Income tax in Barbados
Taxation Researcher | March 05, 2020
INDIVIDUAL TAXATION
Residents are taxed on their worldwide income. Married couples are taxed separately and there is no option for joint taxation.
INCOME TAX
The following categories of income are subject to income tax: (1) business income, (2) income from profession, (3) property income, (4) offices and employment income, (5) dividends and interest, royalties, annuities, (6) directors´ and other fees, retirement allowances, and (7) partnership profits.
The taxable income will be the assessable income less income-generating expenses and allowable deductions. Income from all sources is aggregated and taxed at progressive rates.
INCOME TAX 2019 |
|
| TAXABLE INCOME, BBD (US$) | TAX RATE |
| Up to 35,000 (US$17,500) | 16% |
| 35,000 – 50,000 (US$25,000) | 33.50% |
| Over 50,000 (US$25,000) | 40% on all income over US$25,000 |
| Source: Global Property Guide | |
Taxpayers are allowed to deduct a basic personal allowance of BBD25,000 (US$12,500). Taxpayers aged over 60 years old and receiving a pension is entitled to a basic deduction of BBD40,000 (US$20,000).
RENTAL INCOME
Rental Income Tax
Rental income from residential property is taxed at a special flat rate of 15%. When computing the taxable income, income-generating expenses are deductible.
CAPITAL GAINS
In Barbados, no tax is levied on capital gains. However, regular capital gains on the disposal of real property may be taxed as business income.
Gains on the disposal of land may be subject to the land development duty, which is deductible in computing taxable income.
PROPERTY TAX
Property Taxes
Property tax is levied at different rates, depending on the classification of the property and the property value.
For tax year 2015-2016, vacant land is taxed at a flat rate of 0.80% and non-residential properties is taxed at a flat rate of 0.70%.
For residential properties, property tax is levied on the "improved value" of the property, essentially the fair market value, as determined by the Commissioner of Land Tax. Property tax is levied at progressive rates.
A maximum tax cap of BBD60,000 (US$30,000) has been placed on residential properties. The maximum tax payable on residential properties is BBD60,000 (US$30,000).
PROPERTY TAX 2015-2019 IN RESIDENTIAL PROPERTIES |
|
| TAX BASE, BBD (US$) | |
| Up to 150,000 (US$75,000) | |
| 150,000 - 450,000 (US$225,000) | |
| 450,000 - 1,000,000 (US$500,000) | |
| Over 1,000,000 (US$500,000) | |
| Source: Global Property Guide | |
PROPERTY TAX 2014-2015 IN RESIDENTIAL PROPERTIES |
|
| TAX BASE, BBD (US$) | |
| Up to 190,000 (US$95,000) | |
| 190,000 - 500,000 (US$250,000) | |
| 500,000 - 1,250,000 (US$625,000) | |
| Over 1,250,000 (US$650,000) | |
| Source: Global Property Guide | |
For tax year 2014-2015, vacant land is taxed at a flat rate of 0.60% and non-residential properties is taxed at a flat rate of 0.50%. Residential properties are taxed at progressive rates.
CORPORATE TAXATION
INCOME TAX
Income and capital gains earned by companies are generally subject to corporate income tax at progressive rates. Income-generating expenses are deductible when calculating taxable income.
INCOME TAX 2019 |
|
| TAX BASE, BBD (US$) | TAX RATE |
| Up to 1 million (US$500,000) | 5.50% |
| 1 million – 10 million (US$5 million) | 3% on band over US$500,000 |
| 20 million – 30 million (US$15 million) | 2.50% on band over US$5 million |
| Over 30 million (US$15 million) | 33.50% on all income over US$15 million |
| Source: Global Property Guide | |
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