Barbados Budget Announced
Barbados recently announcing sweeping changes to its personal income tax and VAT regimes. Effective July 1, 2019, Barbados will remove the 16 percent lowest income tax rate and the second rate of 33.5 percent. Instead, the lowest tax rate on income up to BSD50,000 will be 12.5 percent. The rate on income above this threshold will fall from 40 percent to 33.5 percent, between July 1, 2019, and December 31, 2019, and from January 1, 2020, the rate will fall to 28.5 percent.
However, while this sounds, on the surface of it, to be good news for Barbadians, from May 1, a new obligation has been introduced for foreign suppliers to charge VAT on supplies to consumers in the jurisdiction, in addition to the introduction of a 20 percent withholding tax on gambling winnings from lotteries and betting, new limits on the amount of related-party interest that can be deducted from income derived from a business or property, the introduction, effective September 1, 2019, of a thin capitalization rule, with a ratio of 1.5 to 1, and a commitment to introduce transfer pricing rules in the near future.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look