Barbados Tax Treaty
Barbados International Tax Compliance Rules
Barbados – US Tax Treaty Quick Summary. Barbados is a Caribbean island in the Lesser Antilles of the West Indies. A parliamentary democracy maintains ties to the British monarchy.
Barbados implemented a new tax regime effective 2019. Corporate tax rates apply to all entities. For individuals, resident/domiciliaries are subject to tax on worldwide income, whereas individuals who are residents but not domiciled in Barbados are taxed on Barbados source income and other income to the extent a benefit is obtained in Barbados.
Barbados is a signatory to the Inclusive Framework (IF) on Base Erosion and Profit Shifting (BEPS). In an effort to implement provisions consistent with the framework, Barbados abolished multiple preferential tax regimes, resulting in a wider tax base and other structural changes.
Income Tax Treaty between the United States and Barbados
Barbados Treaties.
- Convention between the United States of America and Barbados for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
- Technical Explanation of the Convention between the United States and Barbados signed on December 31, 1984
- SECOND PROTOCOL AMENDING THE CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND BARBADOS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME SIGNED ON DECEMBER 31, 1984
- Technical Explanation of the Second Protocol signed at Washington on July 14, 2004
Barbados Currency.
Barbados dollar (BBD).
Common Legal Entities.
The regular business company, partnership, limited liability company.
Tax Authorities.
Barbados Revenue Authority, National Insurance Office, Financial Services Commission, International Business Unit, Ministry of Industry, International Business Commerce & Small Business Development, and Central Bank of Barbados.
Income Tax Treaty between the United States and Barbados
Barbados Tax Treaties.
Barbados is a party to 31 tax treaties. It is a signatory to the OECD MLI.
Corporate Income Tax Rate. 1% – 5.5% (generally).
Individual Tax Rate. 12.5% – 28.5%.
Corporate Capital Gains Tax Rate. No.
Individual Capital Gains Tax Rate. No.
Residence. An entity is a resident if it is centrally managed and controlled from within Barbados. An individual is a resident if he or she is in Barbados more than 182 days in the tax year. If an individual is not domiciled in Barbados, the individual can become an “ordinarily resident” if the individual has a permanent home in Barbados and elects to reside in Barbados for at least 2 consecutive years.
Withholding Tax.
Dividends. 0% (company resident) / 15% (individual resident) / 0% / 5% / 25% (company and individual nonresidents).
Interest. 15% (company and individual residents) / 0% (company and individual nonresidents).
Royalties. 0%.
Transfer Pricing. No transfer pricing legislation but the Revenue Commissioner has the ability to impute a market rate of interest for transactions between related parties.
CFC Rules. No.
Hybrid Treatment.
No specific rules but the OECD Forum on Harmful Tax Practices found Barbados to be in compliance with the requirements of BEPS action 5.
Inheritance/estate tax. No, but certain gifts may be subject to property transfer tax.
Tax Treaty Network – International Tax Attorneys
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