Trinidad and Tobago

Information on Residency for tax purposes

Criteria for Individuals to be considered a tax resident

The term resident is not defined in the Income Tax Act (ITA). However, § (5) of the ITA is referred to as "Charging Provisions" which states

§ (5) (1) "Income tax shall, subject to the provisions of this Act, be payable at the rate or rates specified hereafter for each year of income upon the income of any person accruing in or derived from Trinidad and Tobago or elsewhere, and whether received in Trinidad and Tobago....."

§ (5) (2) states: - "In the case of income arising outside Trinidad and Tobago to a person who is not ordinarily resident or not domiciled therein, tax shall be payable on the amount received in Trinidad and Tobago, so however, that where any employment or office is exercised by any such person in Trinidad and Tobago, gains or profits from the employment or office, whether received in Trinidad and Tobago or not, shall be treated as income arising therein."
http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.01.pdf

It follows that individuals who are ordinary resident or domicile in Trinidad and Tobago are considered tax residents in Trinidad and Tobago.

§ (47) "Tax shall not be payable in respect of any income arising outside Trinidad and Tobago of any person who is in Trinidad and Tobago for some temporary purpose only and not with any intent to establish his residence therein and who has not actually resided in Trinidad and Tobago at one or more times for a period equal in the whole to six months of the year of income."

Countries with whom double tax treaties are agreed, usually addresses the term "resident of a Contracting State" which means any person who, under the law of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature."

In cases where such individuals also have a permanent home available to them in another country, they shall be deemed to be residents in Trinidad and Tobago if they have their centre of vital interest in the national territory.

Residents of Trinidad and Tobago are subject to tax on their worldwide income, this means that they are subject to taxes on both the income earned in Trinidad and Tobago as well as income arising outside of Trinidad and Tobago.

However, temporary residents are not subject to tax relating to income arising out of Trinidad and Tobago. This is defined by § 47 of the Income Tax Act Chapter 75:01 which states the following:

"Tax shall not be payable in respect of any income arising outside Trinidad and Tobago of any person who is in Trinidad and Tobago for some temporary purpose only and not with any intent to establish his residence therein and who has not actually resided in Trinidad and Tobago at one or more times for a period equal in the whole to six months of the year of income."

As such, persons will therefore be considered resident for lax purposes if they are in Trinidad and Tobago for a period in excess of six months.

The interpretation section of the Income Tax Act Chapter 75:01 defines a person as inclusive of a company. The interpretation section of the Corporation Fax Ad Chapter 75:02 defines "company" as; "means any body corporate or unincorporated association, but does not include a partnership."

Although the laws of Trinidad and Tobago does not treat partnerships as taxable residents, the partners of a partnership are taxed as individuals based on their residency.

The Income Tax Act s.59 provides that trustees are charged to tax on the income derived from trusts. Trustees are obliged to include trust income on their personal income tax returns, which do not require disclosure of identity information of the settlors and beneficiaries of the trust.

Further guidance regarding these provisions are available via the following links:

Income Tax Act Chapter 75:01 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.01.pdf

Corporation Tax Act Chapter 75:02 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.02.pdf

Criteria for Entities to be considered a tax resident

The interpretation section of the Income Tax Act Chapter 75:01 defines a person as:

"persort" includes a company."

The interpretation section of the Corporation Tax Act Chapter 75;02 defines a company as as any body corporate or unincorporated association, but does not include a partnership."

As a general rule, an entity is deemed to be a tax resident in Trinidad and Tobago when it is controlled in Trinidad and Tobago whether it is incorporated in Trinidad and Tobago or is incorporated elsewhere but has its mind and management situated in Trinidad and Tobago. This is emphasized under § (8) of the Corporation Tax Act Chapter 75:02 which states:

"For the purposes of the definition of "resident company" and "non-resident company", the place when; such a company is to be regarded as controlled is the place where the mind or management of the company is ordinarily situated."

The Corporation Tax Act Chapter 75:02 defines a resident and non- resident company as:

"resident company" means a company that is controlled in Trinidad and Tobago, whether or not the company is

  1. incorporated in Trinidad and Tobago; or
  2. engaged in trade or business or in the pursuit of professional or vocational activities in Trinidad and Tobago;

"non-resident company- means a company not controlled in Trinidad and Tango, whether or not the company is

  1. incorporated in Trinidad and Tobago; or
  2. engaged in trade or business or in the pursuit of professional or vocational activities in Trinidad and Tobago;

Trusts are not taxable entities in Trinidad and Tobago. As such, trusts are not required to register with the Board of Inland Revenue for a B.1.R_ file number. The Income Tax Act 5.59 provides that trustees are charged to tax on the income derived from trusts. Trustees are obliged to include trust income on their personal income tax returns, which do not require disclosure of identity information of the settlors and beneficiaries of the trust.

Further guidance regarding these provisions are available via the following links:

Income Tax Act Chapter 75:01 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.01.pdf

Corporation Tax Act Chapter 75:02 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.02.pdf

Entity types that are as a rule not considered tax residents

The laws of Trinidad and Tobago treats a company as a person but a partnership is not considered as such for income tax purposes and is therefore treated as fiscally transparent.

The Income Tax Act Chapter 75:01 and the Corporation Tax Act Chapter 75:02 does not have a general rule for deeming entities as non-tax residents. Strictly speaking, an entity would be cleaned a non-tax resident if the legislative requirements as outlined in section li are not met.

Where residency cannot be clearly determined via the legislation, consideration is given to International Law and decided lax cases to determine such.

Trusts are not taxable entities in Trinidad and Tobago, As such, trusts are not rNuired to register with the Board of Inland Revenue for a B.I.R. file number. The Income 7hr Act 5.59 provides that trustees are charged to tax on the income derived from trusts. Trustees are obliged to include trust income on their personal income tax returns, which do not require disclosure of identity information of the seniors and beneficiaries of the trust.

Section (8) (1) of the Income Tax Act and Section (6) (1) of the Corporation Tax Act provides for exemptions. Although, specific entities are exempt from taxation, companies are still obligated to be registered with the BIR. and required to file annual returns.

Income Tax Act Chapter 75:01 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.01.pdf

Corporation Tax Act Chapter 75:02 - http://rgd.legalaffairs.gov.tt/Laws2/Alphabetical_List/lawspdfs/75.02.pdf

Contact for further information

For further information please address enquires to

birchair@ird.gov.tt or birchair@ird.gov.tt.

Response date 2018-05-23 (yyyy-mm-dd)