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Personal Tax Advice in Barbados
Last Updated 12/11/2024
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BARBADOS PERSONAL TAX OVERVIEW
In Barbados, your tax situation depends on whether you are a resident, non-resident, or domiciled in the country. Here’s how it works:
- If you are both a resident and domiciled in Barbados, you’ll be taxed on your worldwide income.
- If you are a resident but not domiciled in Barbados, you’ll be taxed on income from Barbados and any income earned outside the country, provided that you receive a benefit in Barbados.
- Non-resident individuals are taxed only on income arising in Barbados and are not entitled to personal deductions against income.
PERSONAL INCOME TAX RATES
Effective from January 1, 2020, the basic income tax rate is 12.5%, and the higher rate is 28.5%.
The 12.5% basic rate applies to the first BBD 50,000 of taxable income, while the 28.5% rate applies to taxable income above BBD 50,000.
Tax Rate Table (from January 1, 2020):
|
Taxable Income (BBD) |
Tax on Column 1 (BBD) |
Tax on Excess (%) |
|---|---|---|
|
0 – 50,000 |
6,250 |
12.5 |
|
Over 50,000 |
28.5 |
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Residency and Domicile in Barbados
In Barbados, your tax situation depends on your residency and domicile status. This guide will help you understand how to determine if you are a resident or domiciled in Barbados.
Residency Criteria:
An individual is considered a resident in Barbados if they meet one of the following conditions in an income (calendar) year:
- They spend more than 182 days in the country. Both the days of arrival and departure are included in this count.
- They are considered “ordinarily resident” in Barbados. This means they have a permanent home available for their use in the country and have informed the Revenue Commissioner of their intention to live in Barbados for at least two consecutive income years.
Domicile:
Domicile is different from residency and is based on an individual’s intention. Long-term residence in Barbados does not automatically make someone domiciled in the country. Domicile is often connected to a person’s permanent home or the country they intend to return to and make their permanent residence.
Conclusion:
Understanding the criteria for residency and domicile in Barbados is essential for determining your tax situation.
By knowing whether you are a resident or domiciled in Barbados, you can better understand your tax obligations and plan accordingly.
Types of personal income and gains
In Barbados, various types of income are subject to taxation. This guide will help you understand how different types of income, such as employment income, investment income, and rental income, are treated for tax purposes.
Employment Income:
Employment income includes salary, bonuses, commissions, and other benefits, like housing or meals, received during the income year. If an employee receives rent-free accommodation, they are taxed on the value of this benefit, up to a maximum of BBD 48,000 per year.
Qualified foreign employees working in the international financial services sector may have up to 60% of their income exempt from tax under certain conditions.
Capital Gains:
Barbados does not impose a capital gains tax.
Investment Income:
Investment income, such as interest, dividends, rents, royalties, professional fees, business profits, and annuities, is subject to tax. If you are a resident but not domiciled in Barbados, any investment income remitted to Barbados is also taxable. However, 50% of royalties received are tax-exempt.
Dividend Income:
A 15% withholding tax is applied to dividends paid to resident individuals by local companies if the dividends come from profits earned after 30 June 1992. This tax covers the individual’s full tax liability on these dividends. For dividends paid from profits earned before 1 July 1992, no withholding tax applies, but the dividend must be increased by 15% and is then taxed at the individual’s marginal income tax rate. A 15% dividend tax credit is available.
Interest Income:
A 15% withholding tax applies to local interest over BBD 100 paid or credited to resident individuals’ accounts. This tax covers the individual’s full tax liability on this interest. No tax is withheld from interest paid to pensioners aged 60 and above.
Interest credited to a special savings account, known as an “Education Savings Plan Account,” is exempt from tax.
Rental Income:
Income from residential property is subject to a 15% tax rate.
Conclusion
Understanding how different types of income are taxed in Barbados is essential for managing your tax obligations. By knowing the tax treatment of various income sources, you can better plan your financial decisions and minimize your tax burden.
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TAX NATIVES: CURATOR — CuratorThe Curator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. |
Become a creator
TAX NATIVES: CREATOR — CreatorThe Creator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. However, the Creator has additional responsibilities. They commit to their other Natives that they will produce at least one piece of quality content each quarter – whether an article, video or other valuable content. There are multiple Creator memberships available for each jurisdiction. Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee. |
Become an adviser
TAX NATIVES: ADVISOR — AdviserThe Adviser is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives. The Adviser Native is a care-free soul and has made no other commitments to his fellow Tax Natives to generate content or curate a jurisdictional page. That's cool. However, the Adviser will be eligible to pay the full monthly membership fee. |
|
|---|---|---|---|
| Initial admin fee | £250 Free | £250 Free | £250 Free |
| Minimum membership term | 12 months | 12 months | 12 months |
Article contentCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
No | YesCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
No |
| Managing and updating your jurisdiction page |
Yes |
No |
No |
NATIVE
FREE
Read moreTAX NATIVES: CURATOR —
Curator
The Curator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.
However, the Curator has additional responsibilities. They are tasked with the responsibility of managing and updating one of the jurisdiction pages.
There is only one Curator membership available for each jurisdiction.
Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee.
| Initial admin fee | £250 Free |
| Minimum membership term | 12 months |
Article contentCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
No |
| Managing and updating your jurisdiction page | Yes |
FREE
Read moreTAX NATIVES: CREATOR —
Creator
The Creator is a fully-fledged member of the Tax Natives team. As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.
However, the Creator has additional responsibilities. They commit to their other Natives that they will produce at least one piece of quality content each quarter – whether an article, video or other valuable content.
There are multiple Creator memberships available for each jurisdiction. Where a Curator fulfils their commitments then they receive a 100% discount against their monthly membership fee.
| Initial admin fee | £250 Free |
| Minimum membership term | 12 months |
Content creationCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
YesCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
| Managing and updating your jurisdiction page | No |
£65 / month
Read moreTAX NATIVES: ADVISOR —
Adviser
The Adviser is a fully-fledged member of the Tax Natives team.
As such, they are capable of making introductions to other Tax Natives and are also able to take leads from their fellow Natives.
The Adviser Native is a care-free soul and has made no other commitments to his fellow Tax Natives to generate content or curate a jurisdictional page.
That's cool.
However, the Adviser will be eligible to pay the full monthly membership fee.
| Initial admin fee | £250 Free |
| Minimum membership term | 12 months |
Content creationCreator and Curators must create at least one piece of original, quality-approved content each quarter. |
No |
| Managing and updating your jurisdiction page | No |
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