TAX CONCESSIONS GRANTED TO RETURNING NATIONALS
Returning to reside permanently in Trinidad & Tobago? Well, there is good news for you!!
In 1994, Government in an attempt to encourage nationals to return home took a decision to grant tax concessions on a motor vehicle and household effects imported by such persons. The following is a summary of benefits to which a returning national is entitled.
MOTOR VEHICLES(UNDER THE MOTOR VEHICLES AND ROAD TRAFFIC ACT CHAPTER 48:50 A “MOTOR CYCLE” IS CONSIDERED A MOTOR VEHICLE)
In accordance with Section 45A of the Customs Act (Chap. 78:01) to qualify for any relief of taxes, the person must satisfy all of the following conditions:
i. The person must be eighteen(18)years old and over; and
ii. Is or was a citizen of Trinidad & Tobago;
iii. Has citizenship of two (2) countries, one of which is Trinidad & Tobago; or
iv. Is the spouse of a person referred to in sub-paragraphs (i) or (ii) above;
v. Has obtained from the Minister to whom responsibility for trade is assigned, a licence to import such vehicle in accordance with the Trade Ordinance;
vi. Must have resided abroad for a continuous period of at least five (5)years immediately prior to his return to Trinidad & Tobago;
vii. Intends to reside in Trinidad & Tobago permanently;
viii. The person acquired the motor vehicle abroad;
ix. The person is the registered owner of the vehicle prior to his return to Trinidad & Tobago and imports the motor vehicle six (6) months before orwithin one(1) year after his return to Trinidad and Tobago;
x. Requires the vehicle for his personal use;
xi. Provides proof of ownership of the motor vehicle;
xii. Must not sell or transfer the vehicle within two (2) years of its importation;
RELIEF FROM CUSTOMS DUTIES
In accordance with Section 45A(1) and (2) of the Customs Act (Chap. 78:01), the Returning National is entitled to full relief of Customs Duty.
RELIEF FROM VALUE ADDED TAX(VAT)
In accordance with Legal Notice No. 75 of 2013 the Returning National is entitled to full relief of Value Added Tax(VAT).
RELIEF FROM MOTOR VEHICLE TAX (MVT)
For the purposes of relief from Motor Vehicle Tax (MVT), the vehicle must be of a class or description as detailed in Item 1 in Part I Appendix A of the fourth Schedule of the Motor Vehicles and Road Traffic Act, Chapter 48:50 which is “private motor cars or rental cars, station wagons or estate wagons. In this regard, the Returning National receives full relief fromMotor Vehicle Tax.
THE CONCESSION GRANTED TO A RETURNING NATIONAL FOR THE IMPORTATION OF A MOTOR VEHICLE IS AONE(1) TIME FACILITY. IF THERE IS A TRANSFER OF OWNERSHIP OF THE MOTOR VEHICLE WITH IN TWO(2) YEARS OF THE DATE OF IMPORTATION THE RETURNING NATIONAL WILL THEN IMMEDIATELY PAY THE CUSTOMS DUTY WHICH WOULD HAVE BEEN PAYABLE HAD THE RELIEF NOT BEEN GRANTED.
There are two categories of household effects:
(a) Items, which are in the use and possession of the passenger for at least one (1) year – No duties and taxes are payable. Any passenger can benefit from this measure, in accordance with item 6(b) of the Second Schedule.
(b) Items which are owned by a returning national residing abroad for at least five (5) years. Conditions for exemption from duties and taxes on household effects for a returning national are summarized below:
i. Must have resided abroad continuously for at least five (5) years and returning home to reside permanently, in accordance with item 6(c) of the Second Schedule;
ii. The household effects are for his personal use and not for sale or exchange;
iii. The household effects must be imported within two (2) months before or after the arrival of the returning national or such further period as the Comptroller of Customs and Excise may allow in any special circumstances in accordance with item 6(d) of the Second Schedule;
iv. Exemptions apply to one householder per family.
Definition of Household Effects:
The term ‘household effects’ shall include items as air conditioning units, bedding, carpets, clocks, crockery, glassware, cutlery, electrical fans, furniture, record players, household electrical appliances, irons, kitchen and other domestic utensils, lamps, lanterns, household linen, perambulators, pianos, pictures, sewing machines, silver and plated ware, stoves and electrical cooking and heating apparatus, tape recorders, lap-top computers and other like articles.
*Motor vehicles, building materials, and foodstuff are excluded.*
(B) RELIEF FROM CUSTOMS DUTIES AND TAXES
Full relief of Customs Duty and VAT is granted to household effects of a Cost, Insurance and Freight (CIF) value not exceed two hundred and fifty thousand dollars ($250,000.00TT). However, where the CIF value exceeds two hundred and fifty thousand dollars ($250,000.00TT), the goods allocated to the excess will attract the respective rates of customs duties and VAT plus ten percent (10%) in Special Tax.
In order to benefit from tax concessions, the Returning National needs to:-
i. Provide proof of residence abroad, e.g. passport. employment records;
ii. Provide proof of ownership of vehicle, e.g. registration certificate;
iii. Provide an affidavit sworn before a local Commissioner;
iv. Present two (2) passport-size pictures;
v. Present a Customs Declaration Form in person and attest in writing that the legal requirements have been met.
*CONTINUOUS RESIDENCE ABROAD BY A RETURNING NATIONAL SHALL NOT BE AFFECTED BY TEMPORARY VISITS TO TRINIDAD AND TOBAGO FOR PERIODS NOT EXCEEDING THREE (3) MONTHS IN EACH OF THE FIVE (5) YEARS IMMEDIATELY PRIOR TO HIS RETURN TO TRINIDAD AND TOBAGO TO RESIDE PERMANENTLY.*
A licensed Customs Broker/Clerk will be required to prepare the Customs Entry.
After the Customs official accepts the Customs Entry, Customs Duty, Motor Vehicles Tax, VAT and Special Tax (Household effects) where it applies will be made payable to the Customs and Excise Division.
WARNING: Heavy penalties are imposed for false declarations.
The above generally describes the tax concessions from which a returning national may benefit, and are provided for general information. However, discussions in this article must not be substituted for law.