THE BAHAMAS Law and Practice Contributed by: Alistair Chisnall and Erica Paine, Graham Thompson
for a purchase transaction to be structured as a “net” sale rather than a “gross” sale, as this can help to mitigate the amount of tax payable in respect of the transaction. 8.3 Municipal Taxes Municipal taxes are not payable in The Baha - mas, but operating businesses are required to hold a business licence and pay annual business licence fees. In July 2023, under the Business License Act 2023 foreign persons who wish to rent their properties are required to register for a Bahamian business licence. Business licence fees may be paid in instalments which must be paid by the following dates: • 31 March; • 30 June; • 30 September; and • 31 December. Failing notification to the Financial Secretary, the amount owed must be paid in full by 31 March. Where VAT is payable, a VAT return must be filed within 21 days after the end of each tax period. Fines may be imposed for late filing which may be up to 2% of the tax owed and in instances of late or non-payment, 10% of the tax owed. In addition, all real estate in The Bahamas is subject to real property tax, unless specifically
exempted, and business premises are charged tax at a commercial rate. Pursuant to the Real Property Tax (Amendment) Act 2023, directors of landholding companies are jointly and severally liable to pay the real property tax owed by the company. A director who fails to pay outstanding real property tax within a specified time may be liable for a fine of up to BSD30,000. Furthermore, all units within a condo-hotel or a hotel rental pool are subject to the payment of a condo-hotel tax, unless the net VAT paid in respect of the unit exceeds the condo-hotel tax applicable to that unit. The condo-hotel tax is calculated at 75% of the rate of tax applicable to residential property (currently 0.625%) on the assessed value of each unit within the condo- hotel or hotel rental pool, up to a maximum amount of BSD150,000 per unit. 8.4 Income Tax Withholding for Foreign Investors The Bahamas does not tax income or capital gains. However, rental income from real estate is subject to VAT, as outlined in 6.7 Payment of VAT . 8.5 Tax Benefits There are no local tax benefits from owning real estate in The Bahamas.
981 CHAMBERS.COM
Powered by FlippingBook