VAT tax in Bahamas Starting Next Year

[onestepcsy37]

the bahamian government just approved a vat tax of 7.5%, to begin in january 2015. as is customary in the bahamas, nobody knows how it's going to be collected or on what.

[Jason Flare]

What do they want the money for?

[roverhi]

Duh! buy votes, increase their salaries, and more opportunity for graft. Why does any government want to increase taxes??

[tomfl]

Originally Posted by onestepcsy37

the bahamian government just approved a vat tax of 7.5%, to begin in january 2015. as is customary in the bahamas, nobody knows how it's going to be collected or on what.

Just my two cents but I am not sure there is something called the Bahamian Government. In places like Nassau or Freeport the government functions much differently than many of the smaller settlements where almost everything is done on a cash basis. Hard to see how taxes are ever collected in those places.

[Stu Jackson]

Originally Posted by Jason Flare

What do they want the money for?

1. Beer?

2. Rum?

3. Clean(er) water

4. Sewage treatment plants

5. Commission to end corruption

6. Berlin Wall against Floridians

7. Reduction of local taxes

8. Deeper anchorages

9. Defense against Putin

10. Drones (doesn't everyone?)

Wow, what a great WHY question.

Like: Why ask?

[Waterway Guide]

I spent hours writing an article on it last week. The VAT was supposed to replace the high import duties when it was proposed at 15% – now, at 7.5%, it's not. And you will pay VAT on top of the import duties (including on the amount of the import duties). But only if you are paying for goods or services from a company that is...wait, I'll just post my article:

The new Value Added Tax bill passed last week with a vote of 22-8 in the Bahamian Parliament.
A 7.5% tax will be collected at point of purchase for almost all goods and services starting January 1, 2015, unless changes are made before then. The tax was originally supposed to be implemented in July 2014 at a 15% rate with some exceptions, including 10% for tourism activities, but that plan changed in May.
So, will you be paying a 7.5% tax on everything you buy in the Bahamas? No. Medical and educational services are exempt, and one source includes "basic breadbasket items" in the exemption list (I didn't find that it at other sources or in the most recent copy of the regulations). To further confuse the issue, only businesses with sales of $100K or more are allowed to register to collect the VAT – businesses with sales below $100K will collect 0% (unless they are unscrupulous).
Confused? If you cruise the Bahamas this winter, you won't be the only one – collecting tax is brand new for Bahamian businesses. The "shelf" or "menu" price should be the total price you pay, according to current provisions (it includes the VAT if the business collects it). Businesses that collect VAT should include the VAT amount and its tax ID on your receipt, and should have a VAT registration certificate prominently displayed along with its business license. (You can also check the VAT register that will be on the Ministry of Finance’s Website and all other Government websites.)
Will something change before we cross the Gulf Stream? Probably...this has been a "moving target" for years now.
Will cruising the Bahamas become more expensive? The original VAT proposal was designed to eliminate the high import duties (just about everything is imported); however, in the new regulations with the lower 7.5% rate, most imports will still have import duties as well. Yes, expect to pay a bit more for everything to help get this island nation out of its deep fiscal hole (if they manage to efficiently collect it and use it to pay down its debt, of course).
Will the Bahamas still be a great place to cruise? Absolutely! Don't forget: You'll still be able to bring in all the "ship's stores" you can cram into your boat without paying any tax or duty on it – unless of course, they change that law...stay tuned!

[AnchorageGuy]

As Mike says, the entire VAT process and guidelines are still in a state of flux. The VAT is scheduled to go into affect in January 2015. But the rules are still be compiled and changed. This is the latest as of today if it might help...

The Ministry of Finance released today a series of Value Added Tax Guidance Notes. These documents provide general guidance and advice to the public and the business community as part of the Government’s public education campaign in respect of the VAT that will be implemented in The Bahamas on January 1, 2015.
The Guidance Notes serve to complement the General VAT Guide that was released on July 30th and provide more detailed information that is specific to particular industry sectors or in respect of specific situations and circumstances. These will be expanded and revised as necessary, based on feedback.
The eleven Guidance Notes being issued today are for:
· Finance and Insurance services
· Professional Services
· Transportation of Passengers and Goods
· Retail and Wholesale Trade
· Construction Services
· Land and Property
· Medical and Healthcare Services
· Education Services
· Charities, Clubs and Associations
· VAT and the Hawksbill Creek Agreement
· The Treatment of Motor Vehicles
The additional Guidance notes that will be issued in the immediate days ahead are the following:
· Hotel and Holiday Accommodation
· Duty free shopping
· Cash Accounting and Flat Rate Scheme
· Transitional Arrangements
These documents are intended to be general in nature and provide an overview in the areas that they cover. Persons wishing to obtain more detailed and legal information in respect of their particular situation and circumstances should also always consult the Value Added Tax Bill 2014, the draft Value Added Tax Regulations 2014.
These can all be found on the website (AND ATTACHED BELOW) of the Government of The Bahamas. Those requiring further clarification may also contact the VAT Taxpayer Services help desk at (242) 225-7280 or the VAT Department by email at vat@bahamas.gov.bs or in writing at:
Value Added Tax Department
Ministry of Finance
Gladstone Freight Terminal
Gladstone Road
P.O. Box N-4866
Nassau, N.P. The Bahamas


If you really want to hurt your brain, you can find more details on what things may be most affected that are of interest to cruisers here, http://www.thebahamasweekly.com/uplo..._Sector_v2.pdf . And of course all of this can change tomorrow or next week. It is after all, the Bahamas. Chuck

[goboatingnow]

I read the various flyers. Doesn't seem complex , standard European style rules , I'm vat registered I do with the paperwork myself.

It won't effect non vat registered people , other then perhaps paying a little more , personally I prefer such consumption taxes over income taxes

It's just a tax that's all.

Dave