Bahamas Value Added Tax

Bahamas Value Added Tax

BHTA Value Added Tax (VAT) Member Resource Page

About VAT

What a Business Needs to Know About VAT - An Overview by the Ministry of Finance – this answers very basic questions. To view go to: What A Business Needs to Know About VAT

Common VAT Terminology - There are words, terms and concepts that are specific to VAT which the business community and technical personnel must become familiar with. This compilation was developed by the Ministry of Finance VAT Implementation Team.  To view go to: Common VAT Terms

VAT for the Registered Business:  Frequently Asked Questions – Developed by the recently formed Central Revenue Agency, this provides a general overview of VAT and how it applies to registered businesses.  Note:  Businesses with an annual turnover in excess of $100,000 are required to be registered.  To view go to: MOF VAT for the Registered Business Frequently Asked Questions

VAT for the Unregistered Business:  Frequently Asked Questions – This provides a general overview of VAT and how it applies to those businesses with an annual turnover less than $100,000 which are not required to be registered. To view go to: MOF VAT for the Unregistered Business Frequently Asked Questions


VAT Act, Regulations and Related Government Communications

VAT Act and Regulations

All businesses should be familiar with the VAT Act and Regulations, in particular the relevant sections associated with filing and compliance.

VAT Act – Adopted on August 23, 2014 with enactment for January 1, 2015, the Act provides for the imposition, assessment and collection of a Value Added Tax on the supply and importation of goods and services, outlining the general intent and provisions of such.  To view, go to: VAT Act 2014

VAT Regulations – Introduced as a companion to the VAT Act, the regulations provide interpretation and details to the legislation, and indicates procedures and compliance requirements.  To view, go to:  VAT Regulations 2014

VAT Rules and Guidance Notes:

These are a series of helpful publications produced by the Ministry of Finance to assist businesses with understanding the details around how VAT will work and address common questions.

The General VAT Guidelines publication gives a good overview, while specific documents have been produced for certain key industries and areas.  BHTA has provided feedback to Government in the development of the Guidelines.  They are working documents, so may be updated to address and clarify additional points raised by the business community.

VAT Guidelines - General - Provides basic information important to all businesses. To view go to: Bahamas VAT Guide - General Final Version

VAT Guidance Notes for Holiday Accommodations – Addresses common questions and concerns important to hotels, marinas and other tourism-related businesses.  Promotion Board members should note that the sample customer receipt in this document is incorrect.  You should refer to the document listed below under BHTA VAT Tips and Helpful Documents titled VAT Treatment on Promotion Board Levies for guidance on how Promotion Board levies are treated on a customer sales receipt. To view to to: VAT Guidance Notes for Holiday Accommodations

VAT Rule for Hotel Bookings Prior to Jan 1, 2015 - Clarifies Government’s position on treatment of individual and group business booked in 2014 for delivery once VAT comes into effect.  To view go to: VAT Rule - Hotel Bookings Prior to Jan 1 2015

VAT Rule - Treatment of Mandatory Gratuities – With provisos, gratuities are not subject to VAT.  This rule outlines criteria.  To view go to:  VAT Rule - Treatment of Mandatory Gratuities

VAT Rule - Invoices and Sales Receipts – Outlines the information required to be listed on VAT invoices and sales receipts.  To view go to:  VAT Rule - Invoices and Sales Receipts

VAT Guidance Notes for Transportation of Passengers and Goods – Addresses treatment of VAT for various types of transport, including travel to, from and within The Bahamas.  To view go to:  VAT Guidance Notes for Transportation of Passengers and Goods

VAT Rule – Deferral of Import VAT – Indicates circumstances where deferral of payment of VAT on imports is possible and criteria for taking advantage of deferral.  To view go to:  VAT Rule - Deferral of Import VAT

VAT Rule – Providing Public Entertainment - The purpose of this Rule is to provide guidance on registration of public entertainment activity for VAT.  To view go to:  VAT Rule – Public Entertainment

VAT Rule - VAT Free Shopping – For certain purchases for export, visitors can get a point of sale VAT refund from an authorized retailer or can apply for a refund at redemption points planned for key air and sea ports.  This document outlines the product categories affected and describes the criteria for taking advantage of the zero-rated benefit.  To view go to:  VAT Rule - VAT Free Shopping

VAT Guidance Notes for Charities, Clubs, Non-Profit Associations – Establishes criteria for how VAT is treated for various types of non-profit organizations.  To view go to:  VAT Guidance Notes Charities Clubs Associations

VAT Guidance Notes Hawksbill Creek Agreement - This guide is intended to assist businesses operating within the Freeport, Grand Bahama area with understanding how VAT applies to them.  To view go to:  VAT Guidance Notes Hawksbill Creek Agreement

Revised Tariff Schedule

Revised Tariff Schedule – This lists all product categories where customs duties were reduced effective January 1, 2015.  To view go to:  Revised Tariff Schedules from Aug 28 Transitional Notes

Filing a VAT Return

Guide to Completing VAT Return Filing

This guide is intended to provide step-by-step instructions for completing the VAT Return Form for both the Standard Method and the Flat-Rate Scheme. The guide should be used in conjunction with the Bahamas VAT Guide and different industry guides. Refer to the relevant guides for further information when completing the VAT return form.  To view go to:  Guide to Completing VAT Return Filing - Dec 2014

VAT Return Form

The form most businesses will use the Standard Form when filing their VAT return.   Should be used in conjunction with the Guide to Completing VAT Return Filing.  Note:  for small businesses using the Flat Rate scheme, a separate filing form can be found at www.bahamas.gov.bs/vat.   To view and download the VAT Return Form – Standard go to:  VAT Return Form – Standard

 

BHTA VAT Tips and Helpful Documents

VAT Tips:  Sample Customer Sales Receipts for VAT

This document provides examples of several different types of approaches to customer sales receipts, showing the required information and how a business may choose to delineate charges.   To view and download go to:  VAT Tips - Sample Invoices for VAT

VAT Tips:  Costing Imports

Concurrent with the implementation of VAT, the duty rates have been reduced on nearly 150 classifications of imported items.  The base for the calculation of duty on imports has been changed from CIF values to FOB values.  This provides examples of how the new rates and rules affect your import costs.  To view and download go to:  VAT Tips - Costing Imports


Ministry of Finance Statement on Key Outstanding Issues for Tourism Industry

Describes Government’s position on key remaining issues of concern to the tourism industry.  These include:  treatment of prebooked, prepaid business; treatment of Promotion Board levies; the Grand Bahama room tax; VAT inclusive pricing for restaurant menus; treatment of domestic leg of international travel; VAT on self-supply and complimentary rooms and services; treatment of casinos.  To view and download to to:  VAT Communication to BHTA 3rd December 2014


Official Government Notice to Tourism Industry Providers Regarding VAT

This provides industry with an official statement from Government announcing the enactment of a Value Added Tax and its general application.  Businesses have used it to communication with suppliers and international travel partners.  To view and download go to:  Notice to Tourism Industry Partners from Govt Re VAT

VAT Treatment on Promotion Board Levies

This advisory note from BHTA, developed in conjunction with the Ministry of Finance, outlines how the room levy should be treated by hotels on customer receipts and for the purpose of having appropriate back up information to offset the levy charge.  A sample invoices is provided.  To view and download go to:  VAT Treatment on Promotion Board Levies


VAT-Related Research and Studies

Value Added Tax:  Tourism Considerations in Tax Reform -  A report prepared late in 2012 for BHTA by KPMG’s tax expert Wayne Lovell who has worked on VAT-related issues with several Caribbean countries.  This provides a good overview in slide format of how VAT works and a comparison of how VAT is assessed in other tourism-dominant economies. To view, go to: Bahamas VAT & Hotel Sector 2012 Presentation by Wayne Lovell - KPMG

Potential Economic Impacts Related to Proposed Tax Changes on Tourism Sector, May 15, 2014 -  This draft summary report prepared by Ernst & Young on behalf of the tourism industry analyzes the potential economic impact on tourism and the economy with VAT as initially proposed by the Government.  The research looks at the impact of putting in alternative VAT rates along with other fiscal measures.   The Government’s initially proposed VAT rate of 10% on hotel room revenue and 15% on other tourism sales forms the basis of the analysis.  The analysis is instructive regarding potential impact of tax increases on tourism’s price competitiveness.  Final impact analysis depends upon the final rate and how a number of issues affecting VAT are treated. To view, go to: Ernst & Young Executive Summary Impact Analysis Of The Proposed Vat And Policy Alternatives, May 15, 2014

An Assessment of the Macroeconomic Implications of Alternative Strategies for Deficit Reduction in the Commonwealth of The Bahamas – This report was prepared by Oxford Economics on behalf of the Bahamas Chamber of Commerce and Employers Confederation’s Coalition for Responsible Taxation.   Supported by BHTA, the findings authenticate the argument for a lower VAT rate and were presented to the Government in May, 2014.  To view, go to: Oxford Economics Report - May 2014

The Impact of VAT Compliance on Business – Undertaken by the global consulting group PriceWaterhouseCoopers, this study looks at the differences in the time required for VAT compliance in various countries, and demonstrates how the way in which taxes are implemented using different administrative practices can have a significant impact on the compliance cost for business.  To view, go to: The Impact of VAT Compliance on Business

KPMG 2012 Benchmark Survey on VAT -  KPMG’s annual survey monitors the evolution of VAT/GST tax implementation benchmarks for businesses globally. The information offers insight to businesses on best practices benchmarks to measure the “value-add”. To view, go to: The 2012 Benchmark Survey on VAT/GST

Tourism Competitiveness Issues Presentation – A compilation prepared by BHTA in April, 2014 of key data underscoring the price competitiveness challenges facing the tourism industry in The Bahamas and their impact.  To view, go to: Data Underscoring Competitive Challenges Facing Bahamas Tourism Industry April, 2014

BHTA VAT Presentation to Members at 2014 Annual General Meeting – This provides an overview of the two-year effort by BHTA to review VAT proposals by Government, assess impact, and advance recommendations which would mitigate its impact.  Details are outlined on the outcomes with Government of negotiations on key points. To view, go to:  VAT Presentation 2014 AGM


Other Resources

Businesses can also access the Ministry of Finances VAT website by going to: VAT Homepage

 

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