Anguilla Tax Rates - Taxation in Anguilla

There are no income, capital gains, estate, profit or other forms of direct taxation on either individuals or corporations, whether resident in Anguilla or not. This makes Anguilla a very attractive location for financial services professionals to base themselves. The Government recognises the desirability of expanding Anguilla's professional infrastructure and has very recently established a new programme allowing for multi-year work permits of up to four years duration and relaxed residency rules.

Anguilla is a British overseas territory in the Caribbean Sea, east of Puerto Rico. Apart from the main island of Anguilla itself, the territory includes a number of other smaller islands. The capital, The Valley is situated on the main island of Anguilla.

Exchange Control in Anguilla

There are no exchange controls in Anguilla. Although the official currency is the Eastern Caribbean Dollar the United States Dollar is commonly used.

Business Taxes in Anguilla

Accommodation Tax

- The Accommodation Tax is a 10% tax charged on the hotel account or the rented accommodation account.
- The tax is charged to the visitor and is collected by the proprietor of the hotel of the owner of the rented accommodation.
- The tax is to be paid in to the IRD within 15 working days of the end of each calendar month.
- A surcharge of 1% per month is charged if the tax is not paid within the 15 working days
- The proprietor / owner is required to keep and submit a copy of the visitors register to the IRD.

Tourism Marketing Levy

- The proprietor / owner of the rented accommodation collects US$1.00 per night for each room rented from the guest.
- The owner is required to match the guest's contribution.
- Payment is due to the Inland Revenue Department by the 15th of the following month.
- There is a penalty and an interest charge on all late submissions.

Villa Rental Fees

- Nonresidents who have been granted permission to rent are required to pay a fee of EC$6,750 for the first 2000 sq. ft.
- Additional charges are applied for covered and uncovered floor space in excess of the first 2000 sq ft.
- Fees are due and payable by the first working day in January at the Inland Revenue Department.

Other Taxes in Anguilla

Property Tax

- The property is valued by the Lands and Surveys Department.
- The tax is presently calculated at .075% of the value of the property.
- The tax is paid at the Inland Revenue Department of Anguilla

Transfer Tax on Real Property

A transfer tax of 5% is levied either on the assessed value of the property or the sales proceeds, whichever is greater. This tax is payable by the buyer.

Alien Landholding License

Foreigners buying real property in Anguilla are liable to alien landholding license, levied at 12.5% on the assessed value of the property or the sales proceeds, whichever is greater.

Anguilla Company Structures

Anguilla has three types of companies:

1) The Ordinary Company
2) The International Business Company
3) The Limited Liability Company

Companies in Anguilla must be incorporated through a local agent all of whom, are licensed under the new Company Management Ordinance and regulated by the Inspector of Company Managers. The Government and private sector are working closely together to establish best practice guidelines for company managers. These will be designed to ensure that through the application of due diligence procedures and the adoption of high standards of practice, Anguilla attracts the best business and that its reputation is maintained.

The relevant IBC, LLC, Limited Partnership and Trust Ordinances all provide a statutory exemption from all forms of corporate, income withholding or other like taxes in respect of international Anguilla Companies business. Companies are usually formed instantly using the ACORN system.

Anguillia Companies - The Ordinary Company

The ordinary company, which can be used both within Anguilla and as an offshore vehicle, is governed by the new Companies Ordinance. The Ordinance contains many attractive features:

- Companies may be incorporated by one incorporator and have one director.
- Companies may be limited by shares, by guarantee or by both shares and guarantee.
- The Ordinance abolishes the doctrine of ultra vires.
- Companies may acquire, purchase or own their own shares.
- Filing formalities have been streamlined.
- Companies may continue in or out of Anguilla.
- A special class of Specific Private Companies that are exempted from some record keeping and accounting requirements

Anguillia Companies - The International Business Company

The International Business Company is based on the traditional model and provides for the easy incorporation and subsequent administration of a flexible and cost effective corporation.

Companies incorporated in any other jurisdiction may be continued in Anguilla as an IBC. An Anguilla IBC can, where the laws of another jurisdiction permit, redomicile to such jurisdiction.

Anguillia Companies - The Limited Liability Company

Anguilla is one of the few jurisdictions to have an Act or Ordinance dealing specifically with limited liability companies. Although the LLC Ordinance has its roots in the original Wyoming legislation, Anguillian LLCs have developed the concept much further.

An Anguillian LLC can readily be structured so that it possesses less than three of the four corporate characteristics recognized by the U.S. Internal Revenue Service, namely:

(a) continuity of life,
(b) limited liability,
(c) centralized management, and
(d) free transferability of interests.

In such case the LLC will be treated as a partnership. Properly structured, therefore, an Anguillian LLC will provide its members with limited liability, but provide the advantages of income and losses passing through to the members.

The Anguillia LLC Ordinance has many features not found in the original Wyoming legislation, including a provision that its term can be perpetual or as otherwise provided for in the LLC agreement.

Anguilla Trusts

The new Trusts Act of Anguilla is the culmination of an exhaustive study of the trusts legislation of many other jurisdictions. The decision was taken to repeal the existing trusts legislation and replace it with a completely new Ordinance, rather than attempt to amend it.

The Trusts Ordinance, which has its roots in English trust law, provides a framework so flexible that the only limitation to its use is the imagination of the trust practitioner. Specifically, the Ordinance permits commercial or charitable purpose trusts, unit trusts, spendthrift trusts, asset protection trusts and what are termed variant trusts. The provision for variant trusts permits a settlor to create a trust (in whatever form and by whatever name) of a type recognized by the law or rules of his religion or nationality or which is customarily used by his community.

The Ordinance provides for a protector of the trust (who may be the trustee). The protector may be provided with the power to remove the trustee and to appoint new or additional trustees.

The Rule Against Perpetuities has been abolished and accumulation of income throughout the full term of a trust is possible.

The Fraudulent Dispositions Ordinance provides that a fraudulent disposition is voidable by a creditor provided that the settlor was insolvent at the time of the disposition or became so as a result thereof and provided that the creditor commences his action within three years of the date that the assets were settled into trust. The burden of proving that the settlor was or became insolvent as a result of the transfer is on the creditor.

In relation to asset (or creditor) protection trusts, therefore, Anguilla has deliberately taken a more conservative approach than some jurisdictions.

Where a trust is created under the laws of Anguilla, the Court shall not vary it, set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the Order of another Court in respect of:

- marriage or its termination;
- succession rights;
- the claims of creditors in an insolvency;
- the imposition of any foreign tax or duty.

Other characteristics of an Anguilla trust include choice of governing law and flight provisions.

Anguilla Partnerships & Limited Partnerships

The Partnership Ordinance 1994 sets out:
- The definition of partnership
- The rules for determining the existence of a partnership
- The power of partners to bind the firm
- The nature of partnership property
- The interests and duties of partners
- The types of dissolution
- The rights of third parties against apparent members of the firm
- The rights and duties of partners on dissolution
- The distribution rules on final settlement of accounts
- Confidentiality

The Limited Partnership Ordinance 1994 sets out:
- The essential elements of a limited partnership
- Registration and record keeping
- Returns of Contributions
- Transactions by partners with the limited partnership
- Dissolution
- Proceedings
- Tax Exemptions

The Limited Partnership Ordinance provides an attractive investment vehicle, particularly for the raising of venture capital, permitting the limited partners to be insulated from liability.