Turnover tax is charged on revenue, not profit, and it cannot be reclaimed on your inputs. That combination is what surprises people.
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Sint Maarten's turnover tax, known locally as BBO and commonly abbreviated TOT, is charged at 5% on goods delivered and services supplied inside the territory. Because input tax cannot be offset, it compounds at each stage of a supply chain, so a business buying from local suppliers is charging 5% on a cost that already contains someone else's 5%.
Turnover tax cannot be reclaimed on inputs, which means it accumulates along a chain rather than washing out. An importer landing goods at 100 and adding margin charges 5% on the way out. The wholesaler buys at that tax-inclusive price, adds its own margin, and charges 5% on a base that already contains the importer's tax. By the time the goods reach a retail customer, the embedded tax is meaningfully more than 5% of the original value. For a business buying locally rather than importing directly, that embedded cost sits inside the purchase price and is invisible on the return.
Yes. A return is due monthly even with nil turnover, and the nil return is the one businesses most often forget, which is precisely why it is a common source of penalties for new entrepreneurs.
No. Input tax cannot be offset, which is what makes turnover tax behave differently from a VAT and why it compounds through a supply chain.
The charge attaches to goods delivered and services supplied inside the territory. Where the supply happens matters, and cross-border service arrangements need looking at specifically.
It is the rate published in CaribTax's guidance and by the Belastingdienst at the time of writing. Rates change, so confirm before you file. The rate is editable above for that reason.
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