Special rates in the TOT Ordinance
A specific provision regarding the daily rates for timeshare will be introduced in the TOT Ordinance, which will be differentiated by the size of the time share units. It is unreasonable that an owner of a small timeshare studio pays the same amount of tax as an owner of a 3 bedroom timeshare unit. The introduction of a differentiated daily rate has already been discussed with Mr. Jim Rosen, vice-chairman of the SMTA, earlier this year.
In comparison to other Caribbean jurisdictions, the current 5% roomtax of Sint Maarten is relatively low (Aruba 9.5%, Anguilla 10%, Antigua and Barbuda 8.5%, Bahamas 12%, Barbados 8.75%, Curaçao 7%, Dominican Republic 23%, Grenada 8%, Haiti 10%, Jamaica 15%, Trinidad and Tobago 10%). In the opinion of the Minister of Finance, there is still some room for increasing the rate without harming the tax competitiveness of Sint Maarten's hotel industry.
Car rental companies are currently subjected to 5% car rental tax and Turnover Tax. As opposed to the hotels and timeshare, an exemption is not provided in the TOT Ordinance to prevent double taxation for car rental activities. As a result, car rental companies have to file a tax return for both the car rental tax and Turnover tax and are taxed twice on the same turnover. Abolishing the car rental tax will significantly lower the administrative burden and make the tax system fairer.
Financial impact study
Currently, a financial analysis is being made to determine the budgetary impact of this and other draft legislation on the government's coffers.
