Trinidad and Tobago provides a number of incentives mainly to promote the establishment of manufacturing and export operations, as well as tourism projects such as hotels and resorts. The main incentives include:

Fiscal Incentives Act

Trinidad and Tobago's Fiscal Incentives Act provides incentives for approved manufacturers incorporated in the country with a minimum capital investment of TTD 50 million.

The incentives include:

An exemption from customs duties and VAT on imports for the construction of the approved project, including raw materials, machinery, and equipment; and
Tax exempt dividend distributions, although the relief for dividends to non-resident shareholders is limited to the amount exceeding the liability in their home country.

Import Duty Concessions

Manufacturing and processing companies incorporated in the country that are BIR and VAT registered are provided import duty concessions on the import of items such as raw materials, machinery, equipment and packaging materials, which are required for carrying out production activities in the country.

Incentives on the Construction of Multi-Storey Car Parks and Commercial Buildings

Rents, gains or premiums received from letting-out or initial sale of newly constructed multi-storey car parks and commercial buildings, the construction of which started on or after 1 October 2012, are exempt from corporate tax up to 31 December 2025. To be eligible for the incentive, the commercial building or multi-storey car park must satisfy the requirements of the development planning standards.

Tourism Incentives

Trinidad and Tobago provides incentives for approved tourism projects, including hotels, resorts, etc. The incentives include:

Tax holiday for up to 7 years;
Exemption from customs duties for the construction of the approved project;
Accelerated depreciation allowances after the holiday period for construction costs;
A capital allowance in respect of approved capital expenditure incurred for a new tourism project or expansion of an existing tourism project; and
Carry-forward of losses incurred in an approved project during the tax exemption period.

Special Economic Zones

On 31 January 2022, Trinidad and Tobago introduced partial proclamation of a new Special Economic Zone (SEZ) regime followed by the full proclamation of the SEZ Act 2022 on 5 July 2024.

The full proclamation of the SEZ Act repealed the Free Zones Act and brought into effect the SEZ Regulations, 2023. However, under the transitional provisions, entities registered under the Free Zones regime prior to 31 December 2018 can continue to benefit from the regime until 31 December 2024. These entities are granted 6 months’ time to transition to the new SEZ Act.

The new SEZ regime provides specially designated zones, a robust institutional framework, and a dynamic incentive framework. Under the new regime, an entity can be licensed to carry on activities as a SEZ Operator (licensed to manage a SEZ), or a SEZ Enterprise (licensed to carry out business in a Special Economic Zone) or a Single Zone Enterprise (licensed to carry out activities in a Zone which it must manage and in which it is the only business in operation).

The types of SEZs (SEZ Enterprises or Single Zone Enterprises) include:

Free Port -A duty-free area, located at a port of entry where imported goods may be unloaded for warehousing, repackaging or processing of imported goods for value-adding activities, and logistics services and sales;
Free Trade Zone - A duty-free area that accommodates specific activities targeted for international trade;
Industrial Park - A purpose-built industrial estate that leverages domestic and foreign fixed direct investment in value-added and export-oriented manufacturing industries.
Specialized Zone - A place designated for specialized activities including manufacturing, maritime services, aviation services, fishing and fish processing, agriculture and agro-processing, information and communications technology, creative industries, financial services, medical tourism services, renewable energy, logistics and distribution, and business process outsourcing.
Development Zone - An area where activities are focused on the development of a specific geographic region with emphasis on factors such as employment, skills training, entrepreneurship and rural development and overall social and economic development of the area.

Several factors determine the eligibility for the tax incentives under the SEZ regime, including the type of license, the size of the company, the nature of operations, the value of new investments in the first two years of operations, the number of persons employed, and the type of zone in which the company operates.

The incentives for companies operating in a Special Economic Zone include:

Exemption from VAT on goods supplied and services provided to the SEZ;
Exemption from customs duties on the import of approved capital goods, spare parts, raw materials, stock in trade, and other articles used in the SEZ; and
A reduced corporate tax rate of 15% and property tax exemption for companies operating in an Industrial Park or a Specialized Zone or a Development Zone.

Agro-Processing Tax Relief

In 2017, the government announced tax relief measures for agro-processing operations in order to stimulate the local agricultural sector. Under this measure, income from agro-processing activities will be tax free if the following conditions are met:

At least 75% of the processing of agricultural products must be done in Trinidad and Tobago; and
75% of the ingredients must be produced or harvested locally.

Incentives for Small and Medium-Sized Businesses Listed on the Junior Stock Exchange

The Small and Medium-Sized Enterprises (SME) Market or Junior Stock Market was introduced in 2012 in line with the vision of The Trinidad and Tobago Stock Exchange (TTSE) to provide SMEs in Trinidad and Tobago an opportunity to raise capital on the domestic stock market as an alternative source of financing for capital expansion of their businesses.

SMEs desirous of listing on the Junior Stock Exchange are provided a 100% exemption from corporate tax, green fund and business levy for the first 5 consecutive years of listing on the TTSE and a 50% exemption for the next 5 years.

Eligibility conditions:

The company must be incorporated with limited liability in Trinidad and Tobago or in any other Caribbean Community (CARICOM) country;
The company has never been listed on any market of TTSE or on any other Exchange; and
The company is not an associate or a subsidiary of a company listed on any market of the TTSE or on any other Exchange.

Incentives for Energy Companies

A 150% allowance is granted to a company in respect of expenditure incurred on energy audit for the design and installation of energy-saving systems by engaging certified energy service companies.

An additional allowance is granted to such certified energy service companies that have acquired plant and machinery for the purpose of conducting energy audits to the extent of 75% of the cost incurred in the year of acquisition.

Energy companies are eligible for investment tax credit at the rate of 30% (effective 1 January 2023, previously 25%) under the Petroleum Tax Act for:

Investment in approved development activity in mature marine oil fields;
Investment in approved development activity in mature land oil fields; and
For acquisition of machinery and plant for use in approved enhanced oil refinery projects.

Effective 1 January 2020, the following incentives have been restricted for energy exploration companies:

20% capital allowance for expenditure on plant or machinery for 5 years commencing in the year of expenditure (previously 50% allowance in the first year, 30% in the second year, and 20% in the third year); and
Carry forward losses of up to 75% (previously 100%) of taxable profit per year.

Cybersecurity Investment Tax Allowance

Effective 1 January 2024, a cybersecurity investment tax allowance is introduced for qualifying companies investing in cybersecurity measures. The allowance provides a tax deduction of up to TTD 500,000 for investment in cybersecurity software and network security monitoring equipment during the period from 1 January 2024 until 31 December 2025.

Eligibility conditions include:

The company must be registered and in good standing with the Registrar General's Company's Registry;
The company must be the end user of the cybersecurity software or network security monitoring equipment; and
The expenditure must be made within the calendar years of 2024 and 2025.

Additional conditions include restrictions on resellers, vendors, and distributors, as well as specific considerations for VAT registered and non-registered companies.

On 4 March 2024, the Trinidad and Tobago tax authorities issued guidance on the cybersecurity investment tax allowance, providing information on the specific eligibility criteria, important standards, software & hardware categories relevant to cybersecurity investments and FAQs.

Other Incentives

The following allowances are granted based on the actual expenditure incurred but not exceeding TTD 12 million in aggregate:

100% deduction allowance for expenditure incurred in respect of an artistic work;
100% deduction allowance for expenditure incurred towards sponsorship of sporting activities or events or sportsmen;
150% deduction allowance for sponsorship of audio, visual, or video productions; and
150% deduction allowance for sponsorship of the fashion industry;

Additionally, companies can claim an aggregate allowance of up to a maximum of TTD 2 million with respect to sums paid to finance sporting activities and artistic works not related to its own business;
A 150% deduction is granted for expenses incurred by resident entities to promote the expansion of existing markets and/or the creation of new ones for the export of specified services or locally produced goods. Effective 1 January 2020, the benefit of the 150% deduction is extended to promotional expenses incurred by first-time exporters into the CARICOM region;
A 140% deduction allowance is granted for actual expenditure incurred on Research and Development activities, up to TTD 3 million;
Companies having core business as technology solution and digitization are subject to a 50% reduced corporation tax rate on the first TTD 100,000 of taxable income in 2022 and on the first TTD 200,000 of taxable income in 2023;
A 30% allowance is granted for the actual expenditure incurred on carbon capture and storage and enhanced oil recovery, up to a maximum of TTD 500,000;
A 130% wear and tear deduction is granted for expenditure incurred on acquiring plant, machinery, and equipment (excluding installation) and for providing compressed natural gas (CNG) kit and cylinder installation service; and
A 150% wear and tear deduction is granted for the expenses incurred on the acquisition of solar heaters, wind turbines, and photovoltaic systems.

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