St Helena Seeks to Become Fair Tax Jurisdiction

The government of St Helena has announced plans to introduce a new taxation system aimed at attracting foreign companies while ensuring fairness and competitiveness. This move is part of the island’s efforts to establish itself as a responsible and transparent financial hub.

Proposed Taxation Scheme

Under the proposed scheme, companies operating in St Helena will be taxed on their worldwide income, with a deemed portion of profits considered locally derived. This approach would eliminate the need for foreign tax credits and ensure that companies are not double-taxed on the same income.

Here are some key features of the proposal:

• Companies will be taxed on their worldwide income
• A deemed portion of profits will be considered locally derived, eliminating the need for foreign tax credits
• The government is proposing a 20% tax charge on global profits

Effective Tax Rate

The proposed effective tax rate would be 5%, combining the 20% global profits tax with the local income tax rate of 25%. This approach aims to strike a balance between attracting foreign investment and ensuring that St Helena receives a fair share of revenue from companies operating within its jurisdiction.

• Effective tax rate: 5%
• Global profits tax: 20%
• Local income tax rate: 25%

Feedback and Consultation

The government is seeking feedback from stakeholders on this proposal, including the question of whether the effective tax rate should be:

• 3%
• 7%
• Something else?

Additionally, the introduction of a minimum tax charge for medium or large businesses is also under consideration.

Goals and Objectives

By adopting a fair and transparent taxation system, St Helena aims to establish itself as:

• A reliable destination for foreign investment
• An attractive location for businesses looking to operate in the region
• A jurisdiction that generates revenue to support its development goals