SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in the last year.
TERRITORIALITY AND RESIDENCE
An individual who is both resident and domiciled in Barbados is taxed on worldwide income.
Individuals who are resident but not domiciled in Barbados are taxed on income derived from Barbados and on income from any other sources outside Barbados, to the extent that a benefit is received in Barbados.
An individual becomes resident by spending in the aggregate more than 182 days in Barbados in an income(calendar)year or by being ordinarily resident in Barbados in the relevant income year. An individual is considered to be ordinarily resident who has permanent accommodation available for personal use in Barbados and gives notice to the Commissioner of Inland Revenue of intent to reside in Barbados for a period of at least two consecutive income years. In calculating the number of days, the days of departure and arrival are included.
Domicile is question of intention, and long-term residence does not necessarily determine domicile. In general, a nonresident individual is not entitled to personal deductions against income and is taxed only on income derived from Barbados.
GROSS INCOME
Employee gross income/ Income includes salary, bonuses, commissions, and the value of all other benefits, whether or not in money, including housing. Cash housing allowances are treated as salary. The provision of rent-free accommodation gives rise to a taxable benefit to the employee up to a maximum of Bds$14,400 per year. There are special concessions for appropriately qualified foreign employees of corporations engaged in the international financial services sector, whereby up to 35% of their remuneration may be exempt from tax, if approved by the relevant government minister.
Capital gains and investment income/ Barbados does not have a capital gains tax. Interest, dividends (except dividends received from companies resident in certain other Caricom countries), rents, royalties,professional fees, business profits, and annuities are all subject to tax, as is any type of investment income brought into Barbados by short-term residents. One-half of amounts received as royalties is exempt from tax.
DEDUCTIONS
Business deductions/Where an individual is carrying on a trade, business, profession, or vocation, expenses are generally deductible if they are incurred for the purpose of producing assessable income for the enterprise.
Employees may deduct only unreimbursed expenditures incurred for traveling and entertaining in the performance of their duties. Depreciation of a motor vehicle is not deductible. Moving expenses to or from Barbados paid by an employer are not taxed.
Nonbusiness expenses/ Deductions are allowed for the following.
1.Savings with a cooperative society (up to Bds$3,000 per annum after an initial period of two years).
2.Bonuses converted into shares of the employing company (up to a limit of the lesser of Bds$7,500 or 75% of the value of the bonus payable).
3.Bonuses paid by companies that do not offer shares to their employees converted into bonds, debentures, or stock of the Government of Barbados or invested in mutual funds (up to a limit of the lesser of Bds$7,500 or 75% of the value of the bonus payable).
4.Payments under deed of covenant (up to a limit of 10% of assessable income where payments are to a benevolent organization and 5% of assessable income where payments are to minors or incapacitated individuals).
5.Contributions to a registered retirement plan (up to a limit of the lesser of Bds$4,000 or 15% of assessable income); contributions to a registered retirement plan savings plan (up to a limit of the lesser of Bds$4,000 or 15% of assessable income). Where contributions are made to both a registered retirement plan and a registered retirement savings plan, the combined contributions are limited to a maximum of the lesser of Bds$6,000 or 15% of assessable income.
6.A housing allowance of Bds$3,500 for repairs, renovations, mortgage interest, and water-and energy-saving devices for residents of owner-occupied houses.
7.Purchase of new shares in a public company and/ or a mutual fund (up to a limit of Bds$10,000) and contributions to a venture capital fund (up to a limit of Bds$10,000).
8.Personal allowances/Residents of Barbados can claim the following allowances.
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