Taxes

The Bahamas is well-known for its favorable tax environment, making it an attractive destination for investors, entrepreneurs, and retirees. The country imposes no personal income tax, capital gains tax, or inheritance tax.

Residents are required to contribute to the National Insurance Board (NIB) if they are employed or self-employed. This system functions similarly to social security in other countries, providing benefits such as healthcare, unemployment, and retirement assistance.

International Tax Considerations

The Bahamas has entered into a number of tax information exchange agreements with other nations. This means that individuals earning income in the Bahamas may still have tax obligations in their home country, depending on their citizenship and residency status. It’s highly recommended to consult an international tax advisor before relocating or establishing a business to ensure full compliance with foreign tax reporting requirements.

Import Duty and VAT

The Bahamian government generates the majority of its revenue through import duties and Value Added Tax (VAT).

  • Import Duty: Ranges from 0% to 225%, depending on the product, with an average rate of around 45%. Virtually all imported goods are subject to duty since the Bahamas produces limited local goods.

  • Value Added Tax (VAT): Implemented in 2015 at 7.5%, VAT was later increased to 12% and then reduced to 10% in January 2022, where it currently remains. VAT applies to most goods, services, and transactions across the country.

These taxes form the core of the Bahamas’ public revenue system and support government operations in lieu of traditional income-based taxation.