PHILIPSBURG, Sint Maarten — Senior Tax Accountant Natasha Manuela-Gumbs Bsc CQA CRM, CLA of Prudential Tax Services and external Colombian educated Forensic Risk Management Specialist Terence Jandroep, after receiving several petitions by clients and colleagues in the Tax Consultancy field, to explain the NRPB funding taxability position due to the complaints about the New Taxable Income after receipt of the funding hereby outline the following explanations to the Sint Maarten Taxation Grey Zone:
TOT on NRPB funding:
No TOT is payable on the funding as the TOT obligations has a counterweight of rendered services or sales of products which is not the case with financing.
Profit Tax on NRPB funding:
The moment the NRPB grants the funds, its aligned with an application for future investment, and a non-negotiable refund clause, meaning the funds do not and cannot constitute a corporate revenue, but a liability. The funds should be considered third party monies (Gelden derden) until the investment materializes . The refund clause is legally transparent meaning, if the beneficiary does not apply the funds in accordance to the agreement the funds must be reimbursed.
The only ways the funds can be allocated as revenues if a period of 5 years aged and therefore become uncollectible, in accordance with the Civil Code of Sint Maarten, where it supersedes the liability condition for full reclassification to the commercial Statements of Activities or Profit and Loss Accounts or the NRPB issues a legal document in which the financing organizations dispenses the entity of its liability within the period of 5 years, to support the legal corroboration for financial sustainability.
In order to guarantee the rightful application of the funds, it would be fundamental that the beneficiary acquires an unqualified Certified Auditor’s opinion to secure the fiscal environment to eliminate any threats and misinterpretation by the Collection Agency.
Should the Tax Administration office ignore the legal guidelines or due process of the existing circumstances, it will create the necessary precedents for many Tax Court disputes.