August 20, 2021

Tax Incentives

Barbados is not a pure tax haven, but it is a very low-tax environment for offshore corporations incorporated in Barbados. Taxes on profits of offshore companies are generally in the range of 0% to 5.5%, and the tax rate decreases as the profits earned increase. Offshore companies can import the necessary machinery or business equipment without paying any import duty.

There are no withholding taxes, capital gains or inheritance taxes. Unlike most Caribbean tax havens, Barbados does have double taxation treaties with a number of other countries, including Canada and the U.S. has zero capital gains and inheritance tax.

Corporate - Taxes on corporate income

Last reviewed - 01 February 2022

Companies resident in Barbados are taxed on income earned from all sources, whether generated within or outside of Barbados, less expenses incurred for the purpose of producing assessable income in a fiscal period not to exceed 53 weeks. Non-resident companies are generally only taxed on income derived from sources and operations conducted within Barbados.

Corporate income tax (CIT) rates

The following rates apply to taxes on corporate income:
Taxable income bracket / Entity CIT rate (%)
Taxable income up to 1 million Barbados dollars (BBD) 5.5
Taxable income exceeding BBD 1 million but not exceeding BBD 20 million 3.0
Taxable income exceeding BBD 20 million but not exceeding BBD 30 million 2.5
Taxable income exceeding BBD 30 million 1.0
International business companies, international banks, and international societies with restricted liability that have elected and been approved to be grandfathered (1) 1.0 to 2.5
Class 1 insurance companies 0
Class 2 and 3 insurance companies 2
Exempt insurance companies 0
Qualifying insurance companies (2) 0.35

Notes

  1. These regimes were closed to new entrants from 31 December 2018, and the grandfathering period ended on 30 June 2021.
  2. This rate applies to insurance companies that were classified as qualifying insurance companies licensed under the Insurance Act, Cap. 310 and carrying on life insurance business before 17 October 2017.