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 Bill, Regulations and Related Government Communications

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

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

VAT Guidelines – General
VAT Guidelines – Accommodations
VAT Guidelines – Transportation Services
VAT Guidelines – Duty Free Shopping
VAT Guidelines – Professional Services
VAT Guidelines – Retail-Wholesale Trades
VAT Guidelines – Charitable and Nonprofit Organizations

Draft VAT Legislation – Introduced to Parliament on July 23, 2014, the draft Bill 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 Draft Legislation 7-23-13

Draft VAT Regulations – Introduced as a companion to the draft VAT Legislation to Parliament on July 23, 2014, the draft regulations provide interpretation and details to the legislation, and indicates procedures and compliance requirements.  To view, go to:  VAT Draft Regulations 7-23-14

Changes to VAT and Proposed Revisions to Tariff Schedule – This document which was developed by the Ministry of Finance describes key changes to the VAT Bill introduced on July 23, 2014 from the version introduced late in 2013.  It also lists proposed revised tariff rates.  To view, go to:  Changes to Vat Legislation

BHTA Member VAT Update at Aug 7, 2014 Meeting by Financial Secretary John Rolle – Provides an overview of VAT and how it is intended to work, a summary of key aspects of the draft VAT Bill and Regulations, and outlines key issues of concern by BHTA which are under discussion with the Government.  To view, go to:  A Guide to the Legislative Changes & Tourism Sector Issues August 2014

Transitional Virtual Bonded Warehouse Details – This is the official document released by the Ministry of Finance and Bahamas Customs Department on September 23, 2014. It provides a general overview of the transitional warehouse arrangement in place for large importers wishing to opt into it for import of those items where the Customs duties have been reduced.  The document explains the criteria for participation, includes the forms to be used, and provides a listing of items where the tariff will be reduced effective January 1, 2015. There may be some minor adjustments to the tariff items. The initial date for filing intent to participate in the virtual warehouse was the end of this month. BHTA and others requested it be extended and Government has now changed the deadline to October 15, 2014.  To view, go to: Transitional Virtual Bonded Warehouse – Bahamas Customs, September 23, 2014

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

VAT Readiness Tips from BHTA Allied Member KPMG Provided at August 2014 Meeting – A summary of points shared with members at August 7, 2014 BHTA meeting regarding key readiness steps which  businesses should be considering in preparation for VAT’s implementation. To view, go to: BHTA Membership Meeting – VAT Readiness – Simon Townend, KPMG – Key Talking Points

Review of July, 2014 Draft VAT Bill and Regulations by KPMG – This is a summary developed by KPMG of what they consider to be key facts and considerations in the Bill and Regulations. To view, go to: KPMG – Tax Advisory – Review of the Value Added Tax Bill and Regulations 2014 of The Bahamas

Key VAT-Related Communications to Government

June 6, 2014 BHTA Letter to Minister Halkitis Regarding VAT Readiness – With Government’s public announcement that VAT would be implemented on January 1, 2014, BHTA calls for a public-private sector readiness plan.  Key readiness areas and an offer to partner in developing and implementing the plan are described in the letter. To view, go to: Letter to Minister Halkitis

May 29, 2014 Position of the Bahamas Chamber of Commerce and Employers Confederation’s Coalition for Responsible Taxation Regarding Tax Reform – Based upon months of research and consultation with 17 private sector organizations nationally, the Chamber outlines the Coalition’s position on VAT and fiscal reform.  To view, go to: Bahamas Chamber Coalition May 29 2014 Position Paper on VAT

May 23, 2014 BHTA Letter to Prime Minister from Tourism Industry Partners Group – This outlines concerns and recommendations, providing supporting information for a lower VAT rate than the 15% originally proposed based upon Industry research conducted by BHTA, Ernst & Young and Oxford Economics. To view, go to: Letter to Prime Minister May 23, 2014

February 3, 2014 BHTA Letter to Prime Minister from Tourism Industry Partners Group – Concerns are outlined and a recommended collaborative public-private sector approach is presented.  BHTA indicates its support for research to determine options to the proposed VAT levels and its intention to also work closely with the Chamber of Commerce’s Coalition for Responsible Taxation. To view, go to: Letter to Prime Minister February 3, 2014

BHTA Review and Submission to Government Regarding November, 2013 Draft VAT Legislation and Regulations –  This matrix details the initial concerns and recommendations presented to Government following a review of the draft VAT legislation and regulations by BHTA’s Tourism Tax Reform Task Force representing various tourism-related sectors and business sizes. To view, go to: BHTA Review and Submittal to Governent on Initial Draft VAT Bill and Regulations

BHTA VAT Presentation to Members, August 7, 2014 – Presented by BHTA consultant Frank Comito, this provides an overview of key industry concerns and recommendations identified during a review of the draft VAT Bill and Regulations.  The presentation was the basis for discussions and recommendations to the Prime Minister, Minister of State for the Ministry of Finance Honourable Michael Halkitis and other Government representatives. To view, go to: Review of Draft VAT Bill and Regulations Key Findings, Concerns and Recommendations August 11, 2014

 

Other Resources

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