Barbados: Double Tax Treaties

Introduction

This page was last updated on 10 Apr 2019.

Barbados has a number of double tax treaties, but the US and Canadian treaties in particular are extremely favourable for certain types of investor. The full list of countries Barbados has double tax treaties with is given below, together with their year of entry into force.

Notes:

1. The treaty with CARICOM represents double tax agreements with all 10 fellow member states: Antigua, Belize, Dominica, Grenada, Guyana, Jamaica, St Kitts and Nevis, St Lucia, St Vincent & the Grenadines and Trinidad & Tobago.
2. The treaty with Switzerland was inherited from the UK’s treaty when Barbados gained its independence in 1966. Barbados also inherited treaties with Sweden, Norway and Finland; these have since been replaced with more modern ones that have low rates of withholding, tax-sparing provisions and limitations on treaty shopping.

As of April 2019, Barbados has 40 tax treaties. Treaties with Ghana, Rwanda and Slovakia have been signed but are not yet in force.

The 1980 Canadian treaty was extensively updated by a protocol signed in November 2011. The protocol contains provision for the exchange of information and came into force in December 2013.

The Barbados-US tax treaty dates from 1984, and was accompanied by an exchange of tax information agreement (see Other International Agreements below). The treaty is attractive to third country investors in US property and US manufacturers. Many US investors are exempted from US accumulated earnings tax on Barbadian profits - this is a rare feature in US tax treaties. A protocol to the US treaty signed in 1991 lowered withholding rates and introduced new 'limitations on benefits' rules.

The US treaty was further amended in 2004 in what was said to be an attempt to counter tax evasion. The second protocol to the 1984 treaty was co-signed by then US Treasury Secretary John Snow and Barbadian Industry and International Business Minister, Dale Marshall. It went into force in December 2004.

Technical discussions on the opening of negotiations have also been held with the Republic of Ireland, Brazil and South Africa, while Barbados has also explored the possibility of new agreements with Slovakia.

In December 2009, the governments of the Netherlands and Barbados signed a protocol which amended the convention on the avoidance of double taxation that they share, in order to quash tax treaty abuse. The protocol in question amends the convention to prevent Dutch taxpayers from using the treaty to transfer dividends free of tax to a third country through the Caribbean territory. The new text also stipulates a tax rate of no more than 15% on dividends, and contains more stringent parameters on eligibility.

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