Barbados

Basis – Companies incorporated under the International Business Companies act are restricted to trade with CARICOM residents and are subject to tax on their foreign-source income.

Tax rate – International Business Companies (IBCs) deriving income solely from sources outside Barbados are taxed at regressive rates: 2.50% on net income up to BBD 10,000,000, 2% on net income between BBD 10,000,000 and BBD 20,000,000, 1.5% on net income between BBD 20,000,000 and BBD 30,000,000 and 0.25% on net income in excess of BBD 30,000,000.

Capital gains - Capital Gains are not taxable in Barbados.

Dividends – Dividends received from foreign entities may be tax-exempt, provided that the Barbados company holds at least 10% of the capital of the foreign entity the shares are not held as a portfolio investment.

Interests - Interest income is subject to taxation at standard rates.

Royalties – Royalty income is subject to income tax.

Foreign-source income – International Business Companies pay tax on their income accrued offshore. A tax credit for taxes paid outside Barbados is usually available, provided that this does not reduce the company's corporate income tax rate in Barbados to less than 0.25%.

Withholding taxes – International business companies are not required to pay withholding taxes on their remittance of dividends, royalties, interest, management fees, fees, or other income paid by IBCs to persons outside Barbados.

Losses – Losses arising from taxable income may be carried forward for 9 years. Carryback of losses is not allowed.

Inventory - Inventory valuations are generally stated at the lower of cost and net realisable value. First in first out method (FIFO) or average values may be used for book and tax purposes. Last in first out (LIFO) is not allowed for tax purposes.

Anti-avoidance rules – Barbados has not enacted transfer pricing regulations, although revenue authorities may amend assessable income of a company where they deem that the main purpose of a non-arm's-length transaction is to artificially reduce its assessable income. Thin capitalization and controlled foreign companies rules are not applicable.

Labor taxes – Employers and employees are required to make contributions to the National Insurance fund at 11.25% and 10.25 on employees’ monthly income, respectively, up to a maximum of insurable earnings of BBD 4,360 per month or BBD 1,006 per week.

Tax credits and incentives – A tax credit for taxes paid outside Barbados is usually available, provided that this does not reduce the company's corporate income tax rate in Barbados to less than 0.25%.

IBCs benefits from freedom from exchange controls, as well as duty-free concessions on certain imports.

Compliance – On average, a company in Barbados may require 28 payments and 237 hours per year to prepare, file and pay taxes.

Personal income tax – An individual is tax resident in Barbados if spends more than 182 in Barbados in a tax year. Residents are taxed on their worldwide income, while non-residents pay taxes on their Barbados-source income.

Income tax rate is 16% on the first BBD 35,000 and 33.5% on the excess. Capital gains are not subject to taxation.

Other taxes – V.A.T. standard rate in Barbados is 17.5%. A rate of 8.75% is applied on hotel accommodation. An increased 22% applies to mobile phone services. There are several goods and services tax-exempt.

Real property tax is levied on building and lands on their property value. Tax rate ranges from 0.1% to 0.75%, being the first BBD 150,000 zero-rated. Certain transactions are subject to a stamp duty. For transfer of real property is levied a 1% stamp duty.

There are no inheritance and wealth taxes in Barbados.