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Bahamas VAT-Free Shopping Scheme Launches

by Mike Godfrey, Lowtax.net, Washington
17 July, 2015

The Bahamas Value Added Tax (VAT) Department has announced that the VAT Free Shopping Scheme will take effect on August 15, 2015.

The VAT and Customs Departments are partnering with Global Blue, an international operator of tax refund systems, to introduce an automated rebate tracking system for the Bahamas.

Under the changes, set out in new VAT rules released by the Government, merchants will continue to sell a wide range of products to tourists, net of VAT, and record this information in the standard format, which will be monitored electronically by the Customs Department.

With the introduction of the standardized electronic platform, the VAT Department is now opening up participation in the tax-free or "VAT off" scheme to all qualifying businesses that sell qualifying goods. The scheme applies to all products with a VAT-inclusive price of more than USD25, excluding food, drinks, tobacco, and medicines.

Since January, under a pilot program, only stores that made at least half of their sales to tourists were authorized to participate. The draft rules to govern the modified scheme can be located on the VAT Department's website.

"There are aspects of the program that we will continue to review over the next six months, however it is important to move at this time to allow smaller and medium-sized stores to join the scheme," said Financial Secretary and Acting VAT Comptroller John Rolle.


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