INDIVIDUAL TAXATION

Residents are generally liable to pay tax on their worldwide income but individuals who reside in Belize but are domiciled elsewhere are only subject to tax on their Belize-sourced income.

Residents pay only 5% stamp duty when purchasing property.

INCOME TAX

Income is classified according to sources and is taxed accordingly.

Employment Income Tax

Income from employment is taxed at progressive rates, from 25% to 45%. Income up to a certain threshold amount is exempted from taxation.

Business Tax

Residents engaged in business in Belize are charged business tax, depending on the nature of their income:

RENTAL INCOME

Business Tax

Gross rental income is subject to business tax at a rate of 3%. Business tax is due monthly and is generally a final tax.

If taxpayers want to deduct income-generating expenses, they can opt to file an income tax return at the end of the tax year.

Income Tax

Taxpayers can claim expense allowance when they file their income taxes. The process is as follows:

1. Compute for the total business taxes paid for the tax year.
2. Compute for the income tax payable, deducting income generating expenses from the gross revenue.
3. Compare results. If the income tax payable is bigger than the business tax, the taxpayer doesn’t have to pay the difference. If the business tax is greater, proceed to the next step.
4. Subtract income tax payable from business tax.
5. Use the difference as an expense allowance on the profit and loss statement when submitting the income tax return for the year.

Deductible income-generating expenses are as follows: repairs, property taxes, insurance, and mortgage payments.

CAPITAL GAINS
There is no capital gains tax in Belize.

PROPERTY TAX

Property Tax

Property taxes are levied on actual rental income of the property (if it is rented out) or on the assessed rental values, which are likely to be underestimated by the authorities. The tax is levied at 9% for occupied properties located in urban areas but the tax rate varies between 2% to 9% in other municipalities.

In Belize, property taxes outside cities are based on land value rather than the developed value of the property, to encourage development. Tax rates vary between 1% and 1.5% of the value of the undeveloped land.