EU puts Saint Lucia on notice

EU puts Saint Lucia on notice
NIC building Waterfront Castries.
Waterfront government buildings, Castries.

(SNO) — The European Union (EU) has written to the Allen Chastanet-led government that it should abolish a tax preferential regime for foreign companies working here, by December 31, 2019, or the island could be placed on the EU’s list of non-cooperative jurisdictions.

The regime, which gives foreign companies and their employees certain tax exemptions, was described as harmful by the EU.

In a letter to Chastanet, dated February 1, the EU thanked Saint Lucia for its cooperation so far on tax good governance standards.

The letter pointed to measures enacted by the island to abolish, by the end of 2018, a preferential tax measure that the Council of European Union had considered harmful in December 2017.

However, it pointed out that the EU’s Code of Conduct Group has identified the introduction by Saint Lucia of a new preferential tax measure for foreign income which it said would have the same harmful effect.

The government in 2017 had amended the International Business Act, giving foreign companies and their employees tax exemptions ranging from zero to to one percent of their income, in stark contrast to local businesses which have to pay up to 30 percent.

“This measure was assessed by the Code of Conduct Group at its meeting of January 30, 2019 and deemed to have similar harmful effects as the harmful regimes that Saint Lucia has abolished at the end of 2018,” the letter stated.

It went on to say that the EU would welcome a commitment “at a high political level that Saint Lucia will amend or abolish this regime by the end of 31 December 2019, without any grandfathering mechanism”.

“In this case, the Code of Conduct Group will not recommend to the Council of the EU to include Saint Lucia in the EU list of non-cooperative jurisdictions for tax purposes as long as no other criteria have been failed,” the letter reads.

It said that in order to demonstrate that Saint Lucia has made meaningful commitments at the highest political levels to address the deficiencies identified the by EU in the new tax regime, the EU seeks consent to publish the commitment letter on the Council’s website.

“This will ensure the transparency of the process,” the letter stated.

The EU made it clear that replacements with similar effects, as the one that is now in place, or the one abolished, will not be accepted.

“Finally the Code of Conduct Group would like to inform Saint Lucia that no further replacement with measures of similar effects or delays will not be accepted when assessing at the beginning of 2020,” the letter said.

Last year, Saint Lucia was among a number of Caribbean countries with Citizenship by Investment Programs that was blacklisted by the Organisation for Economic Cooperation and Development (OECD).

The OECD said such programs threaten international efforts to combat tax evasion.

A report by the OECD stated that a second citizenship can be potentially misused to hide assets abroad.


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  1. It is the duty of the regime to sit with the EU. Next, it is the duty of the government to put it to the public, what is being asked of the government in terms of compliance or doing business with the EU.

    Yes. It is time to dump our foolish partisan politics and discuss real issues, Saint Lucians. It is past the time to dump the ro-ro politics of our political dinosaurs.

    This matter before this nation should not be negotiated in secret. No. Never. There are economic issues at stake. There are sovereignty issues at stake. There are national survival issues at stake.

    Do we have people in Saint Lucia, or are there Saint Lucians living abroad with proven, and track record of successful high-level negotiating skills that could be co-opted or tapped for this? What is the value of CARICOM?

    We are all giddy celebrating so-called independence. Where are our trained and talented people to help us navigate the shoals of today's evolving globalized world? Where are they? We celebrate Nobel Laureates Week and quite awkwardly --- (Wait for it! -- we dance. Pathetically, we just dance.

    Why are we so burdened with so many nitwits in our high places and hierarchies, whose only skill is to repeatedly parrot the brainless piffle that all they want to do is "to serve the people"? Is that all there is to independence?


  2. You guys do know the EU is asking Saint Lucia to STOP BEING A TAX HAVEN to foreign companies right ? Foreign companies earn so many tax exemptions here like not paying tax for the first ten employees you hire.


    • I admit i misunderstood what was said. But still, the government doesn't give a damn about the people. Which is why outside institutions have to come in and tell them it's wrong. If they were acting and thinking morally with the people in mind, they wouldn't be in that position.


  3. Please write back to the EU and ask them to clarify their own preferential tax regimes, so that the Caribbean could be better guided with regards to what the EU wishes to see implemented in the region. These are the very states who shield Russian oligarchs and their billions. Ignore the EU promptly, let them know that their high-handed tactics as evident in the negotiations on Brexit is not welcome here. Yes, we are watching your treatment of the UK and we are non too pleased.


  4. I know right. I don't know much about doing business, bt they are basically blackmailing us. If the government doesn't cut tax for the foreign businesses, they will list us as uncooperative and unfit for doing business. They want to make things easier for the foreigners and not the locals. And the government will most likely kiss their asses.


  5. This is so ridiculous I’m not sure what to say. Time and time again we see this group taking from the locals to give deals to foreign entities. They are building their wealth on the backs of poor St.Lucians. People open your eyes and smell the coffee.
    The locals are not in the same class as the foreigners doing business in St.Lucia. Shame on you guys and shame on us for letting this happen.


    • I know right. They are basically blackmailing his. If the government doesn't cut taxes for these foreign businesses, we will be put on their list of uncooperative countries who didn't conform to their demands. They know that a small country like us need those investments. They're bullying us into making things easier for nose foreign investors, meanwhile the locals have to struggle to keep their businesses afloat. The government will most likely kiss their asses cause all they junk about is money. They don't think outside the box. They don't do anything that benefits locals in the long run.


      • This article is not saying that. it is actually saying that the goverment is allow foreign companies to operate here in St.Luica tax free or at a low rate of 0 to 1% tax. Where as the local companies meaning St. Luican owned companies have to pay 30% in Tax.
        Hope this brought you some more clarification.


        • Thanks, I can admit that I was wrong, but the corrupt government is the reason why outside institutions have to tell them what they're doing is wrong.


        • SO WHATS YOUR ARGUMENT COMMRADE ??? That been said local business does not pay ANYTHING NEAR to what foreign companies are ask to pay PLUS VAT we have no choice than to pass on our expenses to the consumer. This should not even be a partisan issue if you are a business owner big or small such as myself this to you should be a NATIONAL OUTRAGE. At the end of the day when you close that cash register and you do accounts payable and accounts received it's your bottom line that's feeling it and these are the things St Lucians don't understand.


          • Why are you mad? I already admitted that I misunderstood. I was agreeing with what the other commenter said, and simply saying that its a shame that outside institutions have to tell our government that what they are doing is wrong. I wasn't making an argument.


    • Well said Boss ! Well said indeed I been blasting it here on the United Worthless Party web site for a while but intensity for pass week I am not surprise NOT ONE BIT classic Chastanet Economics 101. You think they care about poor people dream on Allen Chastanet is about the business elite like himself with mindset that crumbs of his economic policies will trickle down to us poor and working poor st Lucians. Imagine THEY THE FORINGNERS ARE ALLOWED TO PAY ZERO TO ONE PERCENT WHILE A LITTLE MAN LIKE ME WITH A SMALL BUSINESS PAYING 30 PERCENT for the UWP hacks they pumping their fist everyday he is the best PM ever woopie woopie he is doing a great job now watch the slippery slope they can run but they can't their money anymore so if they can't hide their money why come like Congress woman Freshman tweeted its all about the Benjamin's.


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