90% personal tax cr...
 
Notifications
Clear all

90% personal tax credit?

 

nautyrn
(@nautyrn)
Active Member
Joined: 7 years ago
Posts: 14
December 14, 2015 2:48 pm  

Does anyone ACTUALLY get this? I am researching relocating and, of course, the cost of living is a consideration and this piqued my interest.

How does one go about getting it? Is there an application process? (after becoming a "bona fide" resident, of course)

TIA!


Quote
CruzanIron
(@cruzaniron)
Expert
Joined: 9 years ago
Posts: 2520
December 14, 2015 2:50 pm  

Never heard of such a thing.

How did you hear about it?


ReplyQuote
OldTart
(@the-oldtart)
Expert
Joined: 11 years ago
Posts: 6523
December 14, 2015 3:43 pm  

No such thing. Our tax deductions are exactly the same as those on the mainland and exactly the same forms are used for filing returns. The only difference (which in no way affects your deductions) is that the taxes stay in the USVI.


ReplyQuote
caribstx
(@caribstx)
Trusted Member
Joined: 9 years ago
Posts: 546
December 14, 2015 3:46 pm  

He must be ready something to do with the EDA/EDC program where some businesses MAY qualify for a 90% reduction in certain taxes.

But, this is not for normal residents or working people.

We have to pay the full freight.


ReplyQuote
Alana33
(@alana33)
Expert
Joined: 11 years ago
Posts: 12366
December 14, 2015 3:47 pm  

It may be applicable if you're a business relocating to the VI under the terms for EDC benefits, if qualified.
Not for personal income tax, however.
If you find out differently, please.....let us all know!;)


ReplyQuote
nautyrn
(@nautyrn)
Active Member
Joined: 7 years ago
Posts: 14
December 14, 2015 5:38 pm  

It is kind of like getting medical information off WebMD...

It was a Newsweek article and also cited in Fortune magazine (the two reasonably reliable sources is what made me wonder)- both specifically stating corporate AND personal tax credit. I tried to read the tax code but that made my head hurt...I do have my accountant looking into it just to verify. If the news is good I'll be shouting it from the rooftops.


ReplyQuote
janeinstx
(@janeinstx)
Trusted Member
Joined: 11 years ago
Posts: 688
December 14, 2015 5:48 pm  

edc benefits


ReplyQuote
OldTart
(@the-oldtart)
Expert
Joined: 11 years ago
Posts: 6523
December 14, 2015 5:59 pm  

The Newsweek article is here and clearly addresses tax shelter for businesses:

http://www.newsweek.com/2014/09/19/made-america-offshore-tax-haven-269135.html


ReplyQuote
nautyrn
(@nautyrn)
Active Member
Joined: 7 years ago
Posts: 14
December 14, 2015 7:09 pm  

The Newsweek article is here and clearly addresses tax shelter for businesses:

http://www.newsweek.com/2014/09/19/made-america-offshore-tax-haven-269135.html

It also clearly says "personal income taxes" - paragraph 5, below:

"What’s a company like this doing in the U.S. Virgin Islands? With the blessing of the U.S. Treasury and Congress, the islands offer a 90 percent reduction in U.S. corporate and personal income taxes. Much of corporate America already pays federal taxes well below the statutory 35 percent rate. But in the U.S. Virgin Islands, the average rate is just 3.37 percent."


ReplyQuote
CruzanIron
(@cruzaniron)
Expert
Joined: 9 years ago
Posts: 2520
December 14, 2015 7:28 pm  

Looks like Newsweek is wrong.


ReplyQuote
OldTart
(@the-oldtart)
Expert
Joined: 11 years ago
Posts: 6523
December 14, 2015 7:42 pm  

It also clearly says "personal income taxes" - paragraph 5, below:"

I read the article. Semantics. In context it means that the owners of the companies can claim exceptionally large deductions on their personal income which is derived from the business.


ReplyQuote
nautyrn
(@nautyrn)
Active Member
Joined: 7 years ago
Posts: 14
December 14, 2015 8:12 pm  

Looks like Newsweek is wrong.[/quote

WHA..??? You mean I have been mislead by a major media outlet (or 3) and the interwebs?? Say it ain't so....

This is why I contacted my tax accountant and followed up with some real life context - all these nice folks. 🙂


ReplyQuote
OldTart
(@the-oldtart)
Expert
Joined: 11 years ago
Posts: 6523
December 14, 2015 8:23 pm  

Did you read the link which janneinstx posted?


ReplyQuote
nautyrn
(@nautyrn)
Active Member
Joined: 7 years ago
Posts: 14
December 14, 2015 9:12 pm  

Did you read the link which janneinstx posted?

Thank you, I did.

And let me be very clear, I'm not looking to avoid paying taxes. But I also pay A LOT of taxes, so a 90% credit on my federal tax rate makes me look deeper.

I understand how the list of benefits appear in the context of corporate incentives but regardless of how I interpreted it when I read it on this, or any website, I would still have asked the question. I am a WHY person. All the various sites (VIBIR, usvieda, and others) say "90% reduction in personal income taxes" which could be interpreted as the corp employees get a lower tax rate (which seems weird but would be a useful recruiting tool for a corp), the general population gets a lower tax rate (less weird but still strange) or....?....and I would be remiss if I did not seek to understand the context. And some may say that the very thought is crazy but there are programs where I live now to encourage growth in economically depressed areas - everything from student loan forgiveness to cash incentives to relocate - so reading that there is a tax incentive to move to an area that is historically more expensive and might have slow economic growth did not seem completely out of the realm of possibility. I researched many places including the site listed above but, alas, I'm a nurse not an accountant, so I also contacted my tax accountant who is very good at what she does but not familiar with the USVI. So rather then pay hundreds of dollars for her to research the issue (before it even applies to me!) I thought I would ask the other experts - the people who live there. And now I have my answer.


ReplyQuote
OldTart
(@the-oldtart)
Expert
Joined: 11 years ago
Posts: 6523
December 14, 2015 9:19 pm  

That's what we're here for, glad to help.


ReplyQuote
caribstx
(@caribstx)
Trusted Member
Joined: 9 years ago
Posts: 546
December 15, 2015 11:03 am  

My company could easily qualify for EDA benefits. But, I don't want the government telling me who to hire, how many to hire or what to do with my charity dollars. Its just not worth it.


ReplyQuote
Donnasculpts
(@donnasculpts)
Advanced Member
Joined: 9 years ago
Posts: 46
December 16, 2015 12:35 pm  

Yes there is a 90% reduction in personal income tax for EDC resident shareholders ...
"A 90% exemption also applies to the individual income tax liability of V.I. resident stockholders on income derived from the dividends of the corporation or, for S corporation or partnership distributions."
The key being in how you distribute "income". But, yes it can be done relatively easily. There is a nice example on the EDC website.
https://www.usvieda.org/start-business/edc-tax-incentives/tax-incentives-how-do-they-work


ReplyQuote
Search this website
Close Menu