THE BAHAMAS Trends and Developments Contributed by: Darron S Pickstock and Tammie T Knowles, Glinton Sweeting O’Brien
General requirements A. Long-term leases (five years or more) – for all Bahamian and foreign persons, long-term leases of five years or more attract a one-time VAT pay - ment on the annual rental rate of the lease, and if periodic rental payments are made, then VAT registration is required for the landlord and VAT payments are also assessed on such periodic rental payments. B. Business licence required to register for VAT – no VAT registration certificate shall be issued under the VAT Act unless the comptroller is satis - fied that the applicant has complied with require - ments of the Business Licence Act. C. VAT on cleaning fees and vehicle rentals – VAT will apply to additional services such as cleaning fees and vehicle rentals. Regarding vehicle rent - als it should be noted that all vehicles included with vacation home rentals should not permit another driver to use the vehicle for a fee. If a vehicle is offered as an amenity or service with the rental home, that vehicle should have a self- drive public service licence. D. Marketplace liability for VAT on vacation home rentals – subject to the rules that dis - tinguish Bahamian and foreign ownership, if a homeowner supplies the vacation home rental and other services through a marketplace (eg, VRBO or Airbnb), the marketplace shall be lia - ble to pay and account for VAT for the rental of the home and other services provided as a part of the rental of the home. VAT shall be payable on the total rental of the home and additional services provided along with any commission earned by the marketplace on the rental of the home. However, it is important to note that if the marketplace fails to make the required VAT payment, the homeowner remains accountable for any resulting VAT obligation.
includes a permanent resident with the right to work in The Bahamas. Residential use VAT & business licence Bahamian individuals or wholly Bahamian owned holding companies supplying short- term vacation home rentals of 45 days or less within The Bahamas do not require a business licence and are not required to register for VAT if their turnover through rental activity does not exceed the VAT threshold of BSD100,000 within a fiscal period. However, if the turnover exceeds BSD100,000, VAT registration is required. Also, long-term residential rentals of more than 45 days and less than five years are exempt from VAT. Bahamian non-holding companies (businesses) supplying short-term vacation home rentals of 45 days or less within The Bahamas are required to obtain a business licence regardless of the turnover but are not required to register for VAT unless their turnover meets or exceeds the VAT threshold of BSD100,000 within a fiscal period. If an individual is Bahamian and is in the busi - ness of renting properties (eg, an apartment complex), then the rental of a dwelling for 45 days or less is subject to VAT regardless of the VAT threshold. Such an individual will need to register for VAT and obtain a business licence. Commercial use For the supply of rental property for a commer - cial purpose, Bahamian individuals and Baha - mian companies are required to register for VAT if they meet or anticipate that they will meet the registration threshold of BSD100,000 within a fiscal period and to obtain a business licence.
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