St Kitts’s 2016 Budget Responds To BEPS
The Caribbean territory Saint Kitts and Nevis has set out plans to amend the territory’s international tax rules in its 2016 Budget.
The Budget is said to target “the potential for abuse through the use of transfer pricing techniques,” which the Government said “not only affects the withholding tax regime but the income tax system as well.”
The Government announced: “For this reason, in 2016 the definition of transfer pricing expenses as outlined in the Income Tax Act will be revisited so that it is clear that such expenses would include royalties and recharges. Further, work will continue to find the best solutions to ensure a comprehensive update of the withholding tax and the income tax regimes to reflect current realities of corporate transactions and to fulfill our commitment to operate a tax regime that is based on modern legislation.”
The Government also announced plans to clarify tax allowances for branch and head office arrangements under the withholding tax regime.
The territory will receive support from technical experts from the International Monetary Fund and the Caribbean Technical Assistance Centre in 2016.