Back To Top

Your Lowtax Account


Bahamas Clarifies Scope Of Flat VAT Rate Scheme

by Jason Gorringe, Lowtax.net, London
20 March, 2015

The Bahamas Ministry of Finance has confirmed that Grand Bahama Port Authority (GBPA) licensees may not benefit from the flat rate value-added tax scheme.

Responding to press reports that "[gave] the impression that there had been a change in policy on the use of the scheme," Financial Secretary and Acting VAT Comptroller John Rolle said: "The 4.5 percent flat rate was never conceived for Port Authority licensees. We stated this in our Guidance Notes and in the VAT Rules which were published."

The flat rate scheme allows certain taxable persons to account for VAT at a flat rate on all of their supplies, with the rate calculated on the basis of historical data on the cost of their inputs. Businesses who avail themselves of the scheme are not entitled to input tax credits.

The Government said: "Businesses in the Port Area that purchase bonded items from other licensees or that import items on which they enjoy Hawksbill Creek exemptions would not pay VAT on such inputs. Therefore they would not have the same average input VAT structure as businesses outside of the Port Area. As such, the tax assumptions that justify the flat rate formula cannot be applied inside the Port Area."

"As it stands, the Ministry of Finance does not have historical data yet to tailor a flat rate for Grand Bahama Port Licensees. It requires information disclosures on the average breakdown of sales and purchases of supplies that are bonded and supplies that are not bonded."


See all of today's news


 

News Archive

Event Listings

Listings for the leading worldwide conferences and events in accounting, investment, banking and finance, transfer pricing, corporate taxation and more...
See Event Listings »