Income Tax (Amendment) Act 2003

Link to law: http://laws.gov.ag/acts/2003/a2003-4.pdf

No. 4 of 2003. The Income Tax (Amendment) 1 ANTIGUA
Act 2003. AND

BARBUDA

[ L.S. ]
I Assent,

James B. Carlisle,
Governor-General.

28th March, 2003

ANTIGUA AND BARBUDA

No. 4 of 2003

AN ACT to amend the Income Tax Act Cap. 2 12.

[ 3rd April, 2003 ]

ENACTED by the Parliament of Antigua and Barbuda as
follows -

1. This Act may be cited as the Income Tax (Amendment) Short title.
Act 2003.

2. The Income Tax Act, in this Act referred to as the principal Amendment of
Act, is amended in section 10 as follows - section 10 -

Deductions
allowed.

(a) by inserting after paragraph (a) of subsection (1)
the following -

"Provided that such interest is paid only to banks
and financial institutions licensed under the
Financial Institutions (Non-Banking) Act on loans Cap. 169
borrowed at commercial rates and terms;"

(b) by inserting after paragraph (c) the following -

ANTIGUA 2 The Income Tax (Amendment) No. 4 of 2003.
AND Act 2003.

BARBUDA

"Provided that the rent paid by a company to its
shareholders, directors, spouses and children of
shareholders and directors, or close family members
of shareholders and directors, or to any related
parties or subsidiary companies or beneficiaries
shall not exceed 5% of the otherwise chargeable
profits of the company; and

Provided further that the Commissioner shall allow
such amounts as he considers reasonable and just."

(c) by inserting after paragraph (i) the following -

"6) For the purposes of this Part "related
parties" include -

(i) entities that control, or are
controlled by, or are under
common control with the entity
(e.g., holding companies,
subsidiaries and fellow
subsidiaries);

(ii) associates;

(iii) individuals who, by virtue of an
interest they own in the enterprise,
have control over it, and close
family member of any such
individual;

(iv) key management personnel, and
their close family members; and

(v) enterprises in which a substantial
interest is owned by any of the
individuals included above.

(d) by the repeal of subsection (2) and the substitution
of the following -

"(2) Notwithstanding anything to the
contrary contained in this or any other Act, in
any case approved by the Cabinet in which
the erection of a new hotel or any extension
of an existing hotel is commenced after the

No. 4 of 2003. The Income Tax (Amendment) 3 ANTIGUA
Act 2003. AND

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first day of January 2003 and in which a
license has been granted to any person in
respect of such hotel under the Hotels Aid Act,
such person shall be exempt from payment of
income tax in respect of the income arising
from such hotel for the period and on
attainment of the bedroom capacity set out
below -

(a) where the minimum capacity of
the new hotel is one hundred (100)
bedrooms, the tax exemption
period is twenty-five (25) years;

(b) where the capacity of extension
of an existing hotel is the addition
of thirty (30) or more bedrooms
but less than fifty (50) bedrooms,
the tax exemption period is seven
(7) years;

(c) where the capacity of extension
of an existing hotel is the addition
of fifty (50) or more bedrooms,
but less than one hundred (100)
bedrooms, the tax exemption
period is fifteen (15) years; and

(d) in the case of the addition of one
hundred (1 00) or more bedrooms
to an existing hotel, the tax
exemption period is twenty-five
years.

(3) Every exemption granted under this
section takes effect from the year of
assessment next to the year in which the
completion of the erection or extension of
the hotel is reported, in writing, to the
Commissioner.

*

(4) Where there is any dispute regarding
the date of commencement or completion
of such erection or extension, the onus of
proving the commencement or completion

ANTIGUA 4
AND

BARBUDA

The Income Tax (Amendment)
Act 2003.

No. 4 of 2003.

shall be on the taxpayer to furnish sufficient
evidence to the satisfaction of the
Commisioner."

(e) by renumbering subsection (3) as subsection (5).

Amendment of 3. Section 11 of the principal Act is amended as follows -
section 1 1 -
Deductions not
allowed. (a) by deleting the full stop after paragraph (h) and

substituting a colon;

(b) by inserting after paragraph (h) the following -

"(i) salaries, wages, allowances, directors' fees
and other payments made for services ren-
dered by the owners, shareholders, directors,
spouses and children of shareholders and di-
rectors or close family members in excess of
25% of otherwise chargeable profits; provided
that in the case of a loss, the Commissioner shall
allow such amounts as he considers reasonable
and just;

Cj) interest on any loan paid to owners, share-
holders, directors, spouses and children of
shareholders and directors or close family
members or to any related party."

Amendment of sec- 4. Section 32 of the ~ r i n c i ~ a l Act is re~ealed and substituted
tion 32 - Rate of by the following -
tax upon compa-
nies reduced.

"Rate of tax upon 32. The tax upon the chargeable income of
companies. a company incorporated, registered or

continued under the Companies Act shall be
charged at the rate of thirty-five percentum
(35%) on every dollar of the chargeable
income.

Amendment of 5. Section 39 of the principal Act is amended as follows -
section 39.

(a) by repealing subsection (1) and substituting the fol-
lowing -

"Where any person pays to any other
person not resident in Antigua and Barbuda

No. 4 of 2003. The Income Tax (Amendment) 5 ANTIGUA
Act 2003. AND

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mortgage or debenture interest or any rent, or
expenses allocated to a resident branch or
agency by a non-resident company, or annuity
or any other annual payment which the payor
is entitled to deduct under section lO(1) in
arriving at his chargeable income, the payor
shall upon paying such interest, rent,
annuity or other annual payment deduct
therefrom tax at the rate of twenty
percentum (20%) on every dollar of such
interest payable to such person and at the
rate of twenty-five percentum (25%) in the
case of payment as aforesaid to a company
and the payor shall forthwith render an
account to the Commissioner of the amount
so deducted and every such amount shall
be recoverable in the like manner as is
provided under section 69."

"Provided that the provisions of this section
shall not apply to interest payments on Bank
deposits made to non-resident persons."

(b) by inserting after subsection (4) the following -

"(5) For the purposes of this section a
resident branch of a foreign company and its
headquarters and other non-resident branches
shall be regarded as separate persons carrying
on separate businesses."

6. Section 40 of the principal Act is amended by inserting Amendment of
after the proviso to subsection (1) the following - section 40.

"Provided further that a resident branch of a foreign
company and its headquarters and other non-resident
branches shall be regarded as two separate companies
carrying two separate businesses."

7. Section 49A(1) of the principal Act is amended by Amendment of ,
deleting from paragraph (a) the words "of the gross annual 49 A.

income."

ANTIGUA 6 The Income Tax (Amendment) No. 4 of 2003.
AND Act 2003.

BARBUDA

Passed the House of Representatives Passed the Senate this 21st day
this 7th day of February, 2003. of February, 2003.

B. Harris,
Speaker.

M. Percival,
President.

S. Walker, S. Walker,
Clerk to the House of Representatives. Clerk to the Senate.

Printed at the Government Printing Office, Antigua and Barbuda,
by Walter A. Massiah, Acting Government Printer
Read Entire Law on laws.gov.ag