MAJOR DEVELOPMENTS
The 1997 Budget was not expected to be finalized by Parliament until after September 1997. The changes in the 1996 Budget were enacted only in December 1996, and the proposals made in that Budget regarding mutual funds may have had limited effect due to the enabling legislation not having been made.
q Value-Added Tax. The much-debated VAT was eventually enacted and became effective January 1, 1997. This act replaced the airline business tax, consumption tax, entertainment tax, hotel and restaurant sales tax, tax on quarriable minerals, stamp duty on imports, luxury surcharge on imports, surcharge on overseas telephone calls, surcharge on rents, tax on pleasure cruises, and travel ticket tax. Certain amendments have already been made to the Act, and it is expected that further changes will be announced in the 1997 Budget, which has been delayed
to assess the full impact of the VAT.
q Excise Tax Act. Along with the Value-Added Tax Act, a new Excise Tax Act was enacted. This act ensures that the prices of spirits, petroleum products, vehicles, and tobacco remain the same as under the consumption tax and stamp duty regimes.
q Mutual Funds. Draft legislation has been circulated on the
provisions to govern those local companies that seek to benefit from the mutual fund incentives provided in the last Budget. Individual investors were granted a deduction from the 1996 income year of a maximum of $10,000 in either the purchase of new shares in public companies or mutual funds, or in any combination of the two.
q Shipping Corporations Act. Under this legislation, the formation and operation of shipping corporations is facilitated. A body corporate may be established to own and operate ships or to do anything necessary or incidental to the ownership and operation of such ships. A company registered under this act may conduct its affairs and exercise its
powers in any jurisdiction outside Barbados in accordance with the
laws of Barbados. A fee is payable for individuals certified to operate ships registered under the act, and there is a ship抯 registration fee based on the tonnage for ever ship registered as a Barbadian ship.
INCOME TAXES ON CORPORATIONS
1.Rates
The standard rate of corporation tax for resident and nonresident corporations is 40%. Life insurance companies are subject to tax on gross investment income at the rate of 5% and to a premium tax. Resident life insurance companies pay premium tax at 3% on renewal business, and both resident and onresident companies pay 5% on other business. General insurance companies are subject to tax at 40%, and, in addition, both resident and nonresident companies pay 5% on property insurance and 3% on other business. Nonresident corporations are taxed at 15% on
local dividend interest, royalties, and management fees. Resident companies are taxable on income from all sources except local dividends.
Under the provisions of the Caricom Tax Treaty, the income arising in a territory is subject to tax only in the source country.
2.Local Income Taxes
None.
3.Capital Gains Taxes
None.
4.Branch Profits Taxes
In addition to corporation tax at 40%, branch profits are subject to a further 10% tax on remittances or deemed remittances.
5.Foreign Tax Reliefs
Resident corporations are granted relief on taxed foreign income. In addition to the Commonwealth Double Taxation Agreement, double taxation agreements are in force with Canada, Finland, Norway, Sweden, Switzerland, the United Kingdom, and the United States. Barbados is working on agreements with Brazil, Chile, Mexico, and Venezuela. Bilateral Investment Protection Agreements have been signed with Canada, Cuba, Germany, Switzerland, the United Kingdom, and Venezuela.
A Caricom Double Taxation Agreement has been signed by members of the Caribbean Community but has been ratified only by Barbados, Belize, Grenada, St. Lucia, and Trinidad and Tobago.
6. Classification of Corporations
The distinctions between corporations basically are not relevant for tax purposes. However, companies controlled by five or fewer persons are subject to special rules with respect to undistributed profits and loans to directors and hareholders.
7. Payment of Taxes
Corporations are required to pay tax by installments on a current-year basis. The dates on which the installments are due and the number of installments payable depend on the company fiscal period.
Corporations with fiscal periods ending between January 1 and September 30 prepay 50% of the previous year tax on September 15. The balance of tax due is payable on filing the return on the following March 15.
Corporations with fiscal periods ending between October 1 and December 31 prepay 50% of the previous year tax on December 15 and a second installment of 50% of the previous year tax
[1] [2] [3] [4] 下一页
