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Compliance Audit Checklist in St. Kitts and Nevis

St. Kitts and Nevis, a popular tax haven, has no mandate on accounting and audit for offshore companies that do not conduct business within the country. However, resident companies are required to maintain accounting records and undergo an annual audit.

Accounting Requirements

Companies in St. Kitts and Nevis must follow International Financial Reporting Standards (IFRS) and maintain source documents and accounting records for at least six years from the date of filing their initial tax return. The financial statements to be prepared include:

  • Balance Sheet
  • Profit and Loss Statement
  • Cash Flow Statement
  • Statement of Retained Earnings
  • Notes to Accounts

The deadline for filing financial statements is 3.5 months from the end of the enterprise’s financial year. Failure to file within the deadline attracts penalties, including:

  • Fine of XCD 100 per month
  • Late payment penalty of 10% of the amount
  • Late payment fee of 1.25% per month

Tax Compliance

St. Kitts and Nevis has a relatively low-tax regime, with no income tax for individuals. However, companies are required to report their profits within:

  • Three months from the end of the financial year (for offshore companies)
  • Six months from the end of the financial year (for resident companies)

Resident legal entities pay corporate tax at a rate of 35%, while non-resident legal entities pay tax on profits received. Non-resident entities with a permanent business establishment in St. Kitts and Nevis must file an annual Income Tax Return.

Frequently Asked Questions

  • Is St. Kitts and Nevis a tax haven?
    • Yes, it is considered a tax haven due to its low-tax regime.
  • Does St. Kitts and Nevis tax worldwide income?
    • Companies incorporated in the country or considered tax residents have to pay taxes on worldwide income.
  • Is there a property tax in St. Kitts and Nevis?
    • Yes, there is a property tax levied on the purchase, sale, and ownership of property, with an additional 10% license fee for non-resident buyers.
  • Is there a tax on legal entities in St. Kitts and Nevis?
    • Yes, resident legal entities pay corporate tax at 35%, while non-resident legal entities pay tax on profits received.
  • What is the currency of St. Kitts and Nevis?
    • The East Caribbean Dollar (XCD) is the official currency.

Conclusion

In conclusion, compliance with accounting and tax requirements in St. Kitts and Nevis is crucial for businesses operating within the country. This article provides a comprehensive checklist for companies to ensure they are meeting their obligations and taking advantage of the country’s favorable tax regime.