VAT Calculator Bahamas (2024) | Everything You Need to Know About 12% Consumption Tax
VAT Calculator Bahamas
The Bahamas use VAT (Value Added Tax) (VAT) also called Consumption Tax, on all products and services. It doesn’t matter if you’re a visitor or a resident or a business proprietor, being aware about the Bahamas VAT system is essential for ensuring accurate pricing as well as budgeting.
Overview: VAT in the Bahamas
- Standard VAT Rate: 12%
- Zero-Rated VAT: 0% (on select items)
- VAT Introduced: January 1, 2015
Locally manufactured as well as imported goods as well as services will be taxed using rates of VAT. Businesses are required to sign up for VAT when they exceed the threshold for revenue set by the Bahamas Department of Inland Revenue.
How to Calculate VAT in the Bahamas
Add VAT (12%)
Formula:
VAT = (Original Price x 12%) / 100 Total Price = Original Price + VAT Example:
- Original Price = $1,000
- VAT = $1,000 x 0.12 = $120
- Total Price = $1,000 + $120 = $1,120
Remove VAT (12%)
Formula:
VAT = Price - (Price x 100 / (100 + VAT%)) Net Price = Price - VAT Example:
- VAT-Inclusive Price = $1,120
- VAT = $1,120 – ($1,120 x 100 / 112) $120
- Net Price = $1,000
History of VAT in the Bahamas
| Year | Rate | Notes |
|---|---|---|
| 2015 | 7.5% | VAT introduced, replacing Sales Tax |
| 2018 | 12% | Rates were raised in response to the crisis in national debt |
In 2018 the VAT increases in the range of 7.5 percent as well as 12% was enacted to ease the $2 billion debt burden. The increase was designed to boost income for the state, as well as tourism and business costs. However, they were adversely affected.
Zero Rated & VAT Exempt Goods and Services
Zero Rated (0% VAT)
- Exports (goods that are shipped out of the country)
- Removed physically items out of Bahamas
- transfer of business between VAT registered businesses
VAT-Exempt Items
- Education: School tuition
- Healthcare: Medicines
- Housing: Rent for residential dwellings
- applications: Electricity & water within a certain threshold
- Water: under $50/month
- Power: under $100/month
- insurance: Life insurance & residential property insurance
- Financial Services: Domestic banking & certain professional services
- Charity-related Activities
- Gambling & Lotteries
Is the Bahamas a Tax-Free Country?
Yes to a certain degree. The Bahamas is the home of:
- No tax on income
- No capital gains tax
- There is no inheritance or estate taxes
- Taxation is only indirectly (like VAT Customs duties, VAT as well as National Insurance)
National Insurance Contributions (NIB):
- Employees: 4.9%
- Employers: 5.9%
FAQs – Bahamas VAT
Q: Do you know the VAT rate on The Bahamas?
A: The VAT rate for the Bahamas is 12 percent which applies to the majority of goods or services.
Q: What happens if you need to claim VAT refunds for the Bahamas tax? A: The tax isn’t refundable. Not available in the Bahamas for consumers or tourists.
Q: What is the tax rate in The Bahamas free of tax? A: The Bahamas are tax-free on income, however tax on indirect sources like TVA customs duty, customs duty and NIB are charged.
Q: Do you believe that life is costs are expensive in the Bahamas Are you sure?A: The cost of housing is reasonable but the expenses of living, such as food, utilities and imports are higher than the typical due to VAT and customs.
