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Income Tax
Income tax is levied on the income of individuals and companies in Trinidad and Tobago. For individuals, it applies to employment income, business profits, investment income, and other sources of income.
Overview & Legal Basis
Income tax in Trinidad and Tobago is administered by the Board of Inland Revenue (BIR) and applies to residents and non-residents earning income within the country. The tax system is designed to be progressive, with various allowances and deductions available to reduce the tax burden.
Legal Basis: Income Tax Act, Chapter 75:01
Key Features:
- • Progressive tax system with personal allowances
- • Annual filing requirement for most taxpayers
- • PAYE system for employed individuals
- • Quarterly payments for self-employed
- • Various deductions and allowances available
- • Electronic filing available through Tax TT portal
Who Pays Income Tax
Individuals Subject to Income Tax:
- • Residents of Trinidad and Tobago
- • Non-residents earning income in Trinidad and Tobago
- • Employees earning above the tax-free threshold
- • Self-employed individuals and business owners
- • Investors receiving dividends, interest, or rental income
- • Pensioners with income above allowances
Types of Taxable Income:
- • Employment income (salaries, wages, bonuses)
- • Business and professional income
- • Investment income (dividends, interest)
- • Rental income from properties
- • Pension and retirement benefits
- • Capital gains (in certain circumstances)
Note: Certain types of income may be exempt or subject to different tax treatments. Consult with a tax professional for specific situations.
Tax Rates & Brackets
| Income Range | Tax Rate | Description |
|---|---|---|
| First $84,000 | 0% | Personal allowance - tax free |
| Above $84,000 | 25% | Standard rate on excess |
Tax Calculation Example:
Individual earning $150,000 annually:
• Gross Income: $150,000
• Personal Allowance: $84,000
• Taxable Income: $66,000
• Tax Due: $66,000 × 25% = $16,500
• Effective Tax Rate: 11%
Filing Deadlines:
- • Individual returns: March 31 (following tax year)
- • Self-employed quarterly payments: Due quarterly
- • Extension requests: Must be filed before deadline
- • Late filing penalty: $500 per month
Allowances & Deductions
Personal Allowances:
| Allowance Type | Amount | Description |
|---|---|---|
| Personal Allowance | $84,000 | Available to all taxpayers |
| Spouse Allowance | $84,000 | If spouse earns less than $84,000 |
| Child Allowance | $9,000 | Per child under 18 or in education |
| Dependent Allowance | $4,500 | Per qualifying dependent |
| Life Insurance | Up to $50,000 | Premiums paid during the year |
| Mortgage Interest | Up to $30,000 | Interest on home mortgage |
Allowable Deductions:
- Medical expenses exceeding 5% of income
- Educational expenses for self or dependents
- Pension contributions
- Approved charitable donations
- Professional development costs
- Home office expenses (if applicable)
Required Documents
- Form 1 (Individual Income Tax Return)
- All income statements (employment, business, investment)
- Receipts for allowable deductions
- Bank statements
- Investment income statements
- Previous year's tax return
- TD1 certificates from employers
- Receipts for charitable donations
Record Keeping:
- • Keep all tax records for at least 7 years
- • Maintain receipts for all claimed deductions
- • Store documents in a safe, accessible location
- • Consider digital backups for important documents