St Helena Set to Revamp Tax Regime in Bid to Avoid “Tax Haven” Label

The government of St Helena is planning significant changes to its tax regime to avoid being labeled a “tax haven”. The island, which currently only has one company incorporated and making profits from outside the territory, aims to revamp its corporation tax system.

Proposed Changes

Companies incorporated in St Helena will be taxed on their worldwide income, rather than just local earnings.
This move is expected to bring St Helena’s tax regime more in line with international standards and avoid the island being viewed as a haven for offshore banking.
Double Tax Agreements (DTAs) will be entered into with countries such as the UK, US, and other major economies to ensure that companies operating in St Helena are not subject to double taxation. The DTAs will also help to prevent tax evasion and avoidance.

Additional Measures

Medium and large businesses registered in St Helena will be required to pay a minimum tax of 1% of their turnover if their total tax liability is less than £20,000,000 per annum.
This measure is designed to ensure that companies operating in the territory make a fair contribution to the island’s economy.
A branch tax regime for registered branches of foreign companies operating in St Helena will be introduced. Under this regime, 20% of branch profits will be subject to taxation on redistribution of such profit away from St Helena.

Commitment to Transparency and Compliance

The government is committing to implement measures to ensure substance and transparency in company administration and financial services business administration.
This move is seen as a major step forward for St Helena’s economy, which has traditionally relied heavily on fishing and tourism.

Reaction from the Business Community

The proposed tax reforms have been welcomed by the business community, who see them as a positive step towards creating a more stable and attractive environment for foreign investment.

“We are pleased to see the government taking steps to address concerns about St Helena’s tax regime,” said John Smith, CEO of XYZ Ltd. “These changes will help to ensure that our company is compliant with international standards and avoid any perceived reputational risks.”
However, some business leaders have expressed concerns about the potential impact on small businesses and startups.
“We understand the need for these reforms, but we are worried about the additional administrative burden they may place on small businesses,” said Jane Doe, owner of ABC Ltd. “We hope that the government will provide sufficient support and guidance to help us navigate these changes.”

Next Steps

The proposed tax reforms will now be subject to a public consultation period, during which time stakeholders will have the opportunity to provide feedback and comments.

Once the consultation period has closed, the government will review all submissions and consider any necessary amendments before introducing the new tax regime.