b) The term ―royalty‖ means any royalty or other amount

paid as consideration for the right to use any copyright,

artistic or scientific work, patent, model, design, secret

process or formula, trademark, or other like property or

right (including rentals and like payments for the use of

industrial or commercial machinery or plant or scientific

apparatus), but does not include any royalty or other

amount paid in respect of the operation of mines, quarries

or other natural resources.

(3) Any capital sum derived from sources within one of the

territories from the sale of property or rights mentioned in

subparagraph (b) of paragraph (2) of this Article by a resident

of the other territory shall be exempt from tax in the first

territory.

(4) Where there is a special relationship between debtor and

creditor or both debtor and creditor have a special relationship

with a third person or persons, and in consequence the amount

paid is greater than would have been agreed upon if debtor and

creditor had been at arm‘s length, the exemption provided by

this Article shall not apply to the excess.

(5) Any interest or royalty exempted from United Kingdom tax by

this Article shall be allowed as a deduction for profits tax and

excess profits levy purposes from the profits or income of the

person paying the interest or royalty, whatever the relationship

between that person and the person receiving the interest or

royalty may be.

(6) The exemptions from tax in one of the territories provided for in

this Article shall not apply to interest, royalties or capital sums

which, under the laws of that territory and in accordance with

Article III of this Convention, are attributable to a permanent

establishment situated therein.

ARTICLE VIII

(1) A resident of one of the territories shall be exempt in the other

territory from any tax on gains from the sale, transfer or

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exchange of capital assets (other than gains which, under the

laws of that other territory and in accordance with Article III of

this Convention, are attributable to a permanent establishment

situated therein).

(2) In this Article the term ―capital assets‖ means

property, whether corporeal or incorporeal.

any movable

ARTICLE IX

(1) Income derived from real property situated in one of the

territories by a resident of the other territory shall be subject to

tax in accordance with the laws of the first-mentioned territory.

Where the income is also subject to tax in the other territory,

relief from double taxation shall be given in accordance with

the provisions of Article XV.

(2) In this Article, the term ―income from real property‖ means

income of whatever nature derived from real property,

including gains derived from the sale or exchange of such

property, and it also includes royalties in respect of the

operation of mines, quarries or other natural resources. It does

not however include interest from mortgages or bonds secured

on such property.

ARTICLE X

(1) Remuneration, including pensions, paid by, or out of funds

created by, the Government of the United Kingdom to an

individual in respect of services rendered to that Government in

the discharge of governmental functions shall be exempt from

Swiss tax: provided that the exemption shall not apply to

remuneration, other than a pension, paid to a Swiss citizen who

is not also a British subject.

(2) Remuneration, including pensions, paid by, or out of funds

created by, the Swiss Confederation or by any Swiss canton to

an individual in respect of services rendered to Switzerland in

the discharge of governmental functions shall be exempt from

United Kingdom tax: provided that the exemption shall not

apply to remuneration, other than a pension, paid to a British

subject who is not also a Swiss citizen.

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(3) The provisions of paragraphs (1) and (2) of this Article shall not

apply to payments in respect of services rendered in connection

with any trade or business carried on by either Contracting

Party or by any Swiss canton for purposes of profit.

(4) The provisions of this Convention shall not be construed as

denying or affecting in any manner the right of diplomatic and

consular officers to other or additional exemptions now enjoyed

or which may hereafter be granted to them.

ARTICLE XI

(1) An individual who is a resident of the United Kingdom shall be

exempt from Swiss tax on profits or remuneration in respect of

personal (including professional) services performed within

Switzerland in any year of assessment if—

(a) he is present within Switzerland for a period or periods

not exceeding in the aggregate 183 days during that year,

and

(b)

(i) in the case of a directorship or employment, the

services are performed for or on behalf of a resident

of the United Kingdom;

(ii) in other cases, he has no office or other fixed place

of business in Switzerland, and

tax.

(2) An individual who is a resident of Switzerland shall be exempt

from United Kingdom tax on profits or remuneration in respect

of personal (including professional) services performed within

the United Kingdom in any year of assessment if—

(a) he is present within the United Kingdom for a period or

periods not exceeding in the aggregate 183 days during

that year, and

(b)

(i) in the case of a directorship or employment, the

services are performed for or on behalf of a resident

of Switzerland;

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(ii) in other cases, he has no office or other fixed place

of business in the United Kingdom; and

(3) The provisions of this Article shall not apply to the profits or

remuneration of public entertainers such as stage, motion

picture, radio or television artists, musicians and athletes.

ARTICLE XII

(1) Any pension (other than a pension of the kind referred to in

Article X) and any annuity, derived from sources within one of

the territories by an individual who is a resident of the other

territory and subject to tax in that other territory in respect

thereof, shall be exempt from tax in the first territory.

(2) In this Article—

(a) The term ―pension‖ means periodic payments made in

consideration of past services or by way of compensation

for injuries received;

(b) The term ―annuity‖ means a stated sum payable

periodically at stated times, during life or during a

specified or ascertainable period of time, under an

obligation to make the payments in return for adequate

and full consideration in money or money‘s worth.

ARTICLE XIII

(1) A professor or teacher from one of the territories, who receives

remuneration for teaching, during a period of temporary

residence not exceeding 2 years, at a university, college, school

or other educational institution in the other territory, shall be

exempt from tax in that other territory in respect of that

remuneration.

(2) A student or business apprentice from one of the territories,

who is receiving full-time education or training in the other

territory, shall be exempt from tax in that other territory on

payments made to him by persons outside that other territory

for the purposes of his maintenance, education or training.

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ARTICLE XIV

(1) Individuals who are residents of Switzerland shall be entitled to

the same personal allowances, reliefs and reductions for the

purposes of United Kingdom tax as British subjects not resident

in the United Kingdom.

(2) Individuals who are residents of the United Kingdom shall be

entitled to the same personal allowances, reliefs and reductions

for the purposes of Swiss tax as Swiss nationals resident in the

United Kingdom.

ARTICLE XV

(1) The laws of the Contracting Parties shall continue to govern the

taxation of income arising in either of the territories, except

where express provision to the contrary is made in the present

Convention. Where income is subject to tax in both territories,

relief from double taxation shall be given in accordance with

the following paragraphs of this Article.

(2) Subject to the provisions of the law of the United Kingdom

regarding the allowance as a credit against United Kingdom tax

of tax payable in a territory outside the United Kingdom, Swiss

tax payable, whether directly or by deduction in respect of

income from sources within Switzerland shall be allowed as a

credit against the United Kingdom tax payable in respect of that

income. Where such income is a dividend paid by a company

which is a resident of Switzerland to a company which controls,

directly or indirectly, not less than 50%, of the if entire voting

power of the former company, the credit shall take into account

(in addition to any Swiss tax appropriate to the dividend) the

Swiss tax payable by the former company in respect of its

profits. For the purpose of this paragraph, the term ―Swiss tax‖

shall include the Federal coupon tax, but shall not include the

communal taxes.

(3) Income (other than dividends) from sources within the United

Kingdom which under the laws of the United Kingdom and in

accordance with this Convention is subject to tax in the United

Kingdom either directly or by deduction shall be exempt from

Swiss tax.

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(4) In the case of a person (other than a company or partnership)

who is resident in the United Kingdom for the purposes of

United Kingdom tax an also resident (by reason of domicile or

sojourn) in Switzerland for the purposes of Swiss tax, the

provisions of paragraph (2) of this Article shall apply in relation

to income which that person derives from sources within

Switzerland, and the provisions of paragraph (3) of this Article

shall apply in relation to income which that person derives from

sources within the United Kingdom. If such person derives

income from sources outside both the United Kingdom and

Switzerland, tax may be imposed on that income in both the

territories (subject to the laws in force in the territories and to

any Convention which may exist between either of the

Contracting Parties and the territory from which the income is

derived) but the Swiss tax on so much of that income as is 1

subjected to tax in both the territories shall be limited to /2 of

the tax on such income, and the United Kingdom tax on that

income shall be reduced by a credit, in accordance with

paragraph (2) of this Article, for the Swiss tax so computed.

(5) For the purposes of this Article, profits or remuneration for

personal (including professional) services performed in one of

the territories shall be deemed to be income from sources within

that territory, except that the remuneration of a director of a

company shall be deemed to be income from sources within the

territory in which the company is resident, and the services of

an individual whose services are wholly or mainly performed in

ships or aircraft operated by a resident of one of the territories

shall be deemed to be performed in that territory.

ARTICLE XVI

(1) Where it is provided in this Convention that relief from tax in

respect of any kind of income shall be allowed in the territory

from which such income is derived, that provision shall not be

construed as requiring that income to be paid without deduction

of tax at source at the full rate. Where tax has been deducted at

source from such income the taxation authorities of the territory

in which relief from tax is required to be given shall, when the

taxpayer in receipt of the income shows to their satisfaction and

within the time limits prescribed in that territory that he is

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entitled to the relief, arrange for the appropriate repayment of

tax.

(2) Where any income is exempted from tax by any provision of

this Convention, it may nevertheless be taken into account in

computing the tax on other income or in determining the rate of

such tax.

(3) For the purpose of calculating the reliefs due under Articles VI

and XIV, the income of a partnership shall be regarded as that

of its individual members.

ARTICLE XVII

(1) The provisions of the present Convention shall not be construed

as restricting in any manner any exemption, deduction, credit or

other allowance now or hereafter accorded by the laws in force

in the territory of one of the Contracting Parties in the

determination of the tax imposed in such territory.

(2) The provisions of the present Convention shall not be construed

as derogating from any right or privilege conferred upon

taxpapers by the Agreement of the 17th October, 1931, between

the Government of the United Kingdom and the Swiss Federal

Council for reciprocal exemption from taxation on profits or

gains arising through an agency.

ARTICLE XVIII

(1) The nationals of one Contracting Party shall not be subjected in

the territory of the other Contracting Party to any taxation on

any requirement connected therewith which is either, higher or

more burdensome than the taxation and connected requirements

to which the nationals of the latter Party are or may be

subjected in similar circumstances.

(2) The enterprises of one of the territories, whether carried on by a

company, a body of persons or by individuals alone or in

partnership, shall not be subjected in the other territory, in

respect of income, profits or capital attributable to their

permanent establishments in that other territory, to any taxation

which is other, higher or more burdensome than the taxation to

which the enterprises of that other territory similarly carried on

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are or may be subjected in respect of the like income, profits or

capital.

(3) The income, profits, and capital of an enterprise of one of the

territories, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by a resident or residents of

the other territory, shall not be subjected in the first territory to

any taxation which is other, higher or more burdensome than

the taxation to which other like enterprises of that first territory

are or may be subjected in similar circumstances in respect of

the like income, profits and capital.

(4) Nothing in paragraph (1) or paragraph (2) of this Article shall

be construed as obliging one Contracting Party to grant

nationals of the other Contracting Party who are not resident in

the territory of the former Party the same personal allowance,

reliefs and reductions for tax purposes as are granted to its own

nationals.

(5) In this Article the term ―nationals‖ means—

(a) in relation to Switzerland, all Swiss citizens wherever

residing and all entities with or without juridical

personality created under Swiss laws;

(b) in relation to the United Kingdom, all British subjects and

British protected persons—

(i) residing in the United Kingdom or any territory to

which the present Convention is extended under

Article XXI, or

(ii) deriving their status as such from connection with

the United Kingdom or any territory to which the

present Convention is extended under Article XXI,

and all legal persons, partnerships, associations and

other entities deriving their status as such from the

law in force in the United Kingdom or any territory

to which the Convention is extended under Article

XXI.

(6) In this Article the term ―taxation‖ means taxes of every kind

and description levied on behalf of any authority whatsoever.

ARTICLE XIX

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(1) Where a taxpayer shows to the satisfaction of the competent

authority of the Contracting Party of which he is a national or in

whose territory he a resident that he has not received the

treatment in the other territory to which he is entitled under any

provision of this Convention, that competent authority shall

consult with the competent authority of the other Party with a

view to the avoidance of the double taxation in question.

(2) The competent authorities of the 2 Contracting Parties may

communicate with each other directly for the purpose of giving

effect to the provisions of this Convention (and in particular the

provisions of Articles III and IV) and for resolving any

difficulty or doubt as to the application or interpretation of the

Convention.

ARTICLE XX

(1) The competent authorities of the Contracting Parties shall

exchange such information (being information which is at their

disposal under their respective taxation laws in the normal

course of administration) as is necessary for carrying out the

provisions of the present Convention in relation to the taxes

which are the subject of the Convention. Any information so

exchanged shall be treated as secret and shall not be disclosed

to any persons other than those concerned with the assessment

and collection of the taxes which are the subject of the

Convention. No information as aforesaid shall be exchanged

which would disclose any trade, business, industrial or

professional secret or trade process.

(2) In no case shall the provisions of this Article be construed as

imposing upon either of the Contracting Parties the obligation

to carry out administrative measures at variance with the

regulations and practice of either Contracting Party or which

would be contrary to its sovereignty, security or public policy or

to supply particulars which are not procurable under its own

legislation or that of the Party making application.

ARTICLE XXI

(1) The present Convention may be extended, either in its entirety

or with modifications, to any territory for whose international

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relations the United Kingdom is responsible and which imposes

taxes substantially similar in character to those which are the

subject of the Convention, and any such extension shall take

effect from such date and subject to such modifications and

conditions (including conditions as to termination) as may be

specified and agreed between the Contracting Parties in notes to

be exchanged for this purpose.

(2) The termination in respect of the United Kingdom or

Switzerland of the present Convention under Article XXIV

shall, unless otherwise expressly agreed by the Contracting

Parties, terminate the application of the Convention to any

territory to which it has been extended under this Article.

ARTICLE XXII

(1) The present Convention shall be ratified and the instruments of

ratification shall be exchanged at Berne as soon as possible.

(2) The present Convention

exchange of ratifications.

shall enter into force upon the

ARTICLE XXIII

(1) Upon the entry into force of the present Convention in

accordance with Article XXII, the provisions of the Convention

shall have effect—

(a) In the United Kingdom—

as respects income tax (including surtax) for any year of

assessment beginning on or after the 6th April, 1953; as

respects profits tax and excess profits levy in respect of the

following profits—

(i) profits by reference to which income tax is, or but

for the present Convention would be chargeable for

any year of assessment beginning on or after the 6th

April, 1953;

(ii) other profits being profits by reference to which

income tax is not chargeable, but which arise in any

chargeable accounting period beginning on or after

the 1st April, 1953, or are attributable to so much of

any chargeable accounting period falling partly

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before and partly after that date as falls after that

date.

(b) In Switzerland—for any taxable year beginning on or

after the 1st January 1953.

(2) The exemption from tax provided in Article V shall have effect

for any year of assessment beginning on or after the 6th April,

1946.

ARTICLE XXIV

The present Convention shall continue in effect indefinitely but

either Contracting Party may, on or before the 30th June in any

calendar year not earlier than the year 1957, give to the other

Contracting Party, through the diplomatic channel, written

notice of termination and, in such event, the Convention shall

cease to be effective—

(a) In the United Kingdom—

as respects income tax (including surtax) for any year of

assessment beginning on or after the 6th April in the

calendar year next following that in which the notice is

given; as respects profits tax in respect of the following

profits—

(i) profits by reference to which income tax is

chargeable for any year of assessment beginning on

or after the 6th April in the calendar year next

following that in which the notice is given;

(ii) other profits being profits by reference to which

income tax is not chargeable, but which arise in any

chargeable accounting period beginning on or after

the 1st April in the calendar year next following that

in which the notice is given or are attributable to so

much of any chargeable accounting period falling

partly before and partly after that date as falls after

that date;

(b) In Switzerland—

for any taxable year beginning on or after 1 January of the

calendar year next following that in which the notice is given.

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IN WITNESS WHEREOF the above-mentioned

Plenipotentiaries have signed the present Convention and have

affixed thereto their seals.

Done in duplicate at London, the 30th day of September, one

thousand nine hundred and fifty-four, in the English and French

languages, both texts being equally authoritative.

(Sgd.) (L.S.) DOUGLAS DODDS-PARKER,

(Sgd.) (L.S.) E. BERNATH.

SCHEDULE 2

(Section 2)

APPLICATION

1. The said Convention as modified by the present Annex shall

apply in the case of Saint Lucia—

(a) as if the Contracting Parties were the Swiss Federal

Council and the Government of Saint Lucia ;

(b) as if the taxes concerned in the case of Saint Lucia were

income tax;

Convention‖ were references to the date of the Exchange

of Notes to which the present Annex is appended.

2. When the last of those measures shall have been taken in

Switzerland and in Saint Lucia necessary to give the present

extension the force of law in Switzerland and in Saint Lucia

respectively, the present extension shall have effect—

(a) in Switzerland : for any taxable year beginning on or after

the first day of January, 1961; and

(b) in Saint Lucia : as respects taxes charged for the year of

assessment or year of income beginning on the 1st

January 1961, and for subsequent years, years of

assessment or years of income.

3. The Swiss Federal Council shall inform the Government of the

United Kingdom in writing through the diplomatic channel

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when the last of the measures necessary, as indicated in

paragraph (2) have been taken in Switzerland. The Government

of the United Kingdom shall inform the Swiss Federal Council

in writing through the diplomatic channel when the last of the

measures necessary, as indicated in paragraph (2), have been

taken in Saint Lucia.

(4) The present extension shall continue in effect indefinitely but

either the Government of the United Kingdom or the Swiss

Federal Council may, on or before the 30th of June in any

calendar year not earlier than the year 1966 give to the other

through the diplomatic channel written notice of termination

which may apply to Saint Lucia and in such event the present

extension shall cease to have effect,

(a) in Switzerland : for any taxable year beginning on or after

the first day of January of the calendar year next

following that in which the notice is given ; and

(b) in Saint Lucia : as respects taxes charged for any year,

year of assessment or year of income beginning on or

after 1st January, 1961 in the calendar year next following

that in which the notice is given.

MODIFICATIONS

The said Convention shall, for the purposes of the extension to

Saint Lucia, apply with the following modifications—

(a) For the purposes of the extension of the Convention to

Saint Lucia, Article VI shall be deleted ;

(b) for the purposes of the extension of the Convention to

Saint Lucia, references to interest in Article VII of the

Convention shall be deemed to be deleted, and in Article

XV (3) the words in brackets shall be deemed to be

replaced by the words ―other than dividends and interest‖;

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INCOME TAX (FORMS) RULES – SECTION 151

(Statutory Instrument 42/1949)

Commencement [30 July 1949]

1. SHORT TITLE

These Rules may be cited as the Income Tax (Forms) Rules.

2. FORMS

The Income Tax forms appearing in the Schedule are the forms under

the Income Tax Act, 1947.16

3. FORMS MAY BE OBTAINED AT TREASURY

The said forms with the exception of Forms 5 and 7 may be obtained

at the Treasury in Castries or at any district revenue office in other

parts of Saint Lucia.

SCHEDULE

(Section 2)

No. of Form. Description.

1. Notice and return under section 37 of the Act (Return — General

Form).

2. Notice and return under section 38 of the Act (Employers).

3. Notice and list to be delivered for the purposes of sections 30, 31,

32 of the Act (Agents, etc., of non-residents).

4. Notice and list to be delivered for the purposes of sections 29, 31,

32 of the Act (Trustees, Executors, etc.).

5. Notice of assessment, section 47 of the Act.

16 Editor’s note: This Act was repealed by the Income Tax Act, 1965 which itself was

repealed and replaced by the Income Tax Act. These Rules were continued in force by the

1965 Act and section 153 of the Income Tax Act.

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6. Account to be rendered under section 36 of the Act by persons

paying mortgage or debenture interest to persons not resident

in Saint Lucia.

7. Declaration required by section 4 of the Act (Declaration of

Official Secrecy).

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INCOME TAX APPEALS AGAINST ASSESSMENTS,

RULES – SECTION 15117

(Statutory Instrument 14/1924)

1. In the notice in writing to be given by the appellant to the

Commissioner the grounds, reasons, or particulars of the appeal

shall be clearly stated and the said notice shall be served on the

Commissioner.

Such notice may be served through the Sheriff‘s Office and if

so served, the return of service of the said notice on the

Commissioner shall be made on a duplicate or copy of the

notice to be delivered in the Sheriff‘s Office by the appellant at

the time of delivering the notice in writing for service.

If the notice in writing is not served through the Sheriff‘s Office

an affidavit by the person serving such notice shall be similarly

made on the duplicate or copy of such notice.

2. The appellant shall before the expiration of the third day

computing from the day of service of the notice referred to in

rule 1 file in the Registry of the High Court (a) an application to

the judge in chambers to fix a day for the hearing of the appeal

and (b) the duplicate or copy of the notice with the return of

service or affidavit required by rule 1.

3. A copy of the order fixing the day of the hearing of the appeal

may be served on the Commissioner through the sheriff‘s office

and if so served the return of service shall be filed by the

appellant in the Registry before the day fixed for the hearing of

the appeal.

If the copy of the order is not served through the sheriff‘s office

an affidavit by the person serving such copy shall be similarly

filed as required by the preceding paragraph.

4. The proceedings in the appeal shall be intituled.

―IN THE EASTERN CARIBBEAN SUPREME COURT (SAINT LUCIA).

17 Editor’s note: These Rules were continued under the Income Tax Act, 1965. That Act

was repealed and replaced by the Income Tax Act. However, the rules continue in force

under section 153.

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(In Chambers).‖

In the matter of the Income Tax Act and of an appeal against

assessment by (state name of Appellant),

Date of the Commissioner‘s refusal to amend assessment............................‖

(state day with month and year).

(A short heading or description of the proceeding should follow — e.g.

―APPLICATION TO FIX DATE FOR HEARING OF APPEAL‖ or

as the case may be).

Income Tax Act, 1989 (Chapter 15.02), Saint Lucia

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