Taxes in Barbados

Income tax began in Barbados in 1921, however, in 1969 the program was revamped and the Income Tax Act Cap. 73 took effect. It has been amended and adjusted over time to the tax laws and regulations we have in Barbados today. Income tax is paid on property, businesses, offices and employment.
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According to the Barbados Revenue Authority, the 2015 taxable income amounts are unchanged from previous years.

taxes in Barbados
Individual Income Taxable beginning in 2009 and through the current year is:

  • 20% is payable on the first $24,200.00 of taxable income
  • 35% will be due on the taxable income in excess of $24,200.00

One commonly asked question is regarding the National Insurance Contribution. Many people want to know if they can deduct the National Insurance Contribution’s that were deducted from their wages or salary.

The answer is no. Individuals cannot deduct their National Insurance Contribution, but employers can claim the deduction of the amount they paid on behalf of the employee for their National Insurance Contribution.

On another note, a self employed person cannot deduct the National Insurance Contributions either.
All individuals must include income from any and all sources, and the income must include all employment, even if the individual has an additional part time income. Also included are rental incomes, bonuses, commissions. It does not matter if this income was paid monthly or quarterly.

The Corporate Tax Rate is:

  • 1. 25% of taxable income beginning with 2006 and subsequent years.
  • 2. 15% of taxable income beginning with for approved small businesses, those that are under the Small Business Development Act.
  • 3. 15% taxable income for a company that is engaged in the business of manufacturing.
  • 4. 15% taxable income for a company that is engaged in the construction and sale of houses priced under $ 150,000 (including the price of the of land).
  • 5. 15% taxable income for qualifying business under the Special Development Areas Act, Cap. 318C.
  • 6. 5% taxable income for Life Insurance Companies.

 

Penalties and interest assessed for failure to pay Barbados Income Tax when due:

  • 1. $100.00 and 5% of tax assess, are applied for failure to pay estimated taxes or to deliver a return on or before April 30th
  • 2. A penalty of 5% of the tax estimated or $10.00, whichever is greater, will be applied for failure to pay estimated taxes.
  • 3. A 100% penalty is applied for tax evasion.
  • 4. Interest of 1% per month is additionally applied to both tax and penalty.

The 2015 Barbados tax rate structure has been in place since 2006 for corporations, and since 2009 for individuals. The inclusion of the Value Added Tax, VAT, was the largest most recent change. There are no plans at this time to change the tax rate in the foreseeable future.