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Bahamas VAT

The Bahamian Government has announced plans to introduce VAT as of July 2014. They have stated that this will offset reductions in import duty rates that will accompany the Bahamas accession to the World Trade Organisation.

From July 2014 the Bahamas will apply a 15% VAT to most goods and services. This will replace the existing Hotel Occupancy Tax, but hotels will get a 10% concessionary rate including food and drink sold on their premises. A zero rate will apply to exports and international transport of goods and passengers. Exempt transactions will include financial services, transfers of leases of land and residential buildings, agriculture and fisheries, social and community services, health and education services. The VAT threshold will be set at USD50,000. Thousands of local businesses will be expected to register and remit on a monthly basis.

The government is set to review initial drafts of the new legislation and this will be available for public consultation early in the new fiscal year.

The State minister Halkitis has spoken to stakeholders and explained that ‘While VAT is in widespread use around the globe, we want to ensure that its key design and operational features are attuned to the Bahamian context.’

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