Barbuda's Tax Haven Status: What You Need To Know

Antigua and Barbuda is often referred to as a tax haven, but this is not strictly true. While the country does offer a favourable tax regime with moderate rates, it is more accurately described as a low-tax jurisdiction. This means that, while taxes are low, they are not non-existent. For example, the country has a corporate tax rate of 25% and a sales tax of 15%.

However, there are indeed some tax benefits to living or doing business in Antigua and Barbuda. There is no personal income tax, no capital gains tax, no inheritance tax, and no wealth tax. The country also offers tax residency programs that come with additional tax breaks.

Antigua and Barbuda's tax residency requirements

Antigua and Barbuda offers a range of benefits to its tax residents, including no income tax, capital gains tax, inheritance tax, or wealth tax on worldwide income or assets.

There are two ways to become a tax resident in Antigua and Barbuda:

• Spend more than 183 days in the country: This is the standard rule for establishing tax residency in most countries.
• Apply for permanent residency: This option is especially attractive to perpetual travellers as it only requires spending 30 days a year in the country.

Option 1: Spend more than 183 days in the country

This option is suitable if your job requires frequent travel. While you don't need to be a citizen, you cannot establish tax residency elsewhere.

Option 2: Apply for permanent residency

This option has the following requirements:

• Spend at least 30 days a year in Antigua and Barbuda
• Annual income above $100,000
• Pay a flat tax of $20,000 per annum
• Receive a certificate of residency and an Antigua Taxpayer Identification Number (TIN)

Benefits of tax residency:

• No income tax on worldwide income or assets
• No capital gains tax on worldwide income or assets
• No inheritance tax on worldwide income or assets
• No wealth tax on worldwide income or assets

Tax benefits for entrepreneurs

Antigua and Barbuda offers a range of tax benefits for entrepreneurs, creating a favourable environment for business ventures and investment opportunities. Here are some key tax advantages:

No Personal Income Tax

The country abolished personal income tax in 2016, meaning residents are not taxed on their personal income. This applies to both citizens and tax residents.

No Capital Gains Tax or Estate Taxes

Entrepreneurs can benefit from the absence of capital gains taxes and estate taxes. This allows them to retain and reinvest their profits more effectively.

Tax Breaks for Qualifying Companies

Antigua and Barbuda offers attractive tax breaks on qualifying companies' profits for up to 20 years. These incentives encourage business growth and investment.

Tax Holidays and Exemptions

The country provides certain tax holidays and exemptions on customs duties for qualifying companies, further reducing the tax burden on businesses.

No Wealth Tax

There is no wealth tax in Antigua and Barbuda, which means residents are not taxed on their worldwide income or assets.

Flat Tax for Permanent Residents

For those who obtain permanent residency, there is a flat tax of $20,000 per year. This option is particularly appealing for perpetual travellers or those who cannot spend 183 days a year in the country.

Tax Exemptions for Foreign Investors

Foreign investors in Antigua and Barbuda are eligible for tax exemptions, including exemptions on capital gains taxes, personal income taxes, and estate taxes. These exemptions encourage foreign investment and create a favourable business environment.

Corporate Tax Rate

The corporate tax rate in Antigua and Barbuda is 25%, which is relatively low compared to other jurisdictions.

Sales Tax Exemptions

Some goods and services are exempt from the standard 15% sales tax, including financial services, medical services, prescription medicines, educational services, and transportation.

Double Taxation Treaties

Antigua and Barbuda has double taxation treaties in place with several countries, helping to avoid double taxation for residents and citizens with income in multiple jurisdictions.

Overall, Antigua and Barbuda offers a highly favourable tax regime for entrepreneurs, with numerous tax benefits and incentives that make it an attractive destination for business ventures and investment opportunities.

Tax exemptions for foreign investors

Antigua and Barbuda is not a tax haven, but it has a progressive and moderate tax regime that offers many advantages for foreign investors. The country has a flat corporate tax rate of 25% for domestic companies, with no personal income tax, no capital gains tax, no inheritance tax, and no wealth tax.

Antigua and Barbuda offers numerous tax benefits to foreign investors, including:

• No personal income tax: In 2016, the government abolished personal income tax to attract foreign investment and compete with its Caribbean neighbours.
• No capital gains or inheritance taxes: There are no capital gains or inheritance taxes in Antigua and Barbuda, which can be attractive to investors looking to minimise their tax liabilities.
• No wealth tax: Antigua and Barbuda does not levy a wealth tax on individuals or businesses.
• Tax incentives for companies: The country offers friendly tax incentives for resident and non-resident companies, such as tax breaks on qualifying companies' profits for up to 20 years and certain tax holidays and exemptions on customs duties.
• Tax exemptions for International Business Companies (IBCs): Antigua and Barbuda IBCs are tax-exempt and require only one shareholder and one director, who can be the same person or entity. There is a 50-year tax exemption for IBCs, covering most forms of income, dividends, interest, and royalties paid by and to foreigners.
• Low sales tax: The standard sales tax rate is 15%, but it is reduced to 14% for hotels and restaurants and 0% for certain goods and services.
• Avoidance of double taxation: Antigua and Barbuda has no double taxation agreement with the United States, which can benefit American foreign investors.

To become a tax resident of Antigua and Barbuda, foreign investors can apply for permanent residency, which requires spending a minimum of 30 days per year in the country, having an annual income above $100,000, and paying a flat tax of $20,000 per year. Tax residency offers additional benefits, including no income tax, capital gains tax, inheritance tax, or wealth tax on worldwide income or assets.

Antigua and Barbuda's sales tax

Antigua and Barbuda Sales Tax

The Antigua and Barbuda Sales Tax (ABST) is a corporate tax levied on the selling price of goods and services. It is a value-added tax (VAT) that is ultimately paid by the consumer. The standard rate of this VAT is 15%, but there is a special rate of 14% for tourist businesses, such as hotels and restaurants. Certain goods and services are zero-rated, and some are exempt from this corporate tax, including financial services, medical services, prescription medicines, educational services, and transportation within Antigua and Barbuda.

To register to pay ABST, you must have an annual turnover of $300,000 XCD or more in taxable income. You must also register if you are a professional such as a lawyer, solicitor, accountant, auditor, architect, surveyor, or engineer.

The ABST is an indirect tax, included in the final price and collected from buyers when purchasing goods, services, or importing products at customs. It is an analogue of VAT.

The ABST is filed monthly, no later than the end of the month following the reporting month. For example, if the tax return is for September, the reporting must be submitted no later than October 31st.

The ABST rate is 15%. The rate is lower for hotels and restaurants at 14%. Some activities are taxed at 0%, including export, food supply, electricity, fuel, and water for domestic use.

A complete list of activities with tax rates can be found in the Antigua and Barbuda Sales Tax Act and Amendments.

Other Taxes in Antigua and Barbuda

While Antigua and Barbuda is not a tax-free country, it has a progressive and moderate tax regime that offers many advantages for expats. It is not considered a tax haven, but it does have a solid taxation structure that investors could find appealing.

Other taxes in Antigua and Barbuda include:

• Property taxes: Ranging from 0.1% to 0.5% of the market value of the property.
• Transfer tax: A 2.5% transfer tax, based on the property's market value, must be paid by non-residents to obtain an Alien Landholding License to legally conduct real estate transactions.
• Stamp duty: A stamp duty tax of 7.5% for the seller and 2.5% for the buyer, based on the property's purchasing value.
• Corporate tax: The corporate tax rate for domestic companies is 25%, with a branch tax rate of 25%.
• Social Security contributions: Public and private sector companies and their employees must make mandatory social security contributions. The social security tax rate is 14% for the private sector and 13% for the public sector.

Tax residency conclusion

Antigua and Barbuda offers a highly attractive package for those seeking to establish tax residency. The country's tax regime is moderate and favourable, with no personal income tax, no capital gains tax, no inheritance tax, and no wealth tax. This makes it a popular choice for investors and entrepreneurs, who can take advantage of the country's tax incentives and investment opportunities.

To become a tax resident, an individual must spend at least 183 days in the country during a tax year or apply for permanent residency, which requires spending a minimum of 30 days per year in the country and paying a flat tax of $20,000 per annum. The latter option is particularly appealing for perpetual travellers.

The country's corporate tax rate is 25%, and the sales tax rate is 15%, although certain goods and services are exempt, and there is a reduced rate for hotels and restaurants. There are also tax exemptions for foreign investors, including no capital gains tax, estate tax, or personal income tax.

Antigua and Barbuda has double taxation treaties in place with several countries, and it allows taxpayers to claim foreign tax credits for taxes paid to other jurisdictions. These measures encourage international business and investment, creating a favourable environment for economic growth.

Overall, the country's tax benefits, moderate tax regime, and attractive investment opportunities make it a compelling choice for those seeking to establish tax residency, especially in the Caribbean region.

Frequently asked questions