Taxes in Barbados

Barbados operates a self-assessment tax system. The Barbados Revenue Authority, including the Revenue Commissioner, administers income tax, VAT, land tax, withholding tax, PAYE and related filings through the Tax Administration Management Information System (TAMIS). Registration produces a unique 13-digit Taxpayer Identification Number (TIN), which taxpayers use for returns, payments, refunds and tax-credit claims. Businesses, self-employed individuals, companies, partnerships, joint ventures, charities, clubs and certain pensioners may need to register with the BRA. In-person services and cheque transactions can be handled through the Electronic Payment and Application system. Personal income tax applies to self-employed individuals and, under the current BRA income-tax information for income year 2025, to employees earning more than BBD 25,000 per year and contributory pensioners earning more than BBD 75,000 per year. A 2025 BRA guide refers to a conflicting BBD 45,000 threshold, so the applicable threshold should be checked in TAMIS or directly with the BRA before filing. From 2026, the personal allowance is BBD 25,000; the first BBD 50,000 of taxable income is taxed at 11.5%, and taxable income above that level at 27.5%. Employees generally pay through non-cumulative PAYE. Employers register for PAYE when employee pay exceeds BBD 481 per week or BBD 2,083 per month, use Employee Declaration Form A47:001, and file and pay by the 15th of the following month. An individual income-tax return is generally due by 30 April of the following year. Employees generally pay 50% by 30 April and the balance by 30 September, while people with business or property income, or more than 25% business income, generally make prepayments on 15 June, 15 September and 15 December, with the balance due by 30 April. A resident and domiciled individual is generally taxed on worldwide income. A resident who is not domiciled is generally taxed on Barbados income and foreign income remitted to or enjoyed in Barbados, while a non-resident is generally taxed on Barbados-source income. Barbados does not currently impose a capital gains tax. A resident employee with annual income up to BBD 25,000, or monthly income up to BBD 2,083.33, may qualify for the Reverse Tax Credit if the person worked at least four months and earned at least BBD 1,000 per month or BBD 250 per week. Directors, self-employed individuals and people with goods or services income are excluded from this credit. The credit is BBD 1,300, and a claim generally has to be filed within two years; claims for income year 2025 can be made until 31 December 2027. Corporate income tax is based on taxable income and the corporation's status. The general rates are 5.5% on taxable income up to BBD 1,000,000, 3% above BBD 1,000,000 up to BBD 20,000,000, 2.5% above BBD 20,000,000 up to BBD 30,000,000, and 1% above BBD 30,000,000. Certain grandfathered international business companies, international banks and international societies have rates between 1% and 2.5%; new entrants to those regimes were closed from 31 December 2018. Insurance companies use separate rates: 0% for Class 1, 2% for Classes 2 and 3, 0% for exempt insurers and 0.35% for qualifying insurers. A corporation managed and controlled in Barbados is generally resident and taxed on worldwide income. Corporate returns are generally due on 15 March of the following year for fiscal years ending from 1 January to 30 September, and on 15 June for fiscal years ending from 1 October to 31 December. Fiscal periods can last up to 53 weeks. Corporate prepayments generally use 50% on 15 September or 15 December and the remaining 50% on 15 March, with the balance due on the filing date. Financial statements accompany the return. A dormant or non-trading company can still have historical-return and affidavit obligations. BRA information gives conflicting loss-carryforward periods of seven and nine years, so the applicable period should be verified under the relevant legislation and circumstances. VAT applies to taxable supplies and imports. Registration generally begins at annual taxable turnover of BBD 200,000 or monthly turnover of about BBD 16,667. Current BRA rate information lists 17.5% as the standard rate, 22% for telecommunications and 0% for zero-rated supplies. Direct tourism accommodation services are currently listed by the BRA at 7.5%, although an older 2019 policy note refers to 10% from 1 January 2020; the operative BRA instruction or Tax Act should be checked before charging customers. VAT periods are commonly two months, with returns and payment generally due by the 21st of the following month through TAMIS. Excise duties apply to goods such as tobacco, petroleum, automobiles, alcohol, sugar-sweetened beverages and other tariff-defined products. Rates and procedures depend on the goods. Licences, electronic registration, monthly returns, records and inspections can apply, and Customs and Excise administers import duties, tariffs and related import charges. For 2026, the import de-minimis threshold is FOB BBD 150, subject to specified exceptions. The levy on sugar-sweetened beverages is listed at 20% under the 2022 policy. Tourism businesses can face sector-specific charges. The Product Development Levy is listed at 3.75%, and the Shared Economy Levy at 10%. The Room Rate Levy applies from 1 April 2019 at BBD 8.75 per bedroom per night for Apartment, Guest House and Class B properties, BBD 19.25 for Class A properties and BBD 35 for luxury properties. Vacation rentals do not pay the Room Rate Levy but remain subject to the Shared Economy Levy. Tourism levy registration and related VAT, Room Rate Levy and Shared Economy Levy filings use TAMIS, with periodic returns and payment generally due by the 21st of the following month. The Barbados Tourism Product Authority handles tourism-sector registration and status questions. Land tax is administered with valuation support from the Land Valuation Department. The final payment date is generally 31 March. Payment within the first 30 days after receiving the bill can qualify for a 10% discount, and payment in the next 30 days can qualify for 5%. For residential improved property, the rates are 0% up to an improved value of BBD 400,000, 0.1% on the band above BBD 400,000 to BBD 550,000, 0.7% above BBD 550,000 to BBD 950,000 and 1% above BBD 950,000. Non-residential improved property is generally taxed at 0.95%. Vacant land is generally taxed at 0.8% below 4,000 square feet, 0.9% above 4,000 square feet where the value does not exceed BBD 450,000, and 1% above BBD 450,000. Late land-tax payment can add 5% plus simple interest of 1% per month. Late filing and payment can create significant additional charges. A late personal income-tax return can attract BBD 500, an unpaid balance can attract 5%, late payment can attract another 5%, and interest is generally 1% per month. Corporate late filing can attract BBD 500 plus 5% of assessed tax; late payment attracts 5% and interest of 1% per month, while missed corporate prepayments can attract 10% of the prepayment plus 0.5% per month. The applicable tax type and legislation determine the exact charge. A Notice of Assessment can be challenged through TAMIS. An income-tax objection generally needs to reach the BRA within 21 days after service of the notice and should state precise grounds. A taxpayer can appeal to the Barbados Revenue Appeals Tribunal within 30 days, including in certain cases where the Commissioner has not decided an objection within six months. VAT objections generally follow a 21-day period, and payment or security may be required. A Tribunal decision can generally be taken to the High Court within 30 days, while a penalty appeal generally has a 14-day period. The Tribunal does not generally provide a payment plan or accept an offer in compromise. Refunds are tracked through TAMIS and can be paid directly to a bank or credit-union account after assessment and verification; outstanding liabilities can reduce or delay the refund. Cross-border tax treatment depends on residence, source, treaty entitlement and the type of payment. Barbados has double-tax agreements with countries including Germany, the United Kingdom, the United States, Canada, Switzerland, Singapore and the United Arab Emirates, as well as tax-information exchange agreements and participation in the Convention on Mutual Administrative Assistance in Tax Matters. General non-resident withholding guidance commonly lists 15%, but treaty rates can reduce withholding on dividends, interest, royalties and management fees. Payment-specific BRA guidance also lists rates such as 25% for entertainers and certain services, 15% for interest, royalties, dividends from taxed profits and managerial, technical or administrative services, 10% for branch profits, 25% for other services and rent prepayments, and 20% for settlements, trusts and covenants. The treaty, recipient status and exact payment should be checked before payment. Barbados financial institutions may have reporting duties under the Common Reporting Standard (CRS), with annual automatic exchange through the AEOI portal. The legal basis includes the Income Tax (Automatic Exchange of Information) Regulations 2017 and its 2024 amendment. FATCA reporting follows the reciprocal Model 1A agreement with the United States signed on 17 November 2014. Non-compliance can lead to a BBD 10,000 pecuniary penalty and, for an offence under the BRA FAQ, up to BBD 50,000 or 10 years' imprisonment. Country-by-country reporting applies to relevant multinational groups: resident constituent entities submit annual notifications, and the group threshold is consolidated revenue of at least USD 850,000,000. The Corporation Top-up Tax Act 2024-16 applies Pillar Two rules to multinational groups meeting the EUR 750,000,000 revenue threshold in at least two of four fiscal years when the jurisdictional effective tax rate is below 15%; filing, notification and payment use BRA portals and 2026 guidance.