Overview of Tax Compliance, Accounting, and Audit in Anguilla
Anguilla is a preferred destination for high net-worth investors as it is an attractive tax haven. The benefit Anguilla offers is that there is no direct tax, no income tax, capital gains tax, gift tax, net-worth tax, inheritance tax, or corporate tax. Apart from this, an international company is granted 50 years concession period during which they are not liable to pay taxes. Anguilla is gaining popularity as it has a reliable reputation, an easy and quick company registration process, and tax neutrality. The country generates revenue from two areas of activity i.e., offshore business registration and maintenance and tourism. To avail the benefits of the tax benefits, one has to invest in a government-approved program, stay for a minimum of 45 days in Anguilla each year and establish genuine links in the country, etc. On fulfilling these conditions, one can become a resident of Anguilla within three months. Offshore companies are required to maintain accounting records to reflect the company’s financial position. Such accounting records should be produced as and when requested by the inspection authorities.
Goods and Services Tax (GST)
GST is a tax levied on the consumption of goods and services. It is imposed on the value of imports, value-added on goods and services supplied within the country by GST-registered businesses. The GST amount is added to the price of the goods at the time of sale or supply of goods and services. The GST so collected by the businesses is remitted to the Government of Anguilla on the 20th day of the succeeding month. GST is applicable at the rate of 13%. GST registration is mandatory where the annual gross sales is EC$300,000. The GST registration should be done within 15 days from the date of becoming liable to register. There are three types of GST Registration:
On meeting the threshold requirement, the GST registration becomes mandatory and it should be done within 15 days from the date of annual gross sales is EC$ 300,000.
If you do not meet the threshold requirement but still want to register then an application has to be made to the Comptroller of Inland Revenue Department (IRD) for consideration of the application for registration. The Comptroller may accept or reject the application depending upon the ability to maintain records amongst other things.
If you meet the threshold requirement but fail to make GST registration then you may be registered from the date as may be determined by the Comptroller which can be the beginning of any period during which the taxable activity was discovered.
Property Tax is imposed on Property bills issued annually. Property tax can be discharged in two instalments i.e., by 1st June and by 1st December of each year. If one did not receive a bill, then it can be obtained from the IRD. It is paid annually at the rate of 0.75% of the value of the land. Immovable property buyers pay tax at the rate of 5%. Foreign immovable property buyers pay a tax at the rate of 12.5%.
A stamp duty ranging from 0.01% to 5% is levied on necessary papers that provide evidence of a contractual relationship.
Universal Social Levy (USL)
USL is a 3% levy on the gross salary or wages of all employees earning more than EC$2000 per month. The employer has to match with the 3% levy of the employee’s amount of remuneration or payment of an amount not exceeding EC$12000 of the employee’s monthly salary. Self-employed persons are required to pay USL at the rate of 6% on gross earnings exceeding EC$2000 per month. Employers and self-employed persons are liable to file USL for employees or self-employed persons whose salary is less than EC$2000 per month. On failure to file a return, a penalty of EC$ 50 per day up to a maximum of EC$2000 per month is levied. An interest rate of 1% per month applies to amounts outstanding. Despite this, if the employer or self-employed person does not file a return when required by the IRD then they are declared guilty of an offense, and a summary conviction or a fine is imposed.
Money Transmission Levy
A Money Transmission Levy is a 2% levy on the amount of funds transmitted outside of Anguilla. A Money Service Business Licensee holding a “Class A” license under the Money Services Business Act charges the Money Transmission Levy. They are authorized by the Money Transmission Act of 2021 to collect the levy from their customers on each applicable transaction.
Accounting and Auditing
Companies incorporated in Anguilla have to maintain accounting records to depict the company’s financial position. The accounting records and the source necessary papers must be stored in the registered office in Anguilla. If the records are kept outside Anguilla, then a record of its actual location must be present. There is no mandate to hold annual general meetings so meetings can take place at any time and at any place across the globe including telephonic meetings or meetings by other modes of electronic communication. There is no mandate to file the financial statements so there is no deadline. Further, there is no requirement to conduct an audit of financial statements.