Misick & Stanbrook win landmark case in Supreme Court

Somerset Resort Management Company Ltd v. The Attorney General – Mag Ref 1/22

Misick & Stanbrook can confirm that judgement in the above case was handed down on December 21, 2023.  This case related to the imposition of retrospective accommodation tax and penalties by the Revenue Department of the Turks and Caicos Government on owners and other complimentary guests of the hotel who had not paid for their accommodation.  A copy of the full judgment can be found at https://tcilii.org/akn/tc/judgment/tcasc/2023/91/eng@2023-12-21 

The case is of the utmost importance to all resort operators, villa owners and villa rental managers in the Turks and Caicos Islands.  The claim by the Revenue Department was that all condo and villa owners and other complimentary guests residing in their condo or villa should pay accommodation tax based on a deemed rental rate for their property had it been rented out for the same period of occupancy as that enjoyed by the owner or complimentary guest.

The finance department then sought to retrospectively assess this tax for a period of six years and to charge interest and penalties on the arrears so calculated.  The resulting tax claim on the Somerset Resort was over $1,750,000.00.  Had the assessment been upheld as valid then every condo resort and rental villa would have been assessed in the same way and the cost to the industry would have been in the tens of millions of dollars or higher.

We are pleased to say that following submissions by Ariel Misick K.C. on behalf of the Somerset Resort, the Supreme Court decided conclusively that owners and other guests of a condo or villa who do not pay for their stay are not subject to taxation.    The assessment by the Revenue Department will therefore be set aside and the Turks and Caicos Government must pay the costs of the action.

Misick & Stanbrook

January 2024