Tax Structure In Barbados
Barbados offers a competitive tax regime. It’s one of the main reasons we’re a top choice for international investment.
We keep our taxes straightforward and transparent. Barbados is one of the first countries in the Caribbean to converge its local and international tax rates, making its tax system globally competitive, while bringing the country in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Initiative. By implementing the new regime, Barbados has fulfilled its commitment to be fully compliant with the BEPS Action 5 report addressing harmful tax practices.
“As an investor, you’ll pay a maximum corporate income tax rate of 5.5 percent and a minimum of one percent.”
Barbados offers a competitive tax regime. As an investor, you’ll pay a maximum corporate income tax rate of 5.5 percent and a minimum of one percent. The straightforward tax regime is also attractive because there is no capital gains, wealth, inheritance or gift tax. Value Added Tax is charged at 17.5 percent.
Barbados corporate income tax rates
|Taxable income US$||Tax rate|
|Up to $500,000||5.5%|
|$500,000 to $10 million||3%|
|$10 million to $15 million||2.5%|
|Above $15 million||1%|
Corporate income tax due dates depend on the fiscal year-end for the company:
- For companies with a fiscal year-end between January 1 and September 30, income tax is due on March 15.
- For companies with a fiscal year-end between October 1 and December 31, income tax is due on June 15.
Barbados insurance company tax rates
The tax rate for insurance companies depends on their category, as set out in the Insurance Act Cap 310, and outlined in table 2 below.
|Class 1||Insurance companies which restrict the business they can underwrite to related party business.||0%|
|Class 2||Insurance companies which can underwrite risks on third parties.||2%|
|Class 3||Insurance intermediaries such as brokers, agents and salesmen, holding and management companies, loss adjusters and assessors||2%|
Read more about investment opportunities in the Barbados insurance sector.
Financial institutions tax rates in Barbados
All financial institutions are licensed under the Financial Institutions Act, and are subject to standard corporate tax rates as outlined in table 1 at the top of this page.
|Class 1||Commercial banks|
|Class 2||Trust companies, financial companies, merchant banks and money or value transmission service providers.|
|Class 3||Financial holding companies|
|Class 4||Financial institutions qualifying for a foreign currency permit (FCP)|
Read more about investment opportunities in the global banking sector.
Tax allowances and benefits in Barbados
You can claim the following under the Barbados income tax act:
- Annual capital allowances
- Renewable energy allowances
- Research and development allowances
Offsetting tax losses in Barbados
Tax losses brought forward and available for offset are restricted to 50 percent of taxable income in any income year.
Foreign Currency Permit
If your business will be earning 100 percent of its income in foreign currency, you are entitled to receive a foreign currency permit (FCP), which offers exemptions from exchange control, property transfer taxes on transfers of shares and other concessions for specially qualified individuals.
“If your business will be earning 100 percent of its income in foreign currency, you are entitled to receive a foreign currency permit(FCP).”
Foreign tax credits
All businesses can choose to take a tax credit for taxes paid to a country other than Barbados, as long as doing so does not reduce the tax they are liable to pay in Barbados to less than one percent of the taxable income for the year.
Read more about corporate income tax in Barbados from the Barbados Revenue Authority.