The lack of a double taxation agreement with Suriname is hampering the growth of Trinidad and Tobago business with that country, a view shared by several energy service companies which must pay taxes to both the Surinamese government and to the government of Trinidad and Tobago.
The double taxation agreement says that profits resulting from business activities are only taxable by the member state where those activities are carried out.
The agreement has been signed by Trinidad and Tobago, Antigua and Barbuda, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. For energy operators, business activities include construction in progress at any place or facility where natural resources are extracted or exploited.
Suriname became a member of CARICOM in 1995 and is not a signatory to the double taxation agreement of 1994.
For Trinidad and Tobago firms operating in Suriname, double taxation is a financial burden that undermines their competitiveness. Moreover, it is a trade barrier for smaller energy services companies trying to penetrate the Surinamese market.
Double taxation treaties are not abnormal and are allowed within World Trade Organization (WTO) rules. But the Energy Chamber has been lobbying to replace double taxation agreements altogether with a bilateral treaty between Suriname and Trinidad and Tobago.
Failing that, the next best option — and the one that might provide the quickest relief — is an amendment to the double taxation order to include Suriname. Either option would require CARICOM’s approval.
Energy Chamber CEO Dax Driver said after a trade mission to Suriname in June that the Surinamese were open to a double taxation agreement since there was limited risk to them.
“The important thing here is to bring relief to local firms now,” Driver said. “There is an elephant in the room and we have to act quickly.”