- Business Companies (Economic Substance) Act
- Foreign Currency Permits Act
- Trusts (Miscellaneous Provisions) Act
For the full list of legislation related to the business sector click here.
- Exempt Insurance Act – CAP. 308A
- Exempt Insurance (Amendment) Act 2012-4
- Foundations Act, 2013-2
- International Business Companies (Repeal) Act
- International Financial Services Act, CAP. 325
- International Financial Services (Amendment) Act, 2012-24
- International Trusts Act, CAP. 245
- Companies (Amendment) Act
- Corporate and Trust Service Providers (Amendment) Act
- Financial Institutions (Amendment) Act
- Income Tax (Amended) Act
- Insurance (Amendment) Act
- Shipping Corporations (Amendment) Act
- Societies with Restricted Liabilities (Amendment) Act
- Stamp Duty (Amendment) Act
- Value Added Tax (Amendment) (NO. 2) Act
Competitive Tax Regime
Barbados offers a very competitive tax regime, where investors pay a maximum rate of 5.5% and a minimum rate of 1.0%. The current range of tax rates in Barbados are set out in Table 1.
Table 1: Tax Rates – General
Tax Rates - General
|Taxable Income US$||Rate %|
|Up to $500,000||5.50|
|Above $500,000 to $10 million||3.00|
|Above $10 million to $15 million||2.50|
|Above $15 million||1.00|
Effective January 1, 2019, all insurance entities are now licensed under the Insurance Act Cap 310 and are categorised into three classes of licenses.
- Class 1: Insurance companies which restrict the business they can underwrite to related party Business. These insurance companies will be taxed at zero.
- Class 2: Insurance companies which can underwrite risks of third parties. These companies will be taxed at a rate of 2%.
- Class 3: Includes brokers, intermediaries, insurance management companies, insurance holding companies, etc. These entities will be taxed at a rate of 2%.
Click here for further details.
All financial institutions are licensed under the Financial Institutions Act, which provides for four classes of licenses as follows:
- Class 1: Commercial Banks
- Class 2: Trust Companies, Finance 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)
Financial institutions are subject to corporate tax at the rates set out at Table 1.
Allowances and Benefits
The following allowances are provided for under the Income Tax Act:
- Annual capital allowances
- Renewable energy allowances, and
- Research and development allowances
Tax losses brought forward and available for offset are restricted to 50% of taxable income in any income year.
Foreign Currency Permit
All entities that earn 100% of their income in foreign currency, from January 1, 2019, are entitled to receive a FCP. These entities benefit from:
- Exemption from exchange control
- Exemptions from property transfer taxes on transfers of shares or quotas
- Income tax concessions for specially qualified individuals as employees
- An FCP must be renewed annually as follows: for companies incorporated between January 1 and June 30 – no later than June 30; for companies incorporated between July 1 and December 31 – no later than December 31
- An Annual fee of US $500, if not paid within three business days of the renewal date, will result in automatic expiration of the FCP
- Declaration by a director/manager to be filed with the Ministry of International Business and Industry, on or before the anniversary date, certifying that a corporation tax return for the previous year has been filed with the Barbados Revenue Authority and confirming that 100% of the income earned was in foreign currency
- All FCP holders must retain a Corporate and Trust Service provider duly licensed under the Corporate and Trust Service Providers Act
Foreign Tax Credit
All entities may elect to take a credit in respect of taxes paid to a country other than Barbados provided that such an election does not reduce the tax payable in Barbados to a rate less than 1% of the taxable income in any one year.
Click here for further information on the Practice Direction, effective 2019.