The government charges Consumption Tax on most of the products and services in the Bahamas. In brief, it is levied on the products and services provided by businesses that are registered.
Similarly, those services and goods are also charged VAT imported from outside the Bahamas; at present, there are two VAT rates in the Bahamas, a standard rate of 12% and a zero-rated VAT. On the other hand, some products and services are exempted from VAT, for instance, goods exported abroad to customers.
History of the VAT in the Bahamas:
VAT was introduced for the first in the Bahamas in January of 2015. The switch from Sales to Value-Added-Tax, which occurred in 2015, was widely celebrated since it meant a 2.5% decrease in Tourists’ taxes since the Hotel Accommodation Tax saw a decrease from 10% to 7.5%.
However, the VAT rate saw a shocking increase to 12% on July 1st, 2018. This was because the Government took $2 Billion in new loans last year, and an increase of 4.5% in VAT was done to help the Government. But this increase is predicted to impact tourism negatively, and some forecasts even warn of a 10% decrease in tourism. For further details, you can also visit here.
Goods and Services Exempted from VAT in the Bahamas:
Some several products and services are exempted from VAT in the Bahamas, for instance:
- School Tuition
- Services that relate to Land Located outside The Bahamas
- Living Quarter’s Rent
- Professional Services that will be received by those who are outside The Bahamas
- Life Insurance Sales
- Goods physically removed from the Bahamas
- Transfer of Business among registrants
- Good outside the Bahamas at the time of Supply
- Dwelling Rental
- Domestic Financial Services
- Certain Charitable Activities
2018 VAT increase resulted in additional items getting excluded from VAT, for example:
- Residential Property Insurance
- Many Grocery Items
- Utility Bills under specific amounts
- For Water: $50
- For Power: $100
Also you can check Vat Calculator for Argentina
Q: How is VAT calculated in the Bahamas?
VAT is calculated in the Bahamas by multiplying the product’s price or service by the 12% VAT rate. You can use our Online Calculator to calculate VAT for the Bahamas.
Q: Can you get the VAT back in the Bahamas?
No, VAT cannot be refunded in the Bahamas.
Q: Is the Bahamas Tax-Free?
There is neither an Income tax nor a Capital Gains tax in the Bahamas. Additionally, Capital Transfer Tax and Estate Tax also do not exist there. The Employee pays a National Insurance Contribution at a rate of 4.9% and by the Employer at the rate of 5.9%.
Q: Are the Bahamas expensive to live in?
Yes, the cost of living in the Bahamas is more expensive than other retirement destinations, but it makes up for it with its affordable homes and idyllic quality of Life.
Q: What is the tax rate in the Bahamas?
The Tax rate in the Bahamas was previously 7.5%, but it saw a 4.5% increase in 2018 when it suddenly changed to 12%.