nd Tobago, the income accruing or derived from the activity is subject to tax. Tax is not payable on the external income of a person who is in Trinidad and Tobago for some temporary purpose and with no intention of establishing residence. A nonresident income subject to tax includes income arising directly or indirectly through an agency or branch.
16. Rates
Nonresident individuals and corporations are taxed on their Trinidad and Tobago source income at the same rates as resident individuals or corporations. However, nonresident corporations are subject to withholding tax on profits remitted or deemed to be remitted abroad.
17. Withholding Tax Rates
Withholding tax is applicable when remittances are being made to nonresidents in respect of dividends, other distributions, branch profits (net of corporation tax and reinvestment), interest and royalties, etc.
18. Special Withholding Provisions
Branch profits, net of tax and reinvestment, are subject to withholding tax at a rate of 10% (except the applicable rate for Canada is 5%).
19. Tax Treaties
Trinidad and Tobago have tax treaties reducing the withholding tax rates with the following countries.
Dividends Interest Royalties
Nontreaty countries 10%, 15% (1) 20% 20%
Treaty countries:
Canada 15 15 15, 20 (2)(3)
Denmark 10, 15 (4) 15 15, 20 (2)(3)
France 10, 15 (5) 10 (6) 10, 20 (2)(3)
Germany 10, 15 (4 10, 15 (6)(7) 10, 20 (2)(3)
Italy 10, 15 (4) 10 (6) 5, 20 (2)(3)
Norway 10, 15 (4) 15 15, 20 (2)(3)
Sweden 10, 15 (4) 10, 15 (7) 20, 20 (2)(3)
Switzerland 10, 15 (5) 10 10, 20 (2)(3)
United Kingdom 10, 15 (4) 10 (6) 10, 20 (2)(3)
United States 10, 15 (5) 15, 20 (7) 15, 20 (2)(3)
Venezuela (8)
____________
Notes:
(1) The lesser rate applies if the recipient is the parent company.
(2) The lesser rate applies to patent royalties. Royalty payments
in respect of production or reproduction of literary works (excluding motion pictures and films and video tapes for use in connection with television or radio) are exempt from tax.
(3) The higher rates apply to royalties paid in respect of the operations of mines or quarries or the extraction of mineral resources.
(4) The lesser rate applies if the recipient company controls 25% or more of the voting power.
(5) The lesser rate applies if the recipient company controls 10% of more of the voting power.
(6) No tax is payable on interest paid to a governmental
institutional or agency in France, Germany, Italy, Sweden, or the United States.
(7) The lesser rate also applies to interest paid to a bank; the higher rate applies in all other cases.
(8) The profits derived from the business of air transport are exempt from tax.
OTHER SIGNIFICANT TAXES
21. Sales (Value-Added) Taxes
Value-added tax (VAT) at 15% is payable by registered persons on the value of goods and services supplied. VAT also is payable on imports of goods. Certain basic foods, exports, and certain services supplied to nonresidents are taxed at 0%. Registered persons can recover VAT paid on inputs, including capital expenditure. The effect is that the tax is borne by the ultimate consumer. Generally, persons making taxable
supplies of less than TT$150,000 annually are not required to be registered.
Certain transactions, such as insurance, certain banking services, stock brokerage, education, and medical and dental services, are exempt from VAT. The tax does not apply to the sale or tran
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