If you are one of the thou­sands of peo­ple res­i­dent in T&T who are earn­ing for­eign ex­change, the law says those earn­ings are li­able to be taxed in this coun­try, ac­cord­ing to two tax ac­coun­tants at lo­cal firms.

The is­sue of the tax­a­tion of for­eign earn­ings was raised on Wednes­day at a Joint Se­lect Com­mit­tee (JSC) on For­eign Af­fairs that was look­ing in­to the ef­fec­tive­ness of T&T’s cul­tur­al diplo­ma­cy and op­por­tu­ni­ties for strength­en­ing the coun­try’s cul­tur­al and tourism prod­ucts.

The chair of the JSC, Min­is­ter of Trade and In­dus­try Paula Gopee-Scoon, lament­ed the fail­ure of the Min­istry of For­eign and Cari­com Af­fairs and the Min­istry of Tourism, Cul­ture and the Arts to stream­line and for­malise cul­ture as a busi­ness.

That point was tak­en up by Unit­ed Na­tion­al Con­gress (UNC) MP for Na­pari­ma, Rod­ney Charles, who sug­gest­ed that rev­enue could be raised by tax­ing the chut­ney, so­ca and ca­lyp­so artistes who per­form through­out the re­gion and the world as well as col­lect­ing tax­es on ma­te­ri­als that are be­ing im­port­ed to make mas cos­tumes.

On Thurs­day, Min­is­ter of Tourism, Cul­ture and the Arts, Ran­dall Mitchell, told Guardian Me­dia that the Gov­ern­ment had no in­ten­tion of tax­ing ei­ther artistes who per­form abroad or the im­port­ed ma­te­ri­als used to cre­ate Car­ni­val cos­tumes.

“Now, whether or not this is a spe­cif­ic pro­pos­al, and a spe­cif­ic fis­cal mea­sure to be levied by a UNC gov­ern­ment, is a mat­ter for the UNC. How­ev­er, let me state it cat­e­gor­i­cal­ly that there was nev­er and present­ly there is no rec­om­men­da­tion, sug­ges­tion, plan, or any faint idea by the Min­istry of Tourism, Cul­ture and the Arts for the im­po­si­tion of any ad­di­tion­al tax­es on any cul­tur­al prac­ti­tion­er per­form­ing lo­cal­ly or abroad...

“The state­ments made (on Wednes­day) by mem­ber Rod­ney Charles at the Joint Se­lect Com­mit­tee are in­deed un­for­tu­nate and, in fact, run con­trary to the work and the col­lab­o­ra­tion tak­ing place be­tween the Min­istry of Tourism, Cul­ture and Arts, the Min­istry of For­eign and Cari­com Af­fairs, and many of the em­bassies to en­sure that there is smooth pas­sage for artistes to get their work per­mits, work visas, to work and ex­port the cul­ture abroad,” Mitchell said.

But in a news re­lease on Thurs­day, the Min­istry of Tourism said, “All cul­tur­al prac­ti­tion­ers, in­clud­ing artistes work­ing both lo­cal­ly and abroad, are present­ly sub­ject to the tax pro­vi­sions of the coun­try, as are all oth­er cit­i­zens.”

On Fri­day, Min­is­ter of Fi­nance, Colm Im­bert, is­sued his own news re­lease re­fer­ring to “a mis­tak­en be­lief that a JSC is a pol­i­cy-mak­ing body and that a JSC has the pow­er to change our tax laws or to ini­ti­ate such a process.”

He added that for the avoid­ance of doubt, par­lia­men­tary com­mit­tees, “while es­sen­tial for our sys­tem of democ­ra­cy and for trans­paren­cy in mat­ters of State, are sim­ply em­pow­ered to en­quire in­to, and ex­am­ine and re­port on, var­i­ous mat­ters.

“Un­like the Cab­i­net, JSCs are not re­spon­si­ble for ini­ti­at­ing and de­cid­ing on pol­i­cy or the di­rec­tion and con­trol of the Gov­ern­ment of Trinidad and To­ba­go and a JSC cer­tain­ly can­not for­mu­late a plan to im­pose new tax­es.”

Ref­er­enc­ing the sug­ges­tion of tax­ing artistes, on Thurs­day one tax ac­coun­tant at a lo­cal ac­count­ing firm said, “That is the most ridicu­lous thing I have ever heard. As Trinidad na­tion­als, you are tax­able on your world­wide in­come. If (artiste name called) goes to sing at Madi­son Square Gar­den (in Man­hat­tan), as a Trinida­di­an who is res­i­dent and domi­ciled in this coun­try, he is tax­able on his world­wide in­come.

“Are they say­ing that they are go­ing to en­force it, be­cause the law cer­tain­ly cov­ers them on that. Were they turn­ing a blind eye to it in the past?”.”

The tax ac­coun­tant, who re­quest­ed on anonymi­ty in or­der to ex­plain the is­sue, re­ferred Guardian Me­dia to sec­tion 5 of the In­come tax Act, which states, “In­come tax shall, sub­ject to the pro­vi­sions of this Act, be payable at the rate or rates spec­i­fied here­after for each year of in­come up­on the in­come of any per­son ac­cru­ing in or de­rived from Trinidad and To­ba­go or else­where, and whether re­ceived in Trinidad and To­ba­go or not in re­spect of:

(a) gains or prof­its from farm­ing, agri­cul­ture, forestry, fish­ing or oth­er pri­ma­ry ac­tiv­i­ty;

(b) gain or prof­its from op­er­a­tion of mines or the ex­ploita­tion of nat­ur­al or min­er­al re­sources;

(c) gains or prof­its from any oth­er trade or busi­ness;

(d) gains or prof­its from the prac­tice of any pro­fes­sion or vo­ca­tion or man­age­ment charges for the pro­vi­sion of per­son­al ser­vices and tech­ni­cal and man­age­r­i­al skills; (e) gains or prof­its from any em­ploy­ment or of­fice in­clud­ing pen­sions or emol­u­ments...”

He said T&T’s tax laws per­tain­ing to world­wide in­come ap­ply not on­ly to artistes, but al­so to sports­men, such as crick­eters who are en­gaged in fran­chise crick­et around the world

Asked what would be the sit­u­a­tion of a Trinidad res­i­dent, who has a Green Card (which al­lows peo­ple to work legal­ly in the US), the tax ac­coun­tant said, “That is a lit­tle more com­plex. If you have a Green Card, the US is tax­ing you and you run the risk of be­ing dou­ble taxed.”

The ex­pert ex­plained that “prop­er” tax treaties have what is called tiebreak­er rules, where the tax au­thor­i­ties look to see where there are the clos­est ties. He said T&T’s Dou­ble-Tax­a­tion Treaty with the US is from 1971 and does not have that clause.

On the is­sue of a T&T res­i­dent who has res­i­den­cy in an­oth­er coun­try, the sec­ond tax ac­coun­tant told Guardian Me­dia, “Typ­i­cal­ly, what hap­pens is that your prin­ci­pal coun­try of res­i­dence has the right to tax your in­come on a world­wide ba­sis. Res­i­den­cy is more im­por­tant than be­ing domi­ciled per se.

“What hap­pens, for ex­am­ple, is that if you are an ex­pat, you might be sec­ond­ed to work in a par­tic­u­lar coun­try for a year or two. It does not mean you have changed your domi­cile, but your tax res­i­den­cy sta­tus, which is usu­al­ly by the num­ber of days in a coun­try, usu­al­ly 183 days or half a year, is go­ing to change be­cause you are phys­i­cal­ly work­ing in an­oth­er lo­ca­tion. For tax pur­pos­es, the key point is re­al­ly around res­i­den­cy.”

Artistes or sports­men who earn in­come in the US “would typ­i­cal­ly get a tax cred­it, un­der the treaty in T&T, for any US tax­es paid in the US.”

The tax ac­coun­tant said in some ju­ris­dic­tions there is a waiv­er on the im­po­si­tion of tax­es on artistes and sports­men be­cause they are in for­eign coun­tries for on­ly a short pe­ri­od. Even in such a case, said the tax ex­pert, the ex­pec­ta­tion is that that in­come would be re­port­ed in the T&T, and the tax paid on it.

Ques­tions were sub­mit­ted to the chair of the Board of In­land Rev­enue on Fri­day, but they were unan­swered up to press time.