BAHAMAS Law and Practice Contributed by: Sean Moree KC, Vanessa Smith and Erin Hill, McKinney, Bancroft & Hughes
1. Tax 1.1 Tax Regimes
• transfers to a personal representative or trustee upon the death or bankruptcy of the property owner; • instruments relating to the vesting of real property to a beneficiary in accordance with the provisions of a trust; and • conveyances by way of assent transferring real property from a legal representative to the benefi - ciary under a will or letters of administration. 1.3 Income Tax Planning The Bahamas does not have income tax. 1.4 Pre-Immigration and Exit Planning Due to The Bahamas not having income, corporate or capital gains tax, it does not have a conventional “pre- immigration” or “exit tax” planning regime in the way that other countries such as the US, Canada, Australia or the UK may. The real planning opportunity is usually cross-border planning around the person’s country of departure and any countries in which they retain tax connections. 1.5 Taxation of Real Estate Owned by Non- Residents and Non-Citizens Save for two exceptions, the rate of real property tax assessed on real estate in The Bahamas is the same for citizens, non-citizens, residents and non-residents. Vacant land and property located on any island in The Bahamas (other than New Providence) that is owned by a Bahamian citizen is exempt from real property tax. Such an exemption does not apply where the land is owned by a non-citizen of The Bahamas. 1.6 Stability of Tax Laws While the VAT, stamp duty and real property tax legis - lation are regularly amended, there should be no fear of tax uncertainty as it is important for clients to have an up-to-date understanding of those tax regimes when making tax and estate planning decisions. 1.7 Transparency and Increased Global Reporting The Bahamas has significantly strengthened its inter - national tax transparency and anti-abuse framework. It participates in the OECD’s Common Reporting Standard (CRS) for the automatic exchange of finan -
The Bahamas does not have income, estate or inherit - ance tax. The Bahamian government recently imple - mented a Qualified Domestic Minimum Top-Up Tax, which only affects multinational enterprises with annu - al turnovers exceeding EUR750 million. The Domestic Minimum Top-Up Tax Act, enacted on 29 November 2024, introduces an effective tax rate of 15% for mul - tinational entities operating in The Bahamas that have annual consolidated revenue of or above EUR750 mil - lion in two of the last four years. The other tax regimes that currently exist in The Baha - mas that may be relevant to individual clients, estates, trusts and foundations include value added tax (VAT), stamp duty and real property tax. 1.2 Exemptions Generally, the transfer of real property in The Bahamas will attract VAT at a rate of 10%. However, there are exceptions. Certain transfers of real property may qualify as an inter vivos gift, which results in the transfer being zero rated, meaning that it will attract VAT but at a rate of 0%. Examples of real property transfers that may qualify as an inter vivos gift include: • transfers to a spouse, parent, adult child, adult grandchild or remoter issue; • transfers from an individual to a company in which the beneficial owners are the transferor, the trans - feror’s spouse, the transferor’s adult children and/ or adult remoter issue; • transfers to a trustee where the terms of the trust instrument exclude every person except for the transferor and the transferor’s spouse, parents, children or remoter issue from taking or receiving any title to the trust property; and • transfers from an individual to a foundation whose only beneficiaries are the transferor and/or the transferor’s spouse and/or the transferor’s children or remoter issue. The following real property transfers are also zero rated:
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