Financial Crime World

The Bahamas: A Guide to Taxes and Business Requirements

Introduction

The Bahamas offers a favorable business environment for international businesses, with a range of tax benefits and competitive regulations. However, understanding the local tax laws and requirements can be complex. This article provides an overview of the key points and frequently asked questions related to taxes and business requirements in the Bahamas.

Key Points

Property Tax

  • The Bahamas has a property tax regime that varies based on whether the property is commercial or owner-occupied.
  • Commercial properties are subject to a higher rate than owner-occupied properties.

Social Security Contributions

  • Employers and employees must pay 9.8% of their monthly income towards social security contributions, with a cap of $3,077 BSD per month.

Stamp Duties

  • Large international money transfers and real estate purchases above $100,000 are subject to stamp duties ranging from 2.5% to 10%.

Import Duty

  • Import duty varies based on the type of goods and can range from 0% to 220%.

Value-Added Tax (VAT)

  • VAT is applied at a rate of 10% or zero rate, depending on the good or service.

Frequently Asked Questions

Financial Statements

  • What is the time limit for preparation and submission of financial statements?
    • No financial statement is required to be filed by IBCs in the Bahamas, but a declaration regarding the accessibility of accounting records must be filed by September 30th with the Registrar.

Audit Requirements

  • What are the audit requirements in the Bahamas?
    • There is no audit requirement for IBCs in the Bahamas, but companies incorporated under the Companies Act of 1992 must get their financial statements audited as per International Standards on Audit.

Taxation

  • Is the Bahamas a Tax Haven?
    • Yes, the Bahamas is considered a tax haven due to its lack of personal income tax, capital gains tax, inheritance tax, gift tax, wealth tax, and taxes on shares dividends and interests.
  • Are there no taxes in the Bahamas at all?
    • No, the government of the Bahamas collects tax revenue from property tax, import and export duties, stamp duties, social security contributions, and license fees.

Tax Compliance Certificate

  • What is TCC?
    • TCC stands for Tax Compliance Certificate, which is necessary for doing business with the Government of the Bahamas.