CORPORATE TAXES
SIGNIFICANT DEVELOPMENTS
Significant changes have been made in the Insurance Act, the Exempt Insurance Act and the Income Tax A ct to provide for the integration of international and local insurance businesses. These changes allow companies registered as local insurers tinder the lnsurance Act to add international business to their present activities and permit interna-tional insurance companies the flexibility to be regulated under the Insurance Act rather than the Exempt Insurance Act in order to transact both international and local business.
There is also a proposal to introduce new legislation for the taxation of small businesses. The suggested criteria for defining a small business are as follows.
1.Share capital of not less than Bds$ 1 million.
2.Annual sales of not more than Bds$2 million.
3. No more than 25 employees.
TAXES ON CORPORATE INCOME
Corporation tax/Corporation tax is levied at the flat rate of 40% on companies, excluding insurance companies and companies subject to differing rates of corporation taxunder specific pieces of incentive legislation. In lieu of corporation tax, life insurance companies are taxed at 5% of gross investment income.
CORPORATE RESIDENCE
A corporation is deemed to be resident in Barbados if it is
incorporated in Barbados or if it is managed and controlled in
Barbados.
OTHER TAXES
Life insurance premium tax/This tax is levied at the following rates on gross direct premium income.
PERCENTAGE or PRFMIUM INCOME
NEW BUSINESS RENEWAL BUSINESS
Resident companies 5 3
Foreign companies 5 5
General insurance premium tax/This tax is levied at the following rates (percentage on premium income) for both resident companies and foreign companies.
%
Property 5
Other 3
Property transfer tax/This tax is assessed on the gross consideration for sales of teal estate or interests in real estate and fur the transfer of shares or debentures issued by or on behalf of a company; as follows. (The tax is not applicable to shares listed on the Barbados Stock Exchange.)
%
Vendors who are citizens or permanent residents of Barbados 5
Vendors who are not citizens or Permanent residents of Barbados 8
Purchasers who are riot citizens or permanent residents of Barbados . .
. . 10
An exemption of Bds50,000 for the sale of shares or debentures and l3ds$25,000 for the sale of land on which a building exists is granted to citizen and permanent resident vendors only.
Land tax/Land tax is levied on the site value of land, or the improved value where a building exists, at the following rates.
1.On unimproved sites:
a. Value up to Bds$ 1 0,000: 0.8% to maximum to Bds$50;
b. Thereafter: 0.8%.
2.Improved value:
a.Owner-occupied residence or residence occupied by owner's
immediate family:
i.Up to Bds$ 100,000: 0.3%;
ii.Thereafter: 0.8%;
b.All other properties: 0.8%.
Land tax for hotels and for residential properties owned by pensioners is calculated on 50% of the improved value of the property. Otherwise, for owner-occupied residences, residences occupied by an owner's immediate family or property used as a residential property, the land tax is calculated on 70% of the improved value of the property.
Tax on b
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