No Double Taxation on Earnings Under CSME

There will be no double taxation on the earnings of CARICOM nationals, who set up businesses or work in CARICOM member states. This is the word from Robert Miller, head of the CARICOM Single Market and Economy (CSME) Unit in the Ministry of Foreign Affairs and Foreign Trade.
The free movement of skills/labour is a constituent legislation of the CSME and gives CARICOM nationals the right to seek work or engage in gainful employment in all member states. However, there has been a common view that persons, who work in a CARICOM member state, other than their home country, will pay double taxes.
Clarifying the misconception, Mr. Miller explained that, “under the CSME, you do not pay tax in both your country of origin and the host country. You are subject to the tax law of your country of origin only, not that of the host.”
Under the Intra-Regional Double Taxation Agreement, which was implemented in 1994 and has so far been enacted in 10 CARICOM member states, all self-employed and wage earning CARICOM nationals are protected from paying taxes twice on the same earnings.
The ten countries are: Antigua and Barbuda, Barbados, Belize, Dominica, Guyana, Jamaica, St. Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.
Speaking with JIS News, Mr. Miller emphasized that each CARICOM national should know the types of taxes that they are supposed to pay in their home country, before commencing work in another member state.
Whilst the CARICOM national does not pay tax in the host country, he/she is required to contribute to that country’s social security scheme during his tenure of employment there, since he/she is entitled to the same benefits as the nationals of the host country. This is in keeping with the CARICOM Agreement on Social Security, which came into effect on April 1, 1997.
Highlighting the benefits of free movement to the Caribbean’s corporate sector and labour force, Mr. Miller cited the improved ability to recruit skilled workers and to source employment on a region-wide basis. In addition, free movement provides for improved market access for service providers, particularly in sectors such as consultancy, nursing, engineering, architecture and teaching.
With free movement also comes enhanced access to specialised training and technology transfer. For example, Mr. Miller pointed out that the HEART Trust/NTA is helping in vocational training in the Eastern Caribbean.
In addition, there will be greater scope for job creation and poverty eradication; an enhanced framework for small business development, for example the formation of partnerships and joint ventures; prospects for increased economies of scale, particularly from natural resource rich locations; and enhanced ability of firms to outsource production components.
To date, six categories of labour and service providers can benefit from the free movement of skills/labour clause, which is expected to be in full implementation by 2006.
These are university graduates, artistes, sportspersons, managers, media workers and entrepreneurs. They, however, have to gain a skills certificate from their country of origin before commencing work in their host country.The skills certificate, which replaces the work permit, is procured in the country of origin.