Here on St Barts island, we have nex taxes to look forward to in 2008; Happy New Year to us!
The island’s territorial council met on November 13th and voted 19-1 in favor of a new financial code, amidst 100 or so people that came to hear the discussion. So, what happened? Well, new indirect taxes were approved for starters, some surprising, others not so much.
A new tourist tax was put in place, which was expected and probably the least surprising event of the evening. If you’re coming to stay for a visit, expect to pay 5% per night in tourist tax. Even though the hotel owners have suggested the tax for several years now, the St Barts Tourism Office is complaining that they have to collect the tax from their guests or face a fine for not doing so. You can read an article (in French) about it here.
Import taxes were raised from 4% to 5% – the first increase in 25 years. Another new tax that will affect business owners is the annual fixed tax. Set at 300 euros for small businesses and increased by 100 euros per employee, capped at 5000 euros. I’m not sure what qualifies as a “small business” though.
A capital gains tax on real estate was set at 25% of the profit realized and donations of property between family members will not be taxed, on the condition that they hold on to the property for 10 years or more. If they don’t keep it for 10 years, they will pay the 25% tax on the value of the gift. Donations outside of the family carry a hefty tax of 40%.
What I found to be the most interesting part of the evening though was the established definition of “fiscal residence.” It is now much easier to obtain as you must only live on the island for 5 years, not 5 continuous years. This is good for those who commute to St Barts on a regular basis.
Really, it boils down to the fact that someone has to come up with the money to pay for the island’s budget. Being “tax-free” is really just an illusion; for every item you purchase tax-free, there is a service on the island that is being taxed instead.
