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The Bahamas Value Added Tax (VAT) is a significant portion of the nation’s tax structure and has an impact on companies and consumers. It is a value-added tax and is levied on most supplies of goods and services sold for consumption in the country.

Important Aspects of VAT in the Bahamas:

  • Current VAT Rate: As of 2025, the standard VAT rate is 10%, reduced from the previous 12% (effective since January 2022).
  • VAT Registration: VAT registration is mandatory for businesses whose annual turnover exceeds BSD 100,000.
  • Taxable Transactions:
    • Domestic sale of goods and services.
    • Import of goods into the Bahamas.
  • Exemptions and Zero-Rated Supplies:
    • Financial services.
    • Medical and educational services.
    • Certain exports may be zero-rated.
  • VAT returns: Companies registered are required to file periodic returns with the Inland Revenue Department.
  • Compliance: Not complying with VAT obligations may attract penalties, interest or cancellation of business operations.

For those who are opening a business or an offshore company in the Bahamas, dealing with VAT can be quite a crucial matter. However, the Bahamas is income and capital gains tax neutral, with VAT attached to local activities. Work with a credible corporate service provider such as Offshore Company Corp to be fully compliant and tax-efficient.

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