Trinidad and Tobago Computer Society

Trinidad and Tobago to apply VAT to digital services supplied by non-resident providers to persons in Trinidad and Tobago

Written by

Dev Anand Teelucksingh

in

The Trinidad and Tobago Government has proposed to apply VAT (12.5%) to digital services supplied by non-resident providers to persons in Trinidad and Tobago.

Dubbed the “Netflix” tax by some, digital services supplied by non-resident providers include

  • Streaming and Digital Media : Music, Movies, audio and gaming platforms like Netflix, Disney+, Amazon Prime Video, Apple iTunes/Music, Spotify, HBO Max and Audible.
  • Online Gaming purchases and subscriptions, including in game purchases – Steam, GOG, Xbox Store, Nintendo eShop, Playstation Store.
  • Software as a Service (SaaS) : Cloud based productivity and creative tools including Microsoft 365 (Word, Excel, Powerpoint) , Google Workspace, Canva, Capcut, Notion, Zoom, Cisco Webex, Adobe Creative Cloud apps (Photoshop, Lightroom, etc) and AI tools like ChatGPT, Claude and Gemini.
  • Cloud Storage like Google One, Dropbox, Apple Cloud, and Microsoft OneDrive.
  • Web Hosting and Infrastructure – Web hosting, gTLD domain names registration and renewals, virtual servers, website builders from providers like Amazon Web Services (AWS), Microsoft Azure, Digital Ocean, SquareSpace, Wix, GoDaddy, HostGator and Bluehost.
  • Digital advertising, such as advertising purchased on Meta (Facebook, Instagram) and Google Ads.
  • Mobile and In-app purchases : Paid mobile apps and in app digital purchases made through the Apple App Store and Google Play Store.

In short, any digital service provided by an overseas company and consumed in Trinidad and Tobago would be subject to VAT.

According to the The Minister of Finance, Honourable Davendranath Tancoo who presented the 2027 Budget Statement in the Trinidad and Tobago Parliament on October 12 2026 :

“To facilitate compliance and collection, a simplified
registration will be introduced for non-resident
suppliers, including suppliers of taxable services
connected with real property situated in Trinidad and
Tobago, allowing them to register, collect and remit
VAT electronically.”

The wording “taxable services connected with real property” suggests that online rental platforms like Airbnb and Vrbo would also be required to apply VAT to their service fees to users in Trinidad and Tobago.

The impact to Trinidadians and Tobagoians

Consumers and businesses in Trinidad and Tobago who subscribe to digital services will face higher costs. Payment of these subscriptions are done with credit cards. However, local credit cards in Trinidad and Tobago have severe limits in the amount of foreign exchange that could be spent within a month so paying VAT on all digital services means less foreign exchange available to spend each month.

Local companies and individuals that are not VAT registered that rely on digital services to deliver their products or services must now either factor VAT into their pricing or absorb the cost.

Making matters worse, the cost of many digital services has risen significantly, driven by the integration of AI functionality and escalating web hosting expenses due to increased demand for AI data centers raising hardware prices (especially memory and storage) to hosting providers and everyday users.

There’s been online comments that Trinidad and Tobago’s market is too small for companies to bother implementing VAT, but many companies already charge VAT and/or other forms of Sales Tax and Duties based on the location of their users. So adding Trinidad and Tobago would not be a significant challenge to digital services.

Some ways to minimize the cost

Cut back on streaming services

Audit what you actually watch. Instead of paying for multiple services every month, rotate them—subscribe to one platform at a time, watch what you want, cancel, and switch to the next service.

Find alternatives to software as a subscription services

Many Free and Open Source Software (FOSS) don’t require monthly or yearly subscription costs and can run on your hardware (a plus for privacy) and many run on Windows and MacOS.

There’s been a surge in interest in Artcraft which is developing multi platform desktop applications mimicking the UI of popular applications from Adobe, Microsoft and Autodesk which require paid subscriptions, seemingly using AI to spur rapid development.

Run AI locally

If you have suitable hardware (Apple Silicon machines, PC with suitable graphic cards), you can run various AI models locally, (and completely offline for complete privacy, if you wish) without any subscription costs.

Evade Mobile App Store Commissions

Mobile apps distributed by Apple or Google have to pay commissions to Apple and Google on any in app purchases from their App Stores (which increases the cost to you). You can avoid the “App Tax” by subscribing to the service directly from the service’s website and then logging in the mobile app to access the subscription.

A look at Barbados

In 2019, Barbados implemented charging VAT (17.5%) on online transactions. The Barbados Revenue Authority released a series of short videos that explains how the collection of VAT on online transactions works in Barbados, the core concepts explained in the videos should apply to Trinidad and Tobago. 

Today, numerous major digital service providers automatically collect VAT from customers in Barbados, including Zoom , Meta (Facebook / Instagram / WhatsApp), Dropbox and AWS

More posts