Corporate tax in St. Kitts & Nevis for outside sales

[dav19e]

Hi everyone,

I am new to the forum, and I'm enjoying my reading so far! Therefore, I have a question for you.

Apparently, On December 28th of 2018 Nevis passed a law that amended the tax-free exemptions of Companies formed after January 1, 2019. For LLC’s this was codified in the Nevis Limited Liability Company (Amendment) Ordinance 2018. This legislation stripped future LLC’s from having tax exemption compared to domestic companies to comply with the EU demands. This means that any company founded in Nevis after January 1, 2019 would be subject to a 33% tax on all profits. As I couldn't find much information online or that what I have found appeared to be really confusing to me, then my question is the following; Knowing that I am a Canadian citizen, Is my Nevis LLC subject to pay corporate tax if it ONLY generates outcome outside of St. Kitts & Nevis?

Thanks in advance!

 

[Sols]

While offshore structures can have uses for asset protections, as you mentioned in your other thread, you are focusing on the wrong piece of the puzzle. By being owned/controlled by a Canadian resident, the company itself also tax resident in Canada and owes full Canadian corporate tax.

Nevis, like many of its Caribbean cousins, rushed to implement laws so they could avoid EU blacklisting. They have over-corrected and are in the process of moving towards a territorial tax system (such as the systems that made Hong Kong and Panama popular) in the next year or two. Until then, consult with a local tax adviser about tax burden in Nevis. But that doesn't change the fact that the CRA will want their share of your company's profits.

 

[dav19e]

While offshore structures can have uses for asset protections, as you mentioned in your other thread, you are focusing on the wrong piece of the puzzle. By being owned/controlled by a Canadian resident, the company itself also tax resident in Canada and owes full Canadian corporate tax.

Nevis, like many of its Caribbean cousins, rushed to implement laws so they could avoid EU blacklisting. They have over-corrected and are in the process of moving towards a territorial tax system (such as the systems that made Hong Kong and Panama popular) in the next year or two. Until then, consult with a local tax adviser about tax burden in Nevis. But that doesn't change the fact that the CRA will want their share of your company's profits.

Hi Sols, thanks for your prompt reply.

After consulting an offshore lawyer I was told that I would need to pay Canadian corporate taxes if I were to transfer funds to my Canadian holding corp. which I totally understand. So my question is; am I subject to Nevis corporate income taxes if I intend to hold the profits in my Nevis LLC/Bank account? Once again, my company does not engage in any activity in St. Kitts & Nevis.

I'm asking because I'm flying over to St. Kitts & Nevis for the sole purpose of forming a Nevis LLC & Trust. Besides asset protection, I wouldn't want to pay local St. Kitts & Nevis corporate income taxes if I can get a much better corporate income tax rates here in Canada. You most likely know more than me in that regard. I'm just trying to put all the pieces together here.

Thanks a bunch, David

 

[Sols]

After consulting an offshore lawyer I was told that I would need to pay Canadian corporate taxes if I were to transfer funds to my Canadian holding corp. which I totally understand.

Speak with a Canadian tax lawyer, because the one you spoke to so far is probably wrong.

Canadian tax law is pretty simple - and aggressive. If a company is controlled or managed from within Canada, it's tax resident in Canada. A company tax resident in Canada must pay Canadian corporate tax.

 

[dav19e]

Speak with a Canadian tax lawyer, because the one you spoke to so far is probably wrong.

Canadian tax law is pretty simple - and aggressive. If a company is controlled or managed from within Canada, it's tax resident in Canada. A company tax resident in Canada must pay Canadian corporate tax.

Thanks for your advice Sols. I appreciate it.

David