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Guiding Your Business

The first step in starting a new business is to have an outline showing what your business plan will entail. While the success of a business is not guaranteed, a well thought out plan will increase the odds in your favour. This plan should include visiting the Inland Revenue Department to determine the taxes and licences for which you will be liable. After you have worked out the details of your plan, it is time to get the business registered. A business plan is not required for this.

There are two ways to register your business depending on whether your business will be incorporated or whether you choose to be a sole trader. For information on incorporating your business you can contact the Financial Services Regulatory Commission (FSRC) at 869-467-1019, located on Liverpool Row in Basseterre, St. Kitts or Charlestown, Nevis. If you chose to carry on business as a sole trader, then you will not have to go through this step. An individual should do the necessary research to determine which avenue is best, depending on their unique circumstances, and the type of business venture they wish to undertake.

One of the most important aspects of conducting a business, is ensuring that proper and complete records are kept for all transactions relating to the business. In addition, business records should always be kept separate from personal records. These two will be invaluable in helping you to determine the success of your enterprise, and it is required for tax purposes.

All businesses, whether incorporated or sole trader, are required to have a business licence before the start of operations as stated in the Licences on Businesses and Occupations Act Chapter 18.20

(1) Notwithstanding anything contained in any other law, every person wishing to carry on a business, occupation or trade or practising any profession mentioned in the Schedule to this Act, as a condition precedent to carrying on any such business, occupation, profession or trade, shall apply in writing to and obtain from the Minister a licence to engage in or to conduct such business, occupation, profession or trade and such licence shall be according to the classification thereof in the said Schedule, and shall be issuable on payment of the prescribed fee.

(2) A licence issued under subsection (1) of this section shall entitle the holder thereof, for the period specified in the licence, to carry on the specified business or occupation, profession or trade from the designated place of business.

Applications for a Business Licence should be submitted to the Ministry of Finance, located at Golden Rock, Basseterre. The Business and Occupation Licence Application must be fully completed when submitted, and applicants must provide two forms of picture identification, for each owner listed on the application. Acceptable IDs are passports, St Christopher and Nevis drivers licence, St Christopher and Nevis Social Security card and National Identification card. Other international forms of identification, such as driver licences and national IDs may be accepted.

Depending on the type of licence being sought there may be further requirements. For example, a licence to operate a restaurant will require that the premises and surrounding environment, be examined by a health officer, before the licence is granted. In addition, there will be periodic checks to ensure that the premises remain sanitary, and all the health codes are being followed.

Other types of businesses may have other regulations and rules, set by other government agencies which must be followed before a licence is issued. These agencies will also be responsible for ensuring that the rules are followed after operations have started.

There are many different types of business licences with different fees. The Business and Occupation page of the website contains a list to which you can refer.

A Business Licence is location specific, which means, a licence is required for each place of operation. If the location of the business changes, the owner must notify the Ministry of Finance prior to the move.

Each place of business chargeable

Where different stores, shops or other premises are kept in the name of one person or firm, a separate licence shall be taken out for each place of business, store, shop or other premises:

Licences are not transferable.

The licence is not transferrable between locations. In addition, a licence is not transferable between licence holders, except in the following cases:

 

1. Provided that a business licence to a natural person shall on the death of the licensee be deemed to be transferred to the widow or widower of the licensee, so long as the widow or widower remains unmarried:

2. Provided also that a business licence held and used by a company may be transferred on the sale of the company.

If the application for licence is approved, the successful applicant will receive notice from the Ministry of Finance or the Inland Revenue Department, informing them to visit the Inland Revenue Department to officially register the business and pay for the licence.

On completion of the registration and payment, the Department will issue a Business and Occupation Licence Certificate. This must be displayed in the business place of operation, where it can be viewed by the general public. If the owner has applied for multiple licences, each licence must be displayed in the appropriate business location.

During registration, the owners may be registered for other taxes as provided by the tax laws of the Federation. The compulsory taxes are the Unincorporated Business Tax (UBT) for those businesses that are not incorporated and the Corporate Income Tax (CIT) for those companies that are incorporated. There may be other taxes licences and fees associated with your enterprise. For example, an insurance business will also be registered for Insurance Premium Tax and Insurance Registration Fees and Tour operators will also be registered for Island Enhancement Tax

It is recommended that the business owner visit the Department, so that he /she can fully understand their tax rights, responsibilities and obligations and seek clarification on any issue they may have.

After you have registered your enterprise at the Inland Revenue Department, you may proceed to begin conducting your business activity. However, as stated before there are tax obligations which must be met. It is important for taxpayers to file and pay their taxes on or before the required due date. Depending on the type of tax for which you are registered you may have to file tax returns monthly, quarterly or annually. For example, VAT returns will have to be submitted monthly; UBT returns are to be submitted quarterly and CIT returns are submitted annually.

The Department will send out remittances to taxpayers by e-mail or through the post. The due dates for submitting returns will be shown on the form. Should you fail to receive a form please contact the Department to have one resent or you can come into the office and have one printed for you. The Department has also begun using E-Services where you have the convenience of filing and paying from any location and at any time.

To avoid paying interest and penalties, it is important to file and pay taxes on time. Interest and penalty charges begin the day after the due date. Interest charges range from 1% to 5% per month, depending on the tax type. Penalty charges are from $ 100.00 per month to 5% of the outstanding tax.

The Inland Revenue Department extends its appreciation to all organizations for its continued efforts at co-operation and compliance.

As the Inland Revenue Department attempts to continuously educate taxpayers of their rights and obligations, we wish to bring to your attention the importance of keeping your registration details up-to-date. We at the Inland Revenue Department understand that businesses may change their registration information from time to time and therefore, we require all businesses to update their information with the department periodically. Information which should be updated include but are not limited to:

  1. Mailing Address of Business
  2. Location of Business
  3. Telephone Number
  4. Permanent or Temporary Closure of Business
  5. Date of closure of business

This information can be updated by completing the Change of Registration Details Form which can also be obtained from the Inland Revenue Department. Once the form is completed it should be returned to the Inland Revenue Department, Taxpayer services division for processing.

Additionally, please be reminded that any changes in business activity, name of business or ownership of business should be completed through the Ministry of Finance.

To start a business it is recommended that you firstly acquire a Business plan and then fulfill the other requirements listed below:

1. Decide whether you wish to incorporate your business.

2. Apply to the Ministry of Finance for a Business Licence, for each location and type of business.

3. Pay the licence fees and complete the business registration at Inland Revenue Department.

4. Ensure you are registered for all other taxes and that you fully aware of your tax obligations.

5. Submit tax returns and make payments on time to avoid interest and penalties.

6. Inform the Inland Revenue Department and the Ministry of Finance accordingly if there are any changes to your businesses registration particulars. Follow up visit by Inland Revenue.

7. Register for e-services for greater convenience.

The Objections and Appeals function serves as the administrative forum for any taxpayer contesting an Inland Revenue Department compliance action.

© 2020 Inland Revenue Department St. Christopher (St. Kitts) & Nevis

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