Tax incentives are available under the following legislations:
Under this regime an exemption from taxes is granted for a maximum period of 15 years to manufacturers of an ‘approved product’. Post the expiration of the exemption period, relief may be obtained by way of tax credits of up to 50% of corporate income tax paid on profits derived from certain export sales.
An IBC is an entity incorporated under the IBC Act for the purpose of carrying on international trade or business. Effective from 31 December 2018, the tax exemptions for IBCs have been withdrawn and IBCs became subject to tax at the general corporate income tax rate (see Sec. 8.1.1.).
Previously, an IBC was exempt from the payment of corporate income tax, sales tax or withholding tax on payments to non-residents. The exemption was guaranteed by the Government for periods ranging from 20 to 50 years (see Sec. 1.2.3.). Further, the Antigua International Trusts were not subject to any local income taxes, or tax on any capital assets, any estate tax, inheritance tax, gift tax, or taxes on gain and appreciation on any assets or dividends, and tax on interest paid by the International Trust on behalf of a non-resident of Antigua and Barbuda. These trusts were exempted from tax for a period of 20 years from the date of incorporation of the IBC.
Under this regime incentives are provided to residents and non-residents for promoting investment opportunities in Antigua and Barbuda. Incentives and concessions are available in respect of the following:
- Exemption from the payment of customs duty;
- Exemption from corporate income tax;
- Reduction of stamp duty; and
- Exemption from withholding tax.
The amount of the incentives and concessions depend on the amount of the investment and the number of employees in the proposed business.
In 2018, the incentives provided under the Tourism and Business (Special Incentive) Act 2013 were discontinued and the government is currently reviewing the concession regime.
Previously, under this regime incentives were provided in the areas of tourism industry and other specified business activities for a period of 2 years in relation to exemption from custom duties, income tax, ABST, reduction in stamp duty etc. The amount of incentive would depend on the amount of investment in tourism business.
The entrepreneurial development program includes various generous tax concessions such as tax waivers on importation of material and capital equipment and applicable corporate tax holidays and is funded through the levy of a telecommunications tax.
Under this regime, approved small businesses registered under the Small Business Development Act, 2007 are eligible to apply for one or more of the following concessions:
- Exemption/ reduction of corporate income tax for a period not exceeding 5 years and thereafter a 10% exemption for a specified period;
- Exemption/ reduction from payment of customs duty on specified imports for use in operation of the business;
- Withholding tax exemption/ reduction for a period of up to 3 years from the grant of the concession;
- Reduction of property tax of up to 75% in respect of land and buildings used in the operation of the business; and
- Exemption/ reduction from payment of required stamp duty on specified transactions.
The concession in the tax amount and the time period for the concession are based on the Minister’s approval.