A Bill to amend the International Business Companies Cap 12.14 was recently passed in the lower house of parliament.

    The International Business Companies Amendment No. 2 Bill seeks to ensure that a newly formed head office company as of 1 January 2019 should not be given preferential treatment but to be taxed in accordance with the Income Tax Act. The Bill was tabled by the Hon. Prime Minister Allen Chastanet.

“Stakeholders requested that an avenue to opt out of being grandfathered be given to IBCs incorporated prior to 2019. The amendment for 2018 provided for companies incorporated before 2019 to continue benefitting from the tax exemptions until June 30, 2021 (grandfathered period). The insertion of 5(B) now gives the options to these companies to no longer be a grandfathered company,” The Prime Minister asserts. “This is important because there are some companies who’ve benefitted from being grandfathered and those companies now want to move much quicker and move into the new regime. This amendment could allow them to convert from being a grandfathered company which is applicable until 2022 and move much quicker into being a regular company and benefit from the new regime,” The Prime Minister adds.

    A grandfather clause is an exemption that allows persons or entities to continue with activities or operations that were approved before the implementation of new rules, regulations or laws. According to the Prime Minister, these companies would now be liable to pay taxes on their local income and benefit from other taxations in place for international revenue.