Belize: Domestic Corporate Taxation
The Income Tax (Amendment) Act, 1998 introduced a new method of corporate taxation, under which a turnover tax is levied on most types of company income at various rates, and the tax paid is credited against a conventional corporate income tax, which was previously itself the main tax.
A 15% Value Added Tax, or VAT, which provided the Government with some 30% of its tax revenue, was abolished in 1999 in favour of a 'sales' tax,' which in turn was replaced with a 10% Goods and Services Tax (GST) in July 2006, subsequently increased to 12.5% in April 2010.
See Offshore Legal and Tax Regime for details of the taxation of offshore companies, and companies in the Free Zones.
In addition to the taxes described below, employers pay social security contributions in respect of employees (see Personal Taxation).
In December 2008, the House of Representatives in Belize approved a number of amendments to the Income and Business Tax Amendment Bill, which affects the way in which the country's real estate, banking, and telecommunications sectors are taxed. Government sources at the time said the amended bill would:
- Retain the rate of business tax for all non-commission earning categories of the real estate industry at 15%;
- Fix the 'real' business tax rate for commission earning real estate businesses, including real estate developers, condominium owners, long time lease timeshare operators and share transfer sales at 1.75% (the government had initially proposed to set this tax at 2.5%);
- Increase the tax for public investment companies in the banking sector to 12% from 8%; and
- Raise the rate of business tax on companies in the telecommunications sector to 24.5% from 19%.