Tax Status of corporations incorporated under the Nevis Business Corporation Ordinance and the Nevis Limited Liability Company Ordinance
Positive tax news out of Nevis. Finally there is some news regarding taxation in Nevis, and the news are seemingly very good.
As a part of our long-term commitment to keeping you informed about all legislative changes in the Island of Nevis and worldwide, we would like you to take note of the following information.
The Nevis Island Administration has received a firm commitment from the Federal Government that it will amend the Income Tax Act, Cap 20.22 by September 2020 to provide a clear definition of tax residency which is based on central management and control.
Corporations and companies (entities) that have central management and control in the Federation of St. Kitts and Nevis will be subjected to Corporate Income Tax on their worldwide income.
If an entity does not have central management and control but is operating as a Permanent Establishment (PE) in accordance with the guidelines of the OECD Model Tax Convention then that entity will be liable to pay Corporate Income Tax on income generated within or remitted to the Federation.
If an entity has neither central management and control nor a PE, that entity is not liable to pay taxes in the Federation. If it is not liable to pay taxes to the Federation it does not require a tax number. “That would apply to over 99% of companies formed in Nevis,” according to KW Wessell, a leading offshore incorporation specialist. “U.S. people, however, are subject to tax on their worldwide income,” he adds.
The NIA, as an interim measure while we await the completion of the amendment to the Income Tax Act and the development of the Simplified Tax Return for the reporting of taxable income, has decided to defer the filing and payment of Corporate Income and Withholding Taxes which would have become due and payable on April 15, 2020.
Further communications will be issued following the finalization of these two matters.
All entities registered under the NBCO and the NLLCO must remain in good standing with the Financial Services Regulatory Commission – Nevis Branch, having paid all applicable annual renewal and licensing fees at the due and payable dates.
We would also like to draw your attention to the fact that more complex structures such as Trusts will remain zero tax vehicles into the foreseeable future, so we would gladly provide a consulting to you with regards to the possibility of changing corporate structures into trusts, and other relatable questions.