02 Nov 2009Blog

Barbados government to change two tax acts

by m

I found an interesting article in The Daily Nation that stated the Barbadian government is seeking amendments to two legislations: Property Transfer Tax and Stamp Duty.  It is thought that by amending the current property transfer tax and stamp duty it will or should make Barbados more attractive to foreign investors.

Ultimately, these amendments would exempt the payment of tax and duty on any transfer of shares to a person who is resident outside of Barbados, whether or not the transferor is resident here, where the assets of the company concerned as well as its income is derived solely from outside sources.

According to the Prime Minister,  in 2007 the previous administration had introduced certain changes to the Income Tax  Act which were designed to create opportunities for Barbados to be used as an attractive jurisdiction for the creation of holding companies, and indicated that these proposed amendments were following in that trend.

He said that with regards to exchange controls, it was imperative that ‘holding companies’ benefit from similar exemptions to those enjoyed by international business companies and regular Barbados companies which conduct ‘international business’ only.

The Income Tax Act states that any individual who is resident but not domiciled in Barbados, is taxable on income derived from local sources and on foreign income that is remitted or deemed remitted to Barbados.

Thompson said Government would amend that act to reduce the effective rate of income tax that such individuals would be required to pay on their foreign income to claim foreign currency earnings credit in respect of income derived outside of Barbados.

He also proposed that dividends derived by Barbadian resident companies, including companies licensed to operate in the international business sector, should be exempt from tax here on dividends derived from a ‘substantial shareholding’ in an overseas company.

Source: The Daily Nation, Tuesday, October 7, 2009, Page 7: Govt to change two tax acts