Taxation in the Bahamas is collected by the

Government of the Bahamas The Bahamas is a parliamentary constitutional monarchy headed by King Charles III in his role as King of the Bahamas. The politics of the Bahamas takes place within a framework of parliamentary democracy, with a Prime Minister as the Head of Gover ...

. The Bahamas are considered a

tax haven A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...

given the lack of

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, Bond (finance), bonds, precious metals, real estate, and property. Not all count ...

, inheritance tax or company tax. Government tax revenue is instead derived from consumption, property and import taxes as well as licence fees. The country's lack of income and corporate profit taxes has seen it become a popular drawcard for high net-worth individuals moving to the Bahamas and becoming residents for tax purposes to avoid high taxes in their home countries, including a number of high profile people such as

Eugenie Bouchard Eugenie "Genie" Bouchard (; french: Eugénie Bouchard, ; born February 25, 1994) is a Canadian tennis player. At the 2014 Wimbledon Championships, she became the first Canadian-born player representing Canada to reach the final of a Grand Slam t ...

and

Sean Connery Sir Sean Connery (born Thomas Connery; 25 August 1930 – 31 October 2020) was a Scottish actor. He was the first actor to portray fictional British secret agent James Bond on film, starring in seven Bond films between 1962 and 1983. Origina ...

. Tax residency certificates are issued to individuals who spend at least 90 days in the Bahamas and under 184 days in any other single country and purchase a property worth in excess of $1.5 million. Tax revenues made up 22.4% of

gross domestic product Gross domestic product (GDP) is a money, monetary Measurement in economics, measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjec ...

(GDP) in the Bahamas in 2016. The Bahamas has not entered into any double tax agreements.

Income and individual taxes

The Bahamas does not impose income tax, inheritance tax or

wealth tax A wealth tax (also called a capital tax or equity tax) is a tax on an entity's holdings of assets. This includes the total value of personal assets, including cash, bank deposits, real estate, assets in insurance and pension plans, ownershi ...

Social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specificall ...

tax is payable to the National Insurance Board at 3.9% by employees and 5.9% by employers, or 8.8% for self-employed individuals, up to maximum amounts.

Property taxes

Property tax A property tax or millage rate is an ad valorem tax on the value of a property.In the OECD classification scheme, tax on property includes "taxes on immovable property or net wealth, taxes on the change of ownership of property through inheri ...

is imposed on all properties, with the rate for residential properties dependent on whether the home was occupied by its owner for at least six months of the calendar year, under reforms introduced in 2019. If the residency requirement is met, the first $250,000 of property value is exempted, while the value up to $500,000 is taxed at a rate of 0.75% and at 1% on value in excess of $500,000. If the residency requirement is failed, a 1% tax is imposed for the value up to $500,000 of assessed value and 2% for the value in excess of $500,000. Prior to 2019, property taxes were capped annually at $500,000. Furthermore,

stamp duty Stamp duty is a tax that is levied on single property purchases or documents (including, historically, the majority of legal documents such as cheques, receipts, military commissions, marriage licences and land transactions). A physical revenu ...

is payable on the transfer of realty and marina slips, at 2.5% for valuations under $100,000 and 10% over $100,000.

Corporate taxes

There is no corporate tax,

withholding tax Tax withholding, also known as tax retention, Pay-as-You-Go, Pay-as-You-Earn, Tax deduction at source or a ''Prélèvement à la source'', is income tax paid to the government by the payer of the income rather than by the recipient of the income ...

payroll tax Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the em ...

transfer tax A transfer tax is a tax on the passing of title to property from one person (or entity) to another. In a narrow legal sense, a transfer tax is essentially a transaction fee imposed on the transfer of title to property from one entity to another. ...

levied on businesses in the Bahamas. However, businesses require a licence to operate, which is charged at either a flat-rate of $100 or at up to 3% of turnover depending on the amount of revenue generated.

Value added tax (VAT)

value added tax A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. It is levied on the price of a product or service at each stage of production, distribution, or sale to the end ...

applies to a majority of transactions at a rate of 12%. The VAT was increased from 7.5% in 2018. The VAT was introduced in 2015, replacing a 10% tax on hotel lodgings. A number of essential items, such as grocery staples, medicines and property insurance, are exempt from VAT.

Import duties

Import duties are applied to a wide variety of goods being brought into the Bahamas. The

Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance. Lists of current ministries of finance Named "Ministry" * Ministry of Finance (Afghanistan) * Ministry of Finance and Ec ...

maintains a list of commonly imported items, each with its own import duty payable before release to the owner, which can range from zero to 75% of the item's value. VAT, stamp duties and fixed-price environmental levies are also applicable to some imported goods applied at various rates.

References

{{DEFAULTSORT:Taxation In The British Virgin Islands

Bahamas The Bahamas (), officially the Commonwealth of The Bahamas, is an island country within the Lucayan Archipelago of the West Indies in the Atlantic Ocean, North Atlantic. It takes up 97% of the Lucayan Archipelago's land area and is home to ...

Economy of the Bahamas