We hereby attach the new legislation enacted in SVG at the beg | Law&Trust, legal practice and experience

We hereby attach the new legislation enacted in SVG at the beginning of 2021.

Please see the following message from the SVG FSA:

We write to formally advise that on Monday December 28, 2020, the Income Tax (Amendment) Act 2020 was passed/enacted, which introduces a system of territorial taxation in St. Vincent and the Grenadines, whereby specified companies, namely, companies incorporated or registered under the Companies Act or registered under the Business Companies (Amendment and Consolidation) Act and trusts registered under the Trusts Act would benefit from tax exemptions or zero rated taxation on global income. It is anticipated that this legislative change may lead to the stabilization, survival and possible growth of St. Vincent and the Grenadines’ international financial services sector, the economic international climate permitting. Taxation on worldwide income for all other tax payers, including individuals and non-residents, has been retained.

The International Tax Cooperation (Economic Substance) Act was also simultaneously enacted to introduce the necessary economic substance requirements on geographically mobile activities, referred to as ‘relevant activities,’ to ensure compliance with international tax criteria. Companies carrying out nine (9) categories of relevant activities, namely, banking business, insurance business, fund management business, finance and leasing business, holding entity business, distribution and service centre business, headquarters business, intellectual property holding business, holding entity business and shipping business, will be obliged to fulfil economic substance requirements, unless excluded under the provisions of the Act. Further Guidance and Regulations will be issued to provide clarity on the implementation of these laws in St. Vincent and the Grenadines.

It is to be noted that both of these laws will come into force on Jan 1st 2021, however, the laws will be applicable to the grandfathered IBCs and Trusts on July 1st, 2021.