What taxes do you pay in St. Barths?

The St. Barths tax system fits in one sentence: nothing is taxed on income, everything is taxed on real estate and consumption. Since 2008, the island has applied its own tax code, voted by its territorial council. Here is what it contains, and what it does not.

Which taxes do not exist in St. Barths?

The local tax code provides for:

• no personal income tax;
• no corporate income tax;
• no VAT;
• no wealth tax;
• no property tax or residence tax of the kind found in mainland France;
• no inheritance tax on assets that fall under local rules.

The profits of an island-resident company are therefore not taxed locally, and neither are dividends paid to a five-year resident (see executive pay and social security). French social levies are a separate matter: whether they apply to residents’ local-source income is debated and has to be checked case by case.

When do you start to benefit from the St. Barths tax system?

The St. Barths tax system only applies to individuals and companies that have been attached to the island for at least five years. Before that, a newcomer remains a French taxpayer on all of their income. It is the most commonly misunderstood point, and we cover it in a dedicated insight. The same condition applies to setting up a company in St. Barths.

Which taxes and duties do you pay in St. Barths?

Tax	Amount	Who pays
Flat annual business contribution	€350, plus €100 per employee	Every business on the island
Transfer duty on real estate	5% of the price	The buyer
Real estate capital gains tax	35% or 20% depending on the holding period	The seller, resident or not
Dock duty	5%; 8% for vehicles	The importer
Tourist tax	5% of the nightly rate	Collected by the host
Waste disposal tax	Flat annual fee	Homes and businesses
3% tax on real estate	3% of market value	Companies that do not disclose their shareholders

On top of these come registration duties on corporate deeds and share transfers, taxes on fuel, electricity and vehicles, and a development tax on construction.

Real estate, the heart of the system

Buying a property carries a 5% duty. Selling it is subject to capital gains tax: 35% when the sale takes place before the eighth year of ownership, 20% after that, with a 10% allowance for each year beyond the eighth. A primary residence occupied continuously for five years is taxed at 20%.

One local feature deserves attention: any company that owns real estate on the island, even incidentally, becomes a “real estate entity” for tax purposes. Selling its shares is then taxed like selling the property itself. See holding property through a company and selling company shares.

Dock duty, the local counterpart to VAT

Goods imported to the island carry a dock duty of 5% of their customs value, shipping included, unless an exemption applies. The rate is 8% for motor vehicles. It is part of the cost of every investment, from a vehicle to the furnishings of a villa.

Example: what an island resident pays over one year

Take Sophie, who has been an island resident for more than five years. She runs a service company on the island by herself, with no employees and no real estate, and she owns her primary residence. This year, she imports a car with a customs value of €40,000 and €10,000 of furniture. The amounts are assumptions, for illustration only.

Item	Calculation	Amount
Company’s flat annual contribution	Fixed portion, no employees	€350
Waste tax, office	Fewer than two people	€120
Waste tax, home	Primary residence	€105
Dock duty, car	€40,000 × 8%	€3,200
Dock duty, furniture	€10,000 × 5%	€500
Total for the year		€4,275

Sophie pays no local tax on her company’s profits or on her dividends. If she also receives rent from an apartment in mainland France, that rent remains taxed in France. And if she had only been on the island for two years, both she and her company would still fall under French tax.

What does France continue to tax?

Even after five years, French tax law still applies wherever a link to France remains:

• French-source income, such as rent from a property in mainland France or dividends from a French company (12.8% withholding tax);
• real estate located in France, for the French real estate wealth tax, above €1.3 million;
• gifts and inheritances, when the heir lives in France or the asset is located there.

We cover these points in what France still taxes. See also invoicing French clients and inheritance and gift tax in St. Barths.

Taxes in St. Barths: common mistakes

• Assuming you are exempt from day one. For five years, a newcomer remains a French taxpayer on their worldwide income.
• Forgetting that real estate is taxed. 5% on purchase, and up to 35% on the gain at resale.
• Leaving dock duty out of the budget. It adds to the price of everything that is imported.
• Treating social levies as settled. The question has no single answer and should be checked every year.

See also tax audits and penalties.

Taxes in St. Barths: the bottom line

The St. Barths tax system has no personal income tax, no corporate income tax and no VAT: it is built on real estate and consumption. That absence of tax only benefits individuals and companies that have been island residents for at least five years. Buying real estate carries a 5% duty, the gain at resale is taxed at 35% or 20%, and imports carry a 5% dock duty, 8% for motor vehicles. Every business pays a flat annual contribution of €350, plus €100 per employee. France continues to tax French-source income and assets located in France. Good advice is less about hunting for exemptions than about checking, for each person and each asset, which side of the line it falls on.

A note for U.S. readers: this article covers French and St. Barths rules only. U.S. citizens and green card holders remain subject to U.S. tax on their worldwide income wherever they live.