Montserrat withholding on payments to non-residents

Scope and classification

Checked 22 October 2026. The Income and Corporation Tax Act, Chapter 17.01, revised 1 January 2025, governs these deductions through section 39 and Schedule 1. Section 39 presumes non-residence for payments made to an overseas address unless proved otherwise. Record residence evidence instead of deciding solely from nationality or incorporation terminology.

Schedule 1 covers dividends, interest and discounts, immovable-property payments, equipment and other movable-property rent, royalties, management charges, certain commissions or fees, periodic payments and specified trust income. Employment emoluments under section 51 have a separate collection regime. The Schedule also addresses independent personal services performed in Montserrat outside a business conducted through a Montserrat permanent establishment. Read the full scope conditions before classifying an overseas invoice. Section 39; Schedule 1 paragraph 1.

Domestic rates

Apply these rates to gross payments within the Schedule's scope:

Payment	Domestic withholding
Dividends	15%
Rental payments for immovable property	10%
Rental payments for movable property	20%
Public entertainers' fees	20%
Other payments specified in paragraph 1	20%

Schedule 1 paragraphs 2–3 make the deduction final for the covered income and do not permit the ordinary section 13(1) expense deductions against these payments. Section 39(3) permits the Comptroller to direct a lower deduction where an applicable international agreement provides one. This Guide establishes no specific treaty entitlement or automatic reduced rate. Schedule 1 paragraphs 2–3; section 39(3).

Worked gross-payment examples

Assume each recipient is non-resident, the payment is in scope and no reduced rate applies. The agreed amounts below are gross, not guaranteed net of tax.

Gross payment EC$10,000	Tax withheld	Paid to recipient
Dividend	1,500	8,500
Immovable-property rent	1,000	9,000
In-scope royalty	2,000	8,000

A contract promising a net amount requires a separate gross-up calculation and legal review of who bears the tax. Do not treat the gross examples as net-payment calculations.

Accruals and due date

For an accrual-basis business, a covered expense charged during the basic year but unpaid is treated for deduction and accounting purposes as paid on the final day of that basic year. Schedule 1 paragraph 1(3). For example, an in-scope EC$12,000 management fee charged but unpaid at a 31 December year end generates EC$2,400 withholding at 20%, subject to the stated assumptions.

Section 52 requires payment of deducted or deductible tax within 15 days after the end of the relevant month. In the example, the December deemed payment produces a 15 January remittance deadline. Delaying the supplier settlement does not remove the year-end deduction rule. Section 52.

Certificates, return and responsibility

Schedule 1 paragraph 4 requires a certificate to the recipient showing gross payment and tax deducted, and a calendar-year record of payment type, gross amount, tax and recipient name/address. Paragraph 5 requires a return with the remittance and copies of those certificates. Paragraph 6 makes the payer personally liable for amounts it failed to deduct, subject to the stated recovery and Comptroller provisions. Schedule 1 paragraphs 4–6.

As a closing control, reconcile supplier accruals, payment dates and withholding certificates to the remittance return. Keep any reduced-rate direction with the transaction evidence. These are suggested controls rather than additional prescribed forms.

Remaining work

Permanent-establishment classification, branch remitted-profit withholding under section 39(4), treaty eligibility, source disputes, specific exemptions and post-consolidation amendments need further analysis. Independent accountant review remains pending.

Contributed by Ryan Duguid.