BAHAMAS Law and Practice Contributed by: Judith Whitehead KC, Graham Thompson
informed of the main terms and conditions of the employment, job requirements, reporting requirements, disciplinary and grievance proce - dures, safety and health rules, and the conclu - sions reached through negotiations and consul - tation with the employer. 5. Tax Law 5.1 Taxes Applicable to Employees/ Employers Contributions to the National Insurance Board (the Bahamian equivalent to social security) are the only taxes that must be paid on behalf of employees. Employees currently contribute the equivalent of 3.9%, and employers contribute the equivalent of 5.9% of an employee’s sal - ary up to the employable wage ceiling. With effect from 1 July 2024 the contribution rate will increase. Employees will contribute the equiva - lent of 4.65% and employers will contribute the equivalent of 6.65%. The employable wage ceil - ing is BSD810 per week, from a previous ceiling of BSD740 per week. 5.2 Taxes Applicable to Businesses Business Licence Tax All persons (inclusive of companies) conducting business within The Bahamas must be granted a business licence. Although certain activities are exempt from the licence requirements under the Business Licence Act, generally, there is a mod - est business licence tax (calculated based on a percentage of the turnover for the preceding year) for companies conducting business within The Bahamas. Value Added Tax (VAT) All goods and most services supplied by a VAT- registered business in The Bahamas that are nei - ther subject to the zero rate nor exempt from VAT
are subject to VAT at the standard rate (presently 10%) or such other rate as prescribed by law for certain goods and services (eg, real estate transactions). Effective 1 April 2025 the VAT charged on certain food items was reduced to 5% and the government has signalled its inten - tion to reduce VAT to 5% on prescription and non-prescription drugs, medical and dental sup - plied and medical and therapeutic items effec - tive 1 September 2025. VAT is also charged on goods and some services that are imported from outside The Bahamas. Stamp Duty Stamp duty is payable in respect of certain trans - actions (namely transfers of personal property). A Stamp Duty may also arise on the conversion of funds from Bahamian dollars to United States dollars where such funds are to be used for remittance or transferred out of The Bahamas. Qualified Domestic Minimum Tax Top-Up The Domestic Minimum Top-Up Tax Act, 2024 came into force on 1 January 2024, applying to fiscal years of a Multinational Enterprise (“MNE Group”) that began after 31 December 2023. However, the Act does not apply to a fiscal year of an MNE Group beginning before 1 Janu - ary 2025, unless that Group is affected by an Income Inclusion Rule or an Undertaxed Profits Rule of a jurisdiction outside The Bahamas. This Act incorporates into domestic law the Global Anti-Base Erosion Model Rules estab - lished by the OECD/G20 BEPS Project. In effect, in-scope MNE Groups with Constituent Entities in The Bahamas will be liable to pay a corporate tax of 15%, referred to as a domestic minimum top-up tax, as calculated under the GloBE Model Rules.
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