Trinidad and Tobago: Tax measures in 2027 budget
Proposals would revise rules for tax losses, withholding tax, digital services, exempt income, petroleum companies, and VAT compliance.
October 14, 2026
The Ministry of Finance on October 12, 2026, presented the 2027 National Budget. Key tax proposals include:
- Tax losses: Limit the use of carried-forward tax losses for businesses to 75% of chargeable profits, effective January 1, 2027
- Withholding tax: Increase withholding tax on distributions to nonresident individuals and companies from 8% to 10%, and on distributions to nonresident parent companies from 3% to 5%, effective January 1, 2027
- Cross-border services: Amend the definition of “payments” for withholding tax purposes, potentially expanding the application of withholding tax to management, technical, and other prescribed services provided by nonresidents, effective January 1, 2027
- Digital services: Apply the standard VAT rate of 12.5% to all supplies of digital and remote services supplied by nonresident providers to persons in Trinidad and Tobago and introduce simplified electronic VAT registration, collection, and remittance, effective March 1, 2027
- Exempt income: Amend Section 10 of the Income Tax Act to disallow deductions for expenses incurred in earning exempt income, effective January 1, 2027
- Petroleum companies: Increase the unemployment levy on taxable profits from 5% to 8%, effective January 1, 2027
- VAT compliance: Introduce a flat penalty of TT$100 for every two-month period that VAT returns remain outstanding (effective January 1, 2027) and make electronic filing through the Inland Revenue Division's GENTAX system mandatory for all taxpayers (effective date not specified)
Read an October 2026 report prepared by the KPMG member firm in Trinidad and Tobago