INDIVIDUAL TAXES
SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in the past year.
TERRITORIALITY AND RESIDENCE
Citizens of Trinidad and Tobago who are also resident therein are taxed on their worldwide income whether or not such earnings are remitted to Trinidad and Tobago. A nonresident alien is taxed on income arising from employment in Trinidad and Tobago, subject, where applicable, to the provisions of double taxation treaties. Aliens are considered temporarily
resident for tax purposes if they are in Trinidad and Tobago for more than 183 days in any calendar year.
GROSS INCOME
Employee gross income/An alien is taxed on income received for services performed in Trinidad and Tobago whether or not such income is received in Trinidad and Tobago. For tax purposes, the term "income" includes all benefits and allowances derived from employment, including the value of board and lodging provided by the employer.
Sole traders and self-employed individuals are also subject to a business levy on income exceeding certain levels. (See"Other taxes" below.)
Capital gains and investment income/Only gains on the disposal of an asset within 12 months of its acquisition are taxable. Excluded are gains on the disposal of any security in Trinidad and Tobago; also excluded are gains on motorcars and household goods disposed of for TT$5,000 or under. Taxable gains are included with other income and are not separately taxed.
Capital gains realized outside Trinidad and Tobago by resident aliens are not taxable.
See "Other taxes" below for the taxation of interest and dividends.
Income arising outside Trinidad and Tobago paid to a resident alien is taxable in Trinidad and Tobago only to the extent that such income is received in Trinidad and Tobago.
DEDUCTIONS
Business deductions/An employed individual is not entitled to any blanket or standard deductions. Such an individual may claim a deduction only for unreimbursed travel expenses incurred wholly, exclusively and necessarily in the course of employment. Where the individual is self-employed and is carrying on a trade, business, profession, or vocation, the expenses incurred wholly and exclusively in the production of the income are deductible, as are capital allowances.
Promotional expenses incurred by sole traders or persons employed in agriculture in the expansion of existing markets or the creation of new markets for the export of locally produced goods are tax deductible as an expense at 150% of the actual outlay. Further details may be found under "Export incentives" in the 1999 edition of Corporate Taxes-A Worldwide Summary.
Nonbusiness expenses/A deduction in respect mortgage interest for owner-occupied property is granted up to an amount of TT$18,000. This allowance may also be used in respect of expenses incurred for tertiary education of the taxpayer or the taxpayer or the taxpayer's spouse or children.
Income received on an annuity purchased by an individual over 60 years of age is exempt from tax.
Child maintenance up to TT$1,200 per child is exempt from tax in the hands of a recipient when received under a deed of covenant or court order.
Personal allowances/A personal allowance of TT$20,000 per taxpayer is granted.
TAX CREDITS
Credit is granted to residents for taxes paid in foreign countries and to nonresidents for doubly taxed income on the bases set out in existing double taxation treaties for the particular type of income.
OTHER TAXES
Tax on interest/Interest received by a resident individual on all classes of savings or other accounts with banks, financial institutions or other forms of deposit-taking institutions is taxed at source at the rate of 15%. Taxpayers may, however, elect to include the interest in their tax returns if their marginal rate is less than 15%. Exemption from this tax
is granted to persons aged 60 years and over.
Tax on dividends/Dividends, excluding preference dividends, received from investments in resident companies are now exempt from tax in the hands of resident individuals. Distributions other than interest received from a mutual fund established in Trinidad and Tobago are also exempt from tax in the hands of a resident individual.
Tax on insurance premiums/A tax on general insurance premiums at the rate of 6% is imposed. Excluded are long-term (life) insurance business, commercial insurance relating to ships and aircraft, loss of or damage to goods in international transit, risks arising outside Trinidad and Tobago, and reinsurance. The 6% tax is collected from policyholders and paid over to the Board of Inland Revenue by the insurance company.
Social security taxes/There is a social security tax, referred to as national insurance, which is deducted at source at vary
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