The Trinidad and Tobago Ministry of Trade and Industry recently published an updated guide on the Grants and Incentives available in the country. The main incentives are summarized in the guide as follows:
Import Duty Concessions
Import duty concessions are granted to manufacturing and processing companies in Trinidad and Tobago. Import duty concessions allow such companies to receive exemptions on import/customs duties for items that they import for their manufacturing or processing needs.
- The company must be incorporated in Trinidad and Tobago;
- The company must be VAT and BIR registered;
- Part of the production of the final output must be done locally.
Concessions on raw materials, machinery, equipment and packaging material, as outlined in Third Schedule of the Customs Act, Chapter 78:01.
The Fiscal Incentives Module enables companies resident in Trinidad and Tobago to apply for approved enterprise status for its products and/or services. Fiscal incentives are benefits granted to qualifying enterprises.
To qualify for fiscal incentives, a company must:
- Be resident in Trinidad and Tobago
- Have capital investment in excess of TT$50 million
- Be engaged in an approved manufacturing or processing industry in accordance with the Fiscal Incentives Act
- Contribute towards the Trinidad and Tobago economy in terms of employment, linkages and investment.
Fiscal incentives allow approved enterprises to enjoy:
- Exemption from customs duties
- Exemption from Value Added Tax (VAT)
- Exemption from income tax on dividends or other distribution, other than interest, out of profits or gains derived from the manufacture of the approved product during the tax holiday period.
Construction of Multi-storey Car Parks and Commercial Buildings
To incentivize the private sector, income tax concessions for the construction of multi-storey car parks and commercial buildings are provided under section 45D (1) (a) and (b) of the Income Tax Act, Chapter 75:01 (as amended).
Applicants must meet the following eligibility criteria:
- The construction of the commercial building or multi-storey car park must commence on or after October 1, 2012
- The letting or initial sale of the completed commercial building or multi-storey car park must commence on or after October 1, 2012
- The commercial building or multi-storey car park must satisfy the requirements for development planning standards.
This incentive provides as follows:
- Section 45D (1) (a) of the Income Tax Act, Chapter 75:01 grants an exemption from income tax until December 31, 2025 with respect to premiums and rents derived from the letting of a newly-constructed commercial building or multi-storey car park, the construction of which commenced on or after October 1, 2012
- Section 45D (1) (b) of the Income Tax Act, Chapter 75:01 grants an exemption from income tax until December 31, 2025 with respect to gains or profits from the initial sale of a newly-constructed commercial building or multi-storey car park, the construction of which commenced on or after October 1, 2012.
Junior Stock Market
The Small and Medium-Sized Enterprises (SME) Market or Junior Stock Market was introduced in 2012 to further develop the local capital market to promote economic diversification. It is aligned with the vision of The Trinidad and Tobago Stock Exchange (TTSE) whereby, SME'S are afforded the opportunity to raise capital on the domestic stock market via an alternative source of financing for capital expansion for such businesses.
Companies desirous of listing on the Junior Stock Market must meet the following eligibility criteria:
- The issuer must be incorporated with limited liability in Trinidad and Tobago or in any other CARICOM country;
- The issuer may qualify to be listed provided that it has never been listed on any market of TTSE or on any other Exchange; and
- The issuer must not be an associate or a subsidiary of a company listed on any market of the TTSE or on any other Exchange.
To be listed on the Junior Stock Market SMEs must:
- Be registered under the appropriate legislation;
- Prepare the Offering Document/Prospectus;
- Submit an application to the TTSE; and
- Appoint a Mentor.
Companies will also benefit from the following incentives by listing on the Junior Stock Market:
- Zero percent Corporation Tax, Green Fund and Business Levy for the first five (5) years of listing on the TTSE, i.e. applicable for Year1 through Year 5; and
- Fifty percent reduction on Corporation Tax, Green Fund and Business Levy for the next five (5) years from listing on the TTSE, i.e. applicable for Year 6 through Year 10.
In addition to the above mentioned tax incentives and to ease the operational burden of listing, the Government in collaboration with the Central Bank of Trinidad and Tobago (CBTT) and the Trinidad and Tobago Stock Exchange (TTSE) has also implemented a Mentorship Programme for SMEs. This Programme provides the necessary support to SMEs and seeks to address issues associated with insufficient documentation, as well as ensuring adherence to compliance and corporate governance standards.