Taxes in the Bahamas

The central taxes and charges in the Bahamas include value added tax (Value Added Tax, VAT), formally Value Added Tax (VAT), customs duties and excise taxes, Business Licence Tax for business activities, Real Property Tax (Real Property Tax) on real property, and stamp or VAT-stamp charges for certain legal transactions. The rules apply nationally; there is no separate provincial or municipal tax structure. However, practical application to real property and business licences may vary according to the island, location, use and ownership status. Individuals have no general income tax and therefore generally do not file a personal income tax return or make personal income tax prepayments in the Bahamas. As consumers, however, they pay VAT on taxable goods and services and may also be affected by Real Property Tax, stamp or VAT-stamp charges, and customs duties and excise taxes. Foreign income may remain taxable in the country of origin; staying in the Bahamas does not automatically eliminate a foreign tax obligation. The standard VAT rate is 10 percent. Certain supplies are taxed at 0 percent or exempt from VAT. Anyone carrying on a taxable activity in the Bahamas and having turnover of more than 100,000 Bahamian dollars in the previous or expected following twelve months generally must register for VAT; voluntary registration may be possible. Unregistered suppliers may not charge VAT. Registered businesses must show VAT correctly on invoices, prices and receipts, retain records for at least five years, and generally submit VAT returns and payments within 21 days after the end of the relevant period. With turnover above 5 million Bahamian dollars, filing is generally monthly; below that threshold, it is usually quarterly. Input-tax, credit-note and refund mechanisms depend on the statutory requirements. The rental of commercial real property is also generally subject to the 10 percent rate; export and special rules may differ. Under the Business Licence Act 2023, every person carrying on a business activity in the Bahamas generally requires a Business Licence. Applications and renewals are handled online. A separate licence is required for each island and location; branches also regularly require their own licence. According to the available information, complete applications are often processed within approximately seven working days. Renewal must take place by 31 January, and tax payment is generally due by 31 March. The standard rates stated in Department of Inland Revenue information are 100 Bahamian dollars on turnover up to 50,000 dollars, 0.5 percent on 50,001 to 500,000 dollars, 0.75 percent on more than 500,000 to 5 million dollars, and 1.25 percent on more than 5 million dollars. Special rates and changes for 2025 and 2026 may apply. Late payment may trigger a 10 percent surcharge and, after more than 30 days, an additional 5 percent annual interest charge. When a business ends or becomes inactive, it must be deregistered within 14 days and no later than 31 December. A temporary foreign contract business may operate for no more than three years and may be charged 1.5 percent of the contract value; depending on the activity, permits from other authorities may be required. Real Property Tax applies to land and buildings or other improvements on it. For an owner-occupied dwelling, the first 300,000 Bahamian dollars remain tax-free; the next 200,000 dollars is taxed at 0.625 percent and the value above that at 1 percent. For residential property with no more than four units, a flat charge of 300 dollars applies up to 75,000 dollars, followed generally by a rate of 0.625 percent. Commercial property, buildings with more than four units and rented property owned by foreigners are generally taxed at 0.75 percent on the first 500,000 dollars, 1 percent on the next 1.5 million dollars and 1.5 percent on the value above that. For undeveloped land owned by foreigners, the general charges are 100 dollars on the first 7,000 dollars and 2 percent on the remainder. Different rules generally currently apply to Bahamian undeveloped land, often with no tax; Family Islands, Freeport and Hawksbill rules must be examined separately. Payment is generally due by 31 December for each tax year. Surcharges or interest may apply from 1 January. Full payment by 31 March may allow a 10 percent discount. In case of arrears, a lien or sale may follow under the prescribed procedure. Relief and payment deferrals depend on an application and review. No VAT is charged on Real Property Tax. On the purchase, long-term rental, assignment or transfer of real property, and where a company holds real property, VAT or stamp procedures may be required. The VAT Stamp Unit (VAT Stamp Unit) examines, among other things, the contract, conveyance and valuation; filing takes place through the portal public.gov.bs. Bahamian citizens aged 18 or over may qualify for a full or partial exemption from stamp duty on their first owner-occupied home, subject to the statutory requirements. For imports, the tariff classification, customs value, origin and type of goods are particularly relevant to the amount of customs duties and excise taxes. Tourism levies and special charges may also apply to certain services. The Department of Inland Revenue, the Controller or Comptroller of Customs, the Ministry of Finance and the Tax Appeal Commission share responsibility depending on the tax or charge. The Tax Identification Number (TIN) serves as a tax identifier. The One Tax Bahamas system also uses a Business Identification Number (BIN) as an access key; older systems such as OTAS or RMS may continue to appear in transitional processes. A Tax Compliance Certificate (TCC) is required, among other things, for dealings with government entities, government payments and certain ownership or transfer matters. The TCC is generally valid for six months and usually requires demonstrated compliance with obligations to Inland Revenue, Customs, Immigration, NIB and the property tax authorities. VAT violations may be reported to the Department of Inland Revenue. Examination, information and record-retention obligations also apply in addition to the relevant filing and payment obligations. A written objection may be filed against an appealable tax decision under the applicable law. For a VAT assessment, the disputed amount generally must be paid or secured by an accepted guarantee. The Comptroller generally decides within 90 calendar days; after that, an appeal may be made to the Tax Appeal Commission (Tax Appeal Commission). Depending on the statutory basis, the procedure also applies to decisions concerning Real Property Tax, customs duties and other charges. A mere filing extension does not automatically suspend payment. International financial accounts are subject in the Bahamas, among other things, to FATCA with the United States and to CRS and AEOI reporting and exchange rules. Legal bases such as the Tax Information Exchange Agreement and the International Tax Cooperation Act enable international information exchange; the responsible authority is the Minister of Finance or an authorised authority. Large in-scope multinational groups are also subject to a Domestic Minimum Top-Up Tax (Domestic Minimum Top-Up Tax) under the OECD GloBE rules, with a minimum effective tax rate of 15 percent. The law has applied since 2024 with transitional rules; changes in 2026 and further tax changes may alter the current legal position. Before filing, paying, entering into a real-property transaction or establishing an international structure, the version currently in force should therefore be checked with the responsible authority.