ALL CONTENT WAS WRITTEN AND SUBMITTED BY ANDREA RAGOO
Sole traders and entrepreneurs!
So you have your own business…that's great!
So all that you work for is yours…but wait… do you have any other obligations?
Any income earned, whether by salary or self-employment is subject to taxation under the laws of Trinidad & Tobago.
In any economy, taxation is the practice of a government collecting money from citizens based on their earnings and/or property. It is used to fund public services such as roads, health care and education.
Therefore, all residents have a responsibility to pay taxes.
So what is your responsibility as a self-employed individual?
TAX | RATE | FREQUENCY |
Income tax (on profits) | 25% up to $1m 30% over $1m | Annual |
NIS for employees (only if you have employees)
| As per NIS schedule | Monthly |
Health Surcharge | $429 | Annual |
VAT (if sales are over $500k annually) | 12.5% | Every other month (according to your assigned VAT period) |
Green fund levy (on gross sales) | 0.3% | Quarterly (Partnerships |
Business levy (if higher than income tax) | 0.6% | Quarterly |
Payment dates:
PAYE, NIS & Health Surcharge – 15th every month
Income Tax – 30th April (with the filing of the tax return)
Business Levy – last day of each quarter (Mar, June, Sep, Dec)
Corporation Tax – last day of each quarter (Mar, June, Sep, Dec)
Green Fund Levy – last day of each quarter (Mar, June, Sep, Dec)
VAT – 25th of every other month
N.B. For Sole Traders, Income tax is only paid if your income is over the $72,000 per year threshold.
For salaried/wage earning persons, who also have their own sole trader business, the total annual wage/salary must be added to the income earned from the business. This total income is what becomes chargeable for tax (less any relevant deductions). If this totals less than $72,000 per year, for example, then no income tax is payable.
Filing Date:
Filing your Income Tax return is done usually on April 30th (or the date specified by the Board of Inland Revenue).
P.S., If you registered and operated a business for any part of 2019, then filing is mandatory. (even if no transactions occurred and no money made)
Penalties and interest:
For not filing tax returns – sole traders and partnerships incur $100 every 6 months after the first 6 months; companies incur $1000.
Please note that all penalties relate to each period of filing returns. For instance, for a sole trader if income tax returns are not filed for 2017 (due in April 2018) then by October 2018 you would owe $100, by April 2019 you would owe $200 plus a penalty will start to accrue for missing another Tax Return filing date. So by October 2019 you would owe $300 (for the 2017 return) and $100 (for your 2018 return) a total of $400, for companies the penalty would be $4000 by that date.
For not filing VAT Returns – 8% of what was payable plus interest
Non-payment of taxes generally incur 25% penalty and 20% per annum interest until the amount is paid.
While getting a tax refund may seem like it's a good thing, a tax return is actually a 0% interest loan which you give to the government, instead of you having the money work for you - to reinvest in your business and generate more income.
We invite you to respond with questions after this article, so we can clear things up for you at the Board of Inland Revenue.
The Timely Entrepreneur Resource and Research Centre hosts ‘KNOW IT & FILE IT’, a complete Taxation Session to understanding your tax obligations AND a FILING POP-UP where you file your taxes on the spot with our accountant. Enjoy this one-time offer with great discount on filing charges.
SEE COSTS BELOW:
INVESTMENT IN ‘KNOW IT’ Session only - $350TTD
FILING YOUR TAX RETURNS POP-UP only ENTRY FEE - $100TTD
SESSION & FILING POP-UP - $350TTD
SOLE TRADER FILING FEE – TOTAL $1000TTD. Down-payment of $500TTD to be paid on day of pop-up and balance to be paid upon delivery of receipt.
PARTNERSHIP FILING FEE – TOTAL $1200TTD. Down-payment of $600TTD to be paid on day of pop-up and balance to be paid upon delivery of receipt.
Our accountant is making the commitment to have your filing done by the due date April 30th, 2020.
Don’t wait, sign up here:- https://www.thetimelyentrepreneur.com/index.php/entrepreneur-sessions-workshops
Here’s the link again:- https://www.thetimelyentrepreneur.com/index.php/entrepreneur-sessions-workshops
By Andrea Ragoo
