OVERVIEW
The Bahamas Government, aware of the importance to the economy of the continued development of the Bahamas as an offshore financial center, has given assurances that there is no intention to introduce income tax.
INCOME TAXES ON CORPORATIONS
1. Rates
Currently in the Bahamas there is no corporate tax.
3. Capital Gains
There are no capital gains taxes.
INCOME TAXES ON INDIVIDUALS
9. Rates
Currently in the Bahamas there are no income taxes or wealth taxes.
11. Capital Gains Taxes
The Bahamas do not impose tax on capital gains.
INCOME TAXES ON NONRESIDENTS
19. Tax Treaties
The Bahamas has no double taxation treaties with other countries; consequently, interest and dividend income derived from sources in foreign countries are subjected to the full withholding tax deduction applicable in those countries.
The Bahamas has signed a mutual legal assistance treaty with the United States, which permits the exchange of information in cases considered criminal violations under Bahamian law, but the agreement specifically exempts investigations related to tax matters.
OTHER SIGNIFICANT TAXES
21. Sales (Value-Added) Taxes
There is no sales tax in the Bahamas.
22. Inheritance and Gift Taxes
The Bahamas government does not impose estate, inheritance, or death duties or taxes. Also, there is no gift tax.
24. Taxes on Natural Resources
Real Property Tax. Persons owning real property in the Bahamas are assessable annually to real property tax in respect of such holdings. The tax is payable on the assessed value of the property as determined by the Chief Valuation Officer of The Commonwealth of the Bahamas.
The rate of tax payable is as follows:
Assessed Value
First Over $100,000 First Excess Over
$100,000 Not Over $500,000 $500,000 $500,000
Owner-occupied (residential) exempt 1.00% ?1.50%
Other property ?? 1.00% 2.00%
Real property also is subject to stamp tax (see item 25).
25. Other Taxes
The government derives its principal revenue from import duties on all goods arriving in the Bahamas, with the exception of certain basic food items and supplies. In addition, other revenue-raising taxes include the following:
q Business license fee;
q Stamp tax;
q Insurance premium tax;
q Casino tax.
Business License Fee. The business license fee is assessable annually on all domestic business enterprises operating in the Bahamas, except banks, trust companies, and insurance companies. The fee is calculated on turnover (total sales or revenues), and the fee rate is dependent on the gross profit. The rates range from 0.5% (low profit) of turnover for businesses with gross profit under 25%, to 1.50% (very high profit) of turnover for businesses with gross profit in excess of 75%, up to a maximum fee charged of $500,000. Businesses with turnover below $50,000 are exempt from the payment of a fee.
IBCs and companies designated as nonresident under the Exchange Control Regulations Act (companies that are foreign owned and do not trade in the Bahamas) pay a fee of $100 per year.
Stamp Tax. A nominal rate of stamp tax is levied on the execution of a variety of commercial documents. However, the highest incident of stamp tax is on property conveyances graded as follows:
Property Value Rate of Tax
$ 0 ?$ 20,000 3%
20,000 ?50,000 5
50,000 ?100,000 7
Over 100,000 10
The vendor is responsible in law for the stamp tax on the sale of real property; however, it is customary that the vendor and the purchaser share the tax burden.
Insurance Premium Tax. Registered insurers writing domestic risks pay a premium tax of 2% of gross premiums. Tax is not assessable on premiums relating to the writing of foreign risks.
Casino Tax. A casino is assessable to a tax on the gross gaming receipts of up to 25% on a graduated scale.
RELATED CONSIDERATIONS
34. Incentives and Grants
Under various incentive legislation, foreign investors have been granted statutory exemption from direct taxes (which do not presently exist in the Bahamas) and from most forms of indirect taxes. International business companies (IBCs) are statutorily e
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