Taxation framework

The unique status of the Saint-Pierre and Miquelon as an overseas collectivity gives it entire control over taxation. This section provides the main information regarding personal and corporate taxation, customs taxes and various investment tax credits from which entrepreneurs can benefit. A new tax regime is being developed in 2009 to make Saint-Pierre and Miquelon more attractive to investors.

Personal taxation

Individuals must pay income tax to Saint-Pierre and Miquelon's Conseil territorial if they fall under one of the following categories:

• People who have their principal residence on Saint-Pierre and Miquelon;
• People who have their principal place of abode in Saint-Pierre and Miquelon;
• People working in Saint-Pierre and Miquelon, salaried or not;
• People for whom Saint-Pierre and Miquelon is the centre of their economic interests;
• People who live outside the archipelago and receive local income from buildings, securities or agricultural, commercial or industrial activities.

Saint-Pierre and Miquelon has taxation agreements with France and Canada to avoid duplicate taxation.

Individuals must also pay the following taxes:

• Municipal taxes including residence, waste and water treatment for approximately € 375 per year;
• Property tax on buildings for approximately € 0.85 per m² in Saint-Pierre and € 0.48 per m² in Miquelon. Property tax on land varying between € 0.01 and 0.05 per m² in Saint-Pierre and between € 0.03 and 0.04 per m² in Miquelon, depending on the zone in which the buildings are located. Other buildings, such as sheds or garages, are taxed at € 0.42 per m² in Saint-Pierre and € 0.24 per m² in Miquelon;
• Two taxes apply when selling a home, each equivalent to 5% and 1% of the value of the sale;
• Lease fees of 4.5% on the annual amount of the rent.

Corporate taxation

Corporations must pay the following taxes:

• Taxable profits at 33.33%;
• Complementary tax of 10% on taxed benefits, i.e. 10% of 33.33%;
• Annual flat tax of € 1,100;
• Tax on salaries equivalent to 0.50% of the gross salaries paid to employees. This tax does not apply to fishing and farming businesses;
• Property tax on buildings of € 1.15 per m² in Saint-Pierre and € 0.65 per m² in Miquelon. Property tax on land varying between € 0.01 and 0.05 per m² in Saint-Pierre and between € 0.03 and 0.04 per m² in Miquelon, depending on the zone in which the buildings are located. Other buildings, such as sheds or garages, are taxed at € 1.15 per m² in Saint-Pierre and € 0.32 per m² in Miquelon;
• Municipal taxes for a sum of approximately € 105 a year;
• Two taxes apply when selling a commercial building, equivalent to 5% and 1% each of the value of the sale;
• Lease fees of 4.5% on the annual amount of the rent.

Customs taxation

Several staples (flour, potatoes, meat, etc.) are exempt from duties and taxes. Other products, such as fish, dairy, fruits, vegetables and grains are lightly taxed. Common products are taxed between 12% and 20% on average. Luxury products such as cars, perfume, machines and electric devices are taxed at over 20%. Lastly, gas, although sold at a fixed price, is heavily taxed.

The following table summarizes the various customs taxes that exist in Saint-Pierre and Miquelon.

Note that Saint-Pierre and Miquelon’s import taxes are lower than those of the EU. Thus, a Canadian exporter will pay 6% less tax, on average, for products that first transit to Saint-Pierre and Miquelon (see section 5.2.2 for more details).

Investment tax exemptions

Saint-Pierre and Miquelon has an advantageous taxation and customs regime to promote investment in the archipelago. A more attractive taxation regime is being developed by the Conseil territorial in 2009. Investors and businesses can benefit from a partial or total exemption from certain duties and taxes and, in some cases, public assistance (subsidy or contribution) can be granted. Specifically, businesses accredited by the CLAI that fall under the Code local des impôts can take advantage of 0% taxation rate for a period of 5 or even 10 years, in some cases. In exchange, the investor and the company commit to investing in and creating jobs on the archipelago. The investor's personal financial participation must be at least 20% of the total investment and jobs must be created no later than the end of the company's first fiscal year. The following table outlines the investment and the minimum number of jobs required to receive tax benefits, based on the economic sector.

Businesses planning investments and job creation can receive tax benefits, as can the operators and partners of those businesses. For example, a company's operator or partner could be exempt from taxes for the first ten fiscal years if the company falls under categories 1, 2, 3, 4, 5 or 7 of table 5. For the other categories, the exemption applies to the first five fiscal years.

In addition, a company can receive a tax exemption on benefits and a property tax exemption for five or ten years. Under certain conditions, a company can also be exempt from customs duties and import taxes.

The territorial collectivity can also contribute financial assistance of € 3,050 to create working capital for starting up or acquiring a business, or grant an equipment premium to improve the company's facilities. This premium is reserved for businesses of less than 15 employees registered on the Répertoire des Métiers de la Collectivité territoriale for Saint-Pierre and Miquelon. Lastly, special assistance can be granted to agricultural and aquacultural businesses. Businesses interested in these policies are invited to refer to the Code local des investissements that describes in greater detail the principles and conditions underlying these tax benefits.