VAT IN TRINIDAD AND TOBAGO
Robley Baynes Tax & Accounting Services
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In Trinidad and Tobago, Value Added Tax (VAT) is a tax on goods and services. VAT is added from the initial production of goods and services to the point of sale. The amount of VAT the user pays is based on the cost of the product minus any costs of materials that were taxed at a previous stage.?
Understanding VAT
A value-added tax is a tax that is added to goods and services at every level of the supply chain. The tax is usually passed on to the consumer or end-user. It is based on consumption rather than income. In contrast to a progressive income tax, which levies more taxes on the wealthy, VAT is charged equally on every purchase.
VAT is levied on the gross margin at each point in the process of manufacturing, distributing, and selling an item. The tax is assessed and collected at each stage. That is different from a sales tax system, in which the tax is assessed and paid only by the consumer at the very end of the supply chain.
Types of VAT
Here are some key details about VAT in Trinidad and Tobago:
Standard Rate: The standard VAT rate is 12.5%. This rate applies to most goods and services.
Zero-Rated Goods and Services: Some items are zero-rated, meaning they are taxable but at a rate of 0%. Examples include basic food items, certain medical supplies, and exports.
Exempt Goods and Services: Certain goods and services are exempt from VAT, meaning no VAT is charged. These include financial services, educational services, and real estate transactions.
Registration Threshold: Businesses with an annual taxable turnover exceeding TTD 600,000 are required to register for VAT.
Filing and Payment: VAT returns must be filed, and any VAT due must be paid, on a monthly basis. Returns are due by the 25th day of the following month.
VAT Refunds: If a business's input tax (VAT paid on purchases) exceeds its output tax (VAT charged on sales), it may be eligible for a VAT refund.
VAT Filing Periods
The period covered by the VAT Return is referred to as the tax period. The standard tax period is two (2) months. Persons registered for VAT are required to submit a return and remit VAT due for each two-month period. Each return is due on or before the 25th day of the month following the end of the tax period. There are two categories for the two-month period.
Category A: tax periods ends on the last day of January, March, May, July, September and November
Category B: tax periods ends on the last day of February, April, June, August, October and December
VAT Services at Robley Baynes
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Contact us today to get started via call 1868 293-1508 or email [email protected] or you can visit any one of our local offices which are situated in both Trinidad and Tobago at the following addresses : Trinidad Office: 52 Penco Street, West Lange Park, Chaguanas and Tobago Office: Unit 12 Milford Bay Plaza, Crown Point.