Barbados: Domestic Corporate Taxation
Corporation Tax Rates
The standard rate of corporation tax has been 25% since 2006.
Amendments to the Barbados Small Business Development Act in 2007 have provided registered incorporated small businesses with a number of incentives. These incentives include, among others: a reduced rate of corporation tax of 15% (instead of 25%) on the profits of the business; exemption from import duty on raw materials, plant and equipment imported for use in the business; and exemption from withholding tax on dividends and interest earned on investment in an approved small business, or in any fund approved for investment in small businesses.
In addition, there is an exemption from the payment of stamp duty, under the Stamp Duty Act, on all documents related to business where the registration of those documents is required by law; and a deduction of corporation tax of an amount equal to 20% of the actual expenditure incurred in respect of the use of technology, market research and any other activity that is, in the opinion of the Commissioner of Inland Revenue, directly related to the development of the business.
The Act was first passed in December of 1999, and recent amendment has re-defined a small business as any enterprise that satisfies two of the following criteria: is incorporated under the Companies Act of Barbados; has not more than BDS1 million as stated or paid up capital; has not more than BDS2 million in annual sales; and employs not more than 25 persons.