The Government of The Bahamas has implemented Value Added Tax ("VAT") effective 01 January 2015. It is mandated by law that VAT be charged upon all invoices issued in The Bahamas in respect of goods and/or services except in the case of a very limited number of exemptions. VAT taxes will be remitted to The Bahamas Government.
VAT charged at 0% re non-residents / 7.5% re residents
The application of VAT is focused upon the domestic economy. Accordingly, services supplied to persons deemed non-resident attract a 0% (nil) rating of VAT. A non-resident is a person carrying on no taxable activity in The Bahamas. The effect of this is that a 0% (nil) rate of VAT will apply to much of the services related to the international financial industry, international business companies and their supporting legal and accounting services.
The applicable rate of VAT charged upon goods or services supplied to a resident is the standard rate of 7.5%. A resident is a person carrying on a taxable or other activity in The Bahamas and includes the Government, and a citizen or permanent resident of The Bahamas.
* Value Added Tax Act, 2014
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.