2023 Laws not yet authenticated through a Commencement Order

Revised Laws of Saint Lucia (2023)

13.   Schedule 1 – Zero Rated Supplies

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    13.1   Application of zero rating.—Where a registered person has applied the rate of zero percent to a supply under Schedule 1 of the Act, the registered person must obtain and retain documentary proof acceptable to the Comptroller substantiating the person's entitlement to apply the zero rate to the supply. The registered person also must comply with all other conditions or restrictions that the Comptroller may impose for the protection of the revenue.

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    13.2   Minister's designation that foreign country is not an export country.—The Minister may designate a country as one that is not an export country, but it is anticipated that this power will be exercised only in exceptional circumstances. The power may be exercised if another country discriminates against Saint Lucia in the treatment of exports to Saint Lucia under its value added tax or comparable tax.

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    13.3   Substantiation of zero rating.—To obtain zero rating for the export of goods and related services under this paragraph, the exporter, at the port of exit, must identify the goods and present documentary proof required by the Comptroller. The export must comply with the requirements of Schedule 1, paragraph 3(1) of the Act.

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    13.4   Fuel.— Schedule 1, paragraph 2(1)(h) of the Act zero rates the supply of fuel. Fuel is inclusive of the oils, gases and other preparations included in the Customs Tariff Headings specified in the definition of “fuel” in Schedule 1 which include, for example, illuminated kerosene, liquefied natural gas, liquefied profane, liquefied butane, ethelyne and propylene, among others. Fuel does not include any other petroleum, gas or other products not covered in the said Tariff Headings.

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    13.5   A going concern – explanation of term.—A going concern is an income- producing activity capable of separate operation that is in fact operational and capable of being carried on without interruption after the transfer, but not a dormant or prospective business. A transfer qualifies if it constitutes the entire taxable activity of the supplier that is a going concern or a portion of a taxable activity of the supplier if capable of being carried on as a going concern as required by section 4(3). A supply can be of a going concern even if the transferred business is not profitable, or is being transferred to a liquidator, receiver, trustee in bankruptcy, or other person appointed upon the insolvency of a registered person. The supply is zero rated only if it takes place on or after the effective date of the VAT Act. A supply of a going concern comes within the zero rating of Schedule 1, paragraph 2(1)(i) of the Act, even if the supply is to a person with no previous interest in the business. Zero rating applies to a supply of an existing business that involves only a change of legal entity or form of doing business, such as from a partnership to an incorporated company. It is not necessary for the transferee to operate the particular income-producing activity acquired, so long as it is capable of separate operation. To illustrate the concept of a going concern, the supply of a vacant factory building held as an investment does not qualify for zero rating as the transfer of a going concern. The transfer of machinery and a factory building that have been used to manufacture shipping boxes is a supply of a going concern that can qualify for zero rating.

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    13.6   Post-supply notice requirement.— Schedule 1, paragraph 2(1)(i)(ii) requires the transferor and transferee to furnish the Comptroller a notice in writing within 21 calendar days after the supply takes place. Unless the transferor and transferee both are registered persons and both sign and file in a timely manner the post-supply notice expressing their intent to treat the transfer as a supply of a going concern under Schedule 1, paragraph 2(1)(i) of the Act, the transfer is not zero rated, even if in fact it is a transfer of a going concern. The 21 calendar day period within which the notice must be filed is determined under the time of supply rules in section 18 of the Act. If the transferee previously was not a registered person, the supply can qualify for zero rating only if the transferee is registered by the date the transfer takes place. If the parties satisfy the notice requirements in Schedule 1, paragraph 2(1)(i) and the transfer does not qualify as a zero rated supply of a going concern under section 4(2) of the Act, the consideration charged for the supply is treated as being exclusive of VAT, the transfer is subject to tax, the value of the supply for tax purposes is the consideration charged, and the transferee can claim an input tax deduction to the extent allowable under the Act. If under the agreement between the parties the selling price is increased to include VAT in the event of non-qualification of the transfer, then the value of the supply is determined on the basis of the adjusted selling price under the contract (reduced, under the general rules, by the amount of VAT).

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    13.7   Details of the transfer.—Under Schedule 1, paragraph 2(1)(i)(ii), the required notice to the Comptroller must include the details of the supply. To satisfy this requirement, the notice must include a complete list of the assets transferred, the market value of each asset transferred, the nature of the business conducted by the transferor and the business to be conducted by the transferee with the acquired assets, and the length of time the transferor's business has been operated with the assets transferred. The transferor must report any assets that will be used in making supplies that are not taxable supplies. The Comptroller may require additional information from the transferor or transferee, or both, or may waive the requirement to value individual assets of nominal value.

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    13.8   Supply upon cancellation of transferor's registration.—If the transferor's registration is cancelled by the Comptroller as part of the transfer of a going concern, then under section 4(21) of the Act the goods not transferred as part of the going concern generally constitute a supply of the goods by the transferor at their market values, except that this rule does not apply to goods for which the transferor has not been allowed an input tax deduction under section 30 of the Act.

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    13.9   Specially designed ventilated boxes.—Schedule 1, paragraph 2(1)(k) of the Act zero rates supplies of ventilated boxes that are specifically designed for use in transporting unprocessed agricultural products. The zero rating extends to boxes designed to transport flowers. Other types of boxes are not zero rated, even if used to transport unprocessed agricultural products.