Revised Laws of Saint Lucia (2023)

14.   Schedule 2 – Exempt Supplies

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   14.1   Financial services.—A supply of financial services is exempt from tax under Schedule 2, paragraph 2(a) of the Act. Financial services as specified are exempt, whether provided for explicit or implicit fees.

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   14.2   Invoicing finance charges.—For purposes of “financial services” as defined in Schedule 2(1), if a supplier makes a taxable supply of goods on credit and includes the finance charges in the total amount payable by the buyer in installments, the total amount payable for the goods (including any finance charges) is subject to tax. If, on the other hand, the seller lists the consideration for the goods and the finance charges separately on the tax invoice, tax is imposed at the time of the supply only on the consideration for the goods.

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   14.3   Definitions of specific terms.—For purposes of “financial services” as defined in Schedule 2(1), the following definitions apply —

“cheque” includes a postal order, a money order, a traveller's cheque, or any order or authorisation (whether in writing, by electronic means, or otherwise) to a financial institution to credit or debit any account;

“insurance policy” means insurance cover under a policy treated as general insurance business or as long-term insurance business under the Insurance Act.

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   14.4   Financial services rendered by businesses that are not registered as banks or financial institutions.—Financial services that are defined as exempt in Schedule 2(1) are exempt, whether rendered by a registered bank or financial institution or by any other person.

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   14.5   Taxable services, even if associated with financial services.—Some services are not exempt under Schedule 2, paragraph 2(a) of the Act, whether or not they are rendered in connection with an exempt financial service. They include, but are not limited to the following —

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      (a)     Legal, accounting and record package services, actuarial, notary, and tax agency services (including advisory services) when rendered to a supplier of financial services or to a customer of that supplier of financial services;

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      (b)     Safe custody for cash, documents, or other items;

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      (c)     Data processing and payroll services;

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      (d)     Debt collection or factoring services;

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      (e)     Trustee, financial advisory, and estate planning services;

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      (f)     Leases, licenses, and similar arrangements relating to property other than a financial instrument; and

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      (g)     Any other explicit fee, including administrative fees.

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   14.6   Accounting and record package services.—Accounting and record package services are services provided to a financial institution rendering exempt financial services that include a financial clearing system that may be part of the settlement process, the posting of financial transactions to or the maintenance of the accounts of the financial institution's customers, and the rendering of services ancillary to the services just described.

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   14.7   Factoring.—The mere acquisition of a debt is not a taxable transaction, including debt acquired by a factor. The services related to debt recovery, litigation, and the management of the recovery of the amount due from debtors are taxable, including sales accounting services under a factoring arrangement and other services related to factoring.

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   14.8   Mixed supplies.—If an exempt or taxable financial service is incidental to a main supply, or if such a financial service is the main service, the rules in section 4 of the Act on mixed and incidental supplies apply.

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   14.9   Input tax deduction allocation rules.—Banks and other financial institutions that make both taxable and exempt supplies may claim input tax deductions under section 31(2) of the Act only on domestic acquisitions (including rentals) and imports used directly in making taxable transactions (section 31(4) of the Act). This means that input tax deductions are only allowable for purchases that are used directly for taxable transactions. Other providers of financial services are subject to the allocation rules in section 31 of the Act.

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   14.10   Records and other data.—Regardless of method used to allocate input tax deductions under section 31 of the Act, the registered person must retain records to substantiate the method used. The Comptroller may require financial service providers to submit statistical data on various product lines.

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   14.11   Insurance exemption.—The exemption for financial services extends to the premiums for insurance cover under an insurance policy.

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   14.12   Riders to insurance policies.—The premium attributable to riders attached to an insurance policy that is exempt from tax constitutes exempt services if the riders are only incidental to the provision of the insurance cover. Services covered in riders to exempt insurance policies that are not incidental to the insurance coverage are taxable to the extent that the independent supply of those services would be taxable. The Comptroller shall have the sole discretion to determine whether a non-insurance rider is incidental to the main insurance policy.

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   14.13   Issuer of an insurance policy.—The premium on an insurance policy is exempt only if the premium is charged on a policy issued by a person who is registered to issue such policies under the Insurance Act, Cap 12.08.

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   14.14   No exemption for warranties.—An insurance policy does not include insurance cover on a warranty in respect of the quality, fitness or performance of tangible property. A supply customarily provided in the form of a warranty that goods or services will perform as promised or the items can be returned or repaired is not an exempt supply if structured as an insurance policy.

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   14.15   Medical services.—Schedule 2, paragraph 2(b) of the Act exempts the supply of medical services. Medical services are exempt, whether provided with or without charge and whether paid by the patient or resident or any third party, if the medical services meet two conditions:

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      (a)     they are rendered in a qualified medical facility or by a qualified medical practitioner, or both; and

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      (b)     they qualify as exempt medical services as defined in Schedule 2.

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   14.16   Qualified medical facility.—For a service rendered in a facility to be an exempt medical service, the service must be rendered in a qualified medical facility. A qualified medical facility is the office of a qualified medical practitioner. It also includes a licenced hospital, maternity home, nursing home, convalescent home, or clinic.

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   14.17   Qualified medical practitioner.—A qualified medical service is exempt if it is provided by a qualified medical practitioner or under the supervision and control of a qualified medical practitioner. A qualified medical practitioner is a person who is registered as being qualified under the Health Practitioners Act or under the Registration of Nurses and Midwives Act to perform medical, dental, nursing, convalescent, rehabilitation, midwifery, paramedical, and other services.

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   14.18   Qualified medical services in general.—To qualify for the exemption, medical services must consist of qualified medical services, in a qualified medical facility, or medical services rendered by a qualified medical practitioner, or both. Medical services involve the diagnosis, treatment, prevention, or amelioration of a disease, including the promotion of mental health, but do not include services for cosmetic reasons other than those required in connection with a disease, trauma, or congenital deformity.

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   14.19   Qualified services in a qualified medical facility.—For purposes of paragraph 14.16 above, exempt medical services include the services provided to a dweller or patient by a qualified medical practitioner in a qualified facility, as well as meals and accommodations, nursing and personal care, and assistance with daily living activities to meet the needs of the resident or patient.

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   14.20   Exempt medical services.—For purposes of paragraph 14.15 above, exempt medical services include the following —

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      (a)     medicines and drugs that are administered in a hospital, maternity, nursing, or convalescent home, or clinic, for which there is no separate charge;

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      (b)     laboratory, x-ray, or other diagnostic services;

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      (c)     the use of operating rooms, case rooms, or anesthetic facilities, including necessary equipment or supplies;

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      (d)     the use of radiotherapy, physiotherapy, or occupational therapy facilities in rendering exempt medical services;

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      (e)     accommodation and meals (except in a restaurant or cafeteria available to persons other than patients or residents) provided to patients or residents in the course of receiving exempt medical services;

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      (f)     services rendered by the medical facility staff (including orderlies or technicians) in connection with exempt medical services;

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      (g)     dental, periodontal, and endodontal services rendered in connection with a disease, trauma, or congenital deformity, but not dentistry for cosmetic reasons;

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      (h)     ambulance services; and

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      (i)     psychoanalytic services.

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   14.21   Cosmetic medical services.—As defined by the Ministry of Health, cosmetic medical services constitute the following, and are therefore taxable —

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      (a)     Brow lifts;

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      (b)     Botox when used for anti-wrinkling;

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      (c)     Laser skin rejuvenation;

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      (d)     Cosmeceuticals;

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      (e)     Eyelash Enhancement;

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      (f)     Arm Lift (Brachioplasty) (Except for skin reduction after significant weight reduction);

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      (g)     Breast lift (Mastopexy);

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      (h)     Skin fillers -Collagen, Juvederm, Restylane;

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      (i)     Face lift (Rhytidectomy);

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      (j)     Facial peels used for wrinkle reduction;

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      (k)     Mineral Cosmetics;

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      (l)     Laser hair removal (exception clinical hirsutism);

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      (m)     Spider veins removal;

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      (n)     Thigh lift;

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      (o)     Neck lift (Cervicoplasty, platysmaplasty);

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      (p)     Cosmetic dentures (meaning with jewels or made of gold/silver);

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      (q)     Invisalign;

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      (r)     Lumineers;

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      (s)     Take home teeth whitening kits;

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      (t)     Zoom in-office teeth whitening;

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      (u)     Eyelid Surgery;

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      (v)     Microderm Abrasion;

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      (w)     Breast Reduction (except for medical conditions such as large breast lumps, breast cancer, chronic back pain);

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      (x)     Breast Augmentation;

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      (y)     Ear Surgery (Pinnaplasty);

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      (z)     Liposuction;

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      (aa)     Nose surgery

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   14.22   Services provided by a facility to aged, indigent or disabled persons that need care.—Schedule 2, paragraph 2(c) of the Act exempts services provided directly by a home to described categories of persons that need care. The exemption applies to the care provided to aged, indigent, infirm, or disabled persons. It covers meals and accommodations provided in kind by the facility, for example, services provided directly by a home for the aged or an institution for disabled persons, are exempt.

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   14.23   Veterinary services.—Schedule 2, paragraph 2(e) of the Act exempts the supply of veterinary services in respect of any live bird, livestock or other animal of a kind generally used as food for human consumption. The exemption covers the professional services rendered by a veterinarian registered under the Health Practitioner's Act. The exemption does not cover services rendered for domesticated animals like dogs, cats, and birds.

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   14.24   Education services.—Schedule 2, paragraph 2(h) of the Act exempts education services as defined in Schedule 2, paragraph 1 of the Act. Qualified charges for education services are exempt if the services meet two conditions —

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      (a)     they are specified in the Schedules; and

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      (b)     they are provided to students by a qualified educational institution.

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   14.25   Qualified educational institutions.—To qualify for the exemption, the services must be provided to students by a duly recognised —

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      (a)     pre-primary, primary, or secondary school;

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      (b)     technical or vocational school or college, community college or university;

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      (c)     educational institution established for the promotion of adult education, vocational training, technical education;

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      (d)     institution established for the education or training of physically or mentally handicapped persons; or

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      (e)     institution established for the training of sports persons.

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   14.26   Public and private institutions.—An educational institution within paragraph 14.25 above is qualified, whether it is a private school operating on a for-profit basis, or a non-profit organisation, church, charity, or a department of government.

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   14.27   Accreditation of educational institutions.—An educational institution within paragraph 14.25 above is a qualified institution only if the institution is recognised by the Ministry of Education. “Recognised” in this context means registered to the extent that there is registration in place for the institution in question. Otherwise “recognised” means accepted by the Ministry of Education as being a proper institution capable of providing and approved to provide education services.

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   14.28   Exempt education services.—Schedule 2 defines “education services” to include “tuition and instruction” The following categories of services qualify under this definition and are exempt education services —

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      (a)     courses of instruction provided to students at a qualified educational institution;

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      (b)     the administration of examinations, if provided by the educational institution or the State; and

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      (c)     charges for tuition, school facilities, and curriculum-related activities and instruction under part 14.29 below.

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   14.29   Qualified charges for tuition, facilities, and curriculum-related activities and instruction.—Qualified charges for tuition, facilities, and curriculum-related activities and instruction are —

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      (a)     instruction or tutoring related to a qualified course;

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      (b)     compulsory levies for facilities as part of a supply of exempt educational services;

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      (c)     student council fees, athletic fees, and other mandatory fees related to course registration;

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      (d)     charges for reports, library services, identity cards, record keeping and other administrative services provided by the educational institution and directly related to the supply of education courses; and

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      (e)     charges for course materials, the rental of curriculum-related goods by the supplier of the education (e.g., the rental of musical instruments), field trips directly related to the curriculum if not predominantly recreational.

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   14.30   Facility charges.—Qualified facility charges are charges for buildings, grounds, libraries, and computer, science and other laboratories.

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   14.31   Education services not covered by the exemption.—The exemption for education services does not cover the following education courses —

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      (a)     courses in video recording or photography or other hobbies, unless they are part of a degree- or diploma-granting program; and

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      (b)     courses, such as picture framing, cooking, and personal investment, that are designed to improve knowledge for personal purposes.

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   14.32   Education of religious workers.—Religious workers receiving education are treated as students for the purposes of education services exemption.

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   14.33   Day care, after-school.—

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   14.33.1   Day care and after school programmes.—Schedule 2, paragraph 2(i) of the Act exempts a supply of services by a day care business for pre-school children or older persons with physical or mental handicaps, after-school care provided in a pre-primary or primary school, and summer camp services for children under 18 years of age.

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   14.33.2   Services covered.—Supplies by a day care provider are exempt from tax to the extent that the charges are for the care of the pre-school child or the handicapped person while at the day care facility, and any meals and supplies provided at the facility. For example, if a person provides day care for a pre-school child and charges hourly, daily or other periodic rates that include the care of the child and meals at the facility, the charges are exempt from tax. Charges for the care of a child and meals in a pre-primary or primary school before or after school hours are exempt. Summer camp charges for accommodations, meals, and activities for children under 18 years of age are exempt from tax. Supplies of clothing, equipment, travel, and other goods or services not specifically listed as exempt herein are not covered by this exemption.

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   14.34   Exempt education services provided by a pre-primary, primary, or secondary school.—In addition to the aforementioned services exempt, exempt education services rendered by a pre-primary, primary, or secondary school include —

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      (a)     basic instruction, including special education courses;

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      (b)     fees or charges for a program before or after school that is operated by the school to the extent exempt as after-     school care under Schedule 2, paragraph 2(i) of the Act;

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      (c)     charges for the use of school musical instruments or sports equipment;

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      (d)     services rendered by students or their teachers as part of the instructional programme; and

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      (e)     charges for students to attend a school play, dance, field trip, or other school- sanctioned activity primarily for the students.

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   14.35   Exempt education services rendered by a university, community college, or technical college.—Exempt education services rendered by a university, community college, of technical college include in class and correspondence courses that qualify for credit toward a degree or diploma, whether or not the student is pursuing a degree or diploma program.

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   14.36   Exempt adult education, vocational training, technical education, and education or training of physically or mentally handicapped persons.—The education exemption for adult education, vocational training, technical education, and for the education or training of physically or mentally handicapped persons covers charges for —

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      (a)     adult education courses leading to a degree or diploma or courses that are likely to enhance employment-related skills of the students enrolled in the courses;

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      (b)     courses of study at a vocational school that develop or enhance a student's occupational skills;

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      (c)     courses leading to, or to maintain or upgrade, a professional or trade accreditation or designation recognised by the appropriate government accrediting agency; and

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      (d)     a certificate or examination in a course or program for accreditation or designation.

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   14.37   Employment-related skills.—Courses enhance employment-related skills if the course objectives specify those skills that students will acquire, and there is a reasonable expectation that the skills taught will be used by the students in their employment, businesses, professions or trades, rather than for recreational, hobby, artistic, or cultural purposes.

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   14.38   Supplies, other than course, not covered by the exemption.—The exemption for education services does not include —

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      (a)     the rental of facilities by an educational institution to an outside group;

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      (b)     commissions and other fees received from the placement of coin-operated machines on the institution's property; and

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      (c)     the sale of non-course material, such as items containing the school logo.

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   14.39   Dwelling and leases of land.—

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   14.39.1   Dwellings and leases of land for dwellings or agricultural purposes.—Schedule 2, paragraph 2(k) of the Act exempts from tax the sale of a residential accommodation (a dwelling), including the land attributable to the residential accommodation. The lease of a residential accommodation (including land for a residential accommodation) or the grant by an employer of a residential accommodation to an employee or officer holder is exempt under Schedule 2, paragraph 2(l)(iii) of the Act. The sale or lease of land used or to be used for agricultural purposes is exempt under Schedule 2, paragraph 2(m) of the Act. Other leases of real property, including land, are taxable.

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   14.39.2   Dwelling.—A “dwelling,” defined in Schedule 2, paragraph (1) of the Act includes buildings, structures, and other places or parts thereof that are used or intended to be used predominantly as places of residence or abode of natural persons, including appurtenances, but not commercial rental establishments. The land surrounding a dwelling complex, including the driveway, paths, gardens and landscaped grounds for the use and enjoyment of residents is part of the dwelling. A commercial rental establishment is defined in Schedule 2, paragraph (1) of the Act.

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   14.39.3   Input tax deductions.—Under section 31 of the Act, a registered person who leases new or used property as a dwelling is denied input tax deductions for tax on any costs attributable to the exempt lease of the dwelling.

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   14.39.4   Employer-provided dwelling.—When an employer provides a dwelling to an employee or office holder, and the benefit is limited to the recipient's period of employment, term of office, or other agreed period, the supply of the dwelling is exempt from tax. However, the same fringe benefit may be treated as a taxable supply by the employer in the course or furtherance of a taxable activity. The exemption takes priority. As a result, the employer under section 31 of the Act is denied input tax deductions for tax on costs attributable to this exempt fringe benefit.

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   14.39.5   Sale or lease of parking space in a dwelling complex.—The lease of a parking space in a dwelling complex as part of a lease of a dwelling is exempt.

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   14.39.6   Sales and leases of land for agricultural purposes.—Under Schedule 2, paragraph 2(n) of the Act exempts the sale or lease of land if it is used or to be used principally for agricultural purposes. To qualify for the exemption, the supplier must receive and retain written documentary evidence that the land will be used for an agricultural purpose. Any portion of the land used for a taxable activity is not covered by the exemption. An agricultural purpose includes activities related to livestock, and the cultivation of crops, seeds, plants, and trees. This exemption does not apply to the disposition or sale of the lease. The sale of agricultural land is exempt if the purchaser certifies in writing that the land will be used for agricultural purposes. The certification must be in the form approved by the Comptroller. The seller must submit this certification with the return for the period covered by the sale in the form and in the manner provided by the Comptroller.

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   14.40   Lotteries and games of chance.—Schedule 2, paragraph 2(o) of the Act exempts from tax supplies of games of chance conducted by non-profit organisations and lotteries operated by two lottery commissions. The lotteries that are exempt from tax are those conducted by the Saint Lucia National Lottery and the Windward Islands Lotteries Commission. The bets placed at the games of chance conducted by non-profit organisations and the sale of lottery tickets by these commissions are not subject to tax, and the non-profit organisations and lottery commissions are not entitled to deduct input tax on winnings paid out or on acquisitions used in making these exempt supplies.

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   14.41   Transportation of goods and passengers by land.—

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   14.41.1   Scope of exemption for transport of passengers supplied locally.—Schedule 2, paragraph 2(q) of the Act exempts the supply of transportation of passengers within Saint Lucia by any mode of transport. The exemption applies whether the transport is by land, sea or air once it is from one point within Saint Lucia to another point within Saint Lucia. It also applies regardless of whether the passenger is resident or not. The exemption applies when the major element of a supply is transport from one place to another. A tourist taking a taxi ride from an airport to a hotel is exempt from tax. If the transportation represents an incidental component of the main supply and is not an aim in itself, the supply is classified on the basis of the main supply. For example, the supply of a sightseeing tour within Saint Lucia is a taxable supply. The domestic transport is treated as incidental to the taxable sightseeing activity, and therefore no portion of the tour or sightseeing charge is considered as attributable to exempt local transportation.

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   14.42   Trade Unions.—

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   14.42.1   Services by trade union to members.—Schedule 2, paragraph 2(s) of the Act exempts a supply of services by a Trade Union to a member or to another trade union of services if the supply is made in the ordinary course of its trade union activities. For example, the exemption applies to the representation of members in arbitration, but not to any commercial activities by a union that compete with private enterprise. The exemption also covers organisations that perform services in the nature of the services supplied by a trade union, but because of legal restrictions cannot be constituted as trade unions, such as the Police Welfare Association and the Saint Lucia Fire Service Association for example, as well as any other organisations accepted as falling within this description by the Ministry of Labour.

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   14.42.2   Supplies not covered.—Services supplied by outside suppliers directly or indirectly to the union or a union member are not exempt. Goods supplied by the union to its members are not covered by the exemption.

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   14.43   Supplies of specified Agricultural inputs.—

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      (a)     Schedule 2, paragraph 2(v)(i) of the Act exempts the supply of agricultural inputs classified as seedlings, cuttings, and fertilizers. These items are exempt if supplied in a form used for cultivation. This category includes not only seeds, but bulbs and roots when provided for cultivation. Fertilizers formulated for agricultural use are exempt as well.

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      (b)     Pesticides, insecticides, and other treatments approved for agricultural use. Schedule 2, paragraph 2(v)(ii) of the Act exempts pesticides, insecticides, and other treatments that the Ministry of Agriculture declares to be one of these preparations formulated for agricultural use that qualify under this paragraph.

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      (c)     Herbicides, fungicides and nematicides. Schedule 2, paragraph 2(v)(iii) of the Act exempts agricultural inputs that are declared as herbicides and fungicides by the Ministry of Agriculture.

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      (d)     Animal feed other than for pets. Schedule 2, paragraph 2(v)(iv) of the Act exempts animal feed. The exemption is limited to products intended and sold for the feeding of livestock, poultry, fish, or wild animals (including wild birds not generally kept as household pets). Stock lick and substances used as a stock lick are exempted, whether or not they possess medicinal properties. The exemption does not apply to food for domesticated animals generally held as pets. For example, this exemption does not apply to food sold for dogs, cats, and birds.

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      (e)     Packing film. Schedule 2, paragraph 2(v)(v) of the Act exempts supplies of packing film that are specifically designed for use in transporting unprocessed agricultural products.

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      (f)     Agricultural and horticultural machinery. Schedule 2, paragraph 2(v)(vi) of the Act exempts the supply of machinery and equipment that is specifically designed or adapted for use in agriculture and horticulture.

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   14.44   Supplies of specified fishing inputs.—Schedule 2, paragraph 2(w) of the Act exempts a list of inputs used in the fishing business. The inputs listed as exempt supplies include: fibreglass and wooden boats, anchors, grapnels, G.P.S., compass, V.H.F. radio, fish finder, flare guns and flares, life vests, life ring, buoys and floats, monofilament fishing lines, gaff, harpoons, outboard engines up to 100 hp., inboard diesel engines, winches, spools, line haulers, jigging reels and propellers. The exemption applies to the listed items used in the fishing trade. It is the Ministry of Agriculture that may declare or disallow a fishing input as being for use in the fishing trade.

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   14.45   International transport services pertaining to goods or passengers.—Schedule 2, paragraph 2(x) of the Act exempts the supply of international transport services. Schedule 2, paragraph 1 of the Act, defines “international transport services.” They involve the service, including ancillary transport services, of transporting passengers or goods by road, water, or air on an international journey. Services, including ancillary transport services within the definition of international transport services, includes the storage of goods within Saint Lucia by an export freight company (to be transported by air or ship) until the goods are accumulated from a number of domestic exporters and then transported in bulk to the dock or airport.

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   14.46   Bread.—Schedule 2, paragraph 2(cc) of the Act exempts the sale of bread. The exemption covers bread and rolls that do not contain any added ingredients or sweeteners. For example, the exemption covers basic bread and dinner rolls, but not bread like bagels or pita bread or bread with icing, fruit, or chocolate added on top or inside the product.