Incentives to Invest

• be incorporated in Trinidad and Tobago on or after 8th January, 1988 and be resident in Trinidad and Tobago;
• be locally owned and controlled, and no other company may hold more than twenty-five percent (25%) of the issued share capital, either directly or indirectly through its nominees;
• must not be formed by the splitting or the reconstruction of a company already in existence;
• carry out its operations in an area designated to be a regional development area, and produce manufactured goods or industrial services at least seventy-five percent (75%) of which are produced in the regional development area;
• hold at least seventy-five percent (75%) of its fixed assets in the development area;
• employ twenty (20) or more workers at least seventy-five percent (75%) of whom work in the regional area, and receive more than sixty percent (60%) of the company’s total payment in respect of all wages and salaries.

• in relation to international investors, have a minimum capital expenditure as outlined in the Act;
• be constructed or undertaken primarily for use in the tourism industry; and
• be available on a continuing basis for use in the promotion of Trinidad and Tobago as a tourist destination.

• Initial allowance on expenditure of 50%;
• First year allowance on expenditure of 30%;
• Second year allowance on expenditure of 20%;
• Annual allowance on tangible expenditure of 20% calculated on a straight-line basis in respect of any unrelieved balance of expenditure;
• Expenditure on the development of a dry hole shall, with the Minister’s approval, be written off in the financial year in which the dry hole is plugged and abandoned;
• Work-over, maintenance and repair work (on completed wells and qualified side tracks) deductions covering all costs other than tangible cost incurred;
• Heavy oil allowance – sixty percent (60%) for the financial year in which the expenditure is occurred; and eighteen percent (18%) of such expenditure for each of the next five (5) years;
• Capital allowances of up to one hundred and forty percent (140%) of expenditure (in calculating taxable profits) incurred between January 1st 2013 to December 31st 2017 in respect of the drilling of exploration wells in deep horizon on land (exceeding a true vertical depth of 8,000 feet) or in shallow marine areas (exceeding a true vertical depth of 12,000 feet) where such exploration has been certified by the Minister in writing, but not including expenditure incurred in respect of an exploration dry hole, finance, administrative and other indirect costs.

These allowances are claimed on the entity’s tax returns:

• Signature bonuses for the award of a production sharing contract or on issue of an Exploration and Production Licence may be capitalized and amortised on a straight-line basis over five (5) years;
• Production bonuses are deductible whenever payable.

Further incentives are available in relation to Supplemental Petroleum Tax (‘SPT’):

• In computing SPT, an allowance equal in amount to the royalty including over-riding royalty paid on crude oil in respect of which gross income is derived is deductible from gross income;
• Tax credit of twenty percent (20%) of qualifying capital expenditure on:
  • Approved development activity in mature marine or land oil fields; of
  • Acquisition of machinery and plant for use in approved enhanced oil recovery projects.
• The SPT tax rate is computed by discounting twenty per cent (20%) of the tax rate in relation to marine oil fields twenty-five (25) years or older and oil fields with a production level of 1500 barriers or less per day.

• Training and retraining of employees – up to one hundred and fifty percent (150%) of the reasonably incurred expenses;
• Artistic works including performance arts – actual expenditure subject to a maximum of $3M;
• Granting of scholarships to nationals unaffiliated to a company for accredited and approved tertiary education – the actual expenses incurred;
• Promotion or sponsorship of sporting activities or events or sportsmen – actual expenditure subject to a maximum of $3M;
• Sponsorship by a company of audiovisual or video productions for radio or television for local education or entertainment purposes or reflecting local culture or the incurring of such expenditure by a production company in relation to its own works of such nature – up to one hundred and fifty percent (150%) of the actual expenditure subject to a maximum of $3M; and
• Promoting the fashion industry – up to one hundred and fifty percent (150%) of the actual expenditure subject to a maximum of $3M.

• Initial allowances of ten percent (10%) of the expenditure on erection of buildings and structures for industrial purposes;
• Initial allowances of seventy-five percent (75%) on purchase of plant and machinery reduced in certain industries to twenty percent (20%);
• Annual allowances equal to twenty percent (20%) of the expenditure on building structures or five percent (5%) of the expenditure where a person carries on petroleum operations under license issued after 1st January, 1970;
• Annual allowances of a reasonable amount for wear and tear on plant and machinery;
• Oil refineries – annual allowances calculated by the manufacturer on one hundred and twenty percent (120%) of the expenditure;
• Investment allowance for capital expenditure in respect of production business on land equal to one hundred and fifty percent (150%) of the expenditure, that is, forty percent (40%) in year 1 and twenty percent (20%) in the following five (5) years.

• Approved Industry;
• Approved Agriculture, Livestock, Forestry and Fisheries;
• Approved Hotels;
• Approved Mining Purposes;
• Other approved purposes, e.g., sports and recreational activities for the tourism sector.

• Machinery and Equipment – Free or twenty-five percent (25%);
• Processing Raw Material inputs – zero percent (0%);
• Parts for assembly – five percent (5%).

• Non-taxable Market Development grant up to the equivalent of fifty percent (50%) of new market development cost (not applicable to market development in foreign investor’s country of domicile).  Recipients of this grant must meet the criteria set out by the Export Development Corporation which awards the grants;
• Tax deductions of up to one hundred and fifty percent (150%) of actual promotional expenses in foreign markets (applicable only to companies incorporated and resident in Trinidad and Tobago). The allowance is limited to the creation or expansion of a foreign market.

• Customs duties on capital goods, spare parts for machinery and raw materials for use in the construction and equipping of premises and in connection with the approved activity;
• Import and Export duties, taxes or licensing requirements;
• Land and Building Taxes;
• Fees for Work Permits;
• Foreign currency or property ownership restrictions;
• Corporate, capital gains, withholding and value added taxes;
• Duties on vehicles for use only within the Free Zone.

• Exemption from import licensing, or where goods are being shipped other than to Trinidad and Tobago, an exemption from export licensing;
• Exemption from income tax, corporation tax, business levy where:
  • the approved enterprise is engaged in the construction, sale, lease, rental and management of a Free Zone as an approved activity;
  • the approved enterprise is engaged in manufacturing in a Free Zone, or engaged in activities involving international trading in products, including products originating in countries which are members of the Caribbean Common Market;
  • the approved enterprise is engaged in exporting services from Free Zone to a territory other than Trinidad and Tobago;
• Exemption from withholding tax on profits of a branch, dividends and other distributions arising from activities in the Free Zone, remitted or deemed to be remitted by an approved enterprise to a non-resident;
• Exemption from the requirements of the Foreign Investment Act where (i) a person is seeking to register a company to be established in a Free Zone as an approved enterprise or (ii) a person invests in an approved enterprise established in a Free Zone or holds interest in land in a Free Zone.

• Development and operation of Free Zones;
• Manufacturing (including downstream petrochemicals) for export;
• International Trading in Products;
• Provision of Services for export (for example, Information Processing and Financial services).

• The company must be resident in Trinidad and Tobago, with the central management and control of its affairs situated in Trinidad and Tobago;
• The company must be a manufacturing enterprise, producing approved products as indicated by not being on the list of products on the First Schedule of the Fiscal Incentives Act, Chapter 85:01 (as amended);
• The company must be declared an approved enterprise under Sections 2 and 12 of the Fiscal Incentives Act, Chapter 85:01 (as amended);
• The company must make a contribution towards the Trinidad and Tobago economy in terms of employment, linkages, and investment.

• Exemption from customs duties on the construction of an approved project;
• Exemption from Value Added Tax (VAT); and
• Exemption from Income Tax on dividends or other distribution, other than interest, out of profits or gains derived from the manufacture of the approved product during the tax holiday period.

• Tax credit of 25% in respect of persons who purchase  bonds issued under the National Tax Free Savings Bonds Regulations, 1977.  The credit is limited to 25% of the face value of the bonds where the maturity period is five, seven or ten years. The credit may also be carried forward.
• No Motor Vehicle Tax applies to new or used Electric Cars with an engine not exceeding 179 kilowatts imported into Trinidad between 1^st January, 2015 and 1^st January, 2020. However, used cars cannot be older than four years at the time of importation.
• No Motor Vehicle Tax applies to new or used Hybrid Cars with an engine not exceeding 1799cc imported into Trinidad between 1^st January, 2015 and 1^st January, 2020. However, used cars cannot be older than four years at the time of importation.