The Barbados Cabinet has lowered the offshore tax rate on all profits and gains for the highest band of taxable income.
The offshore tax rate on income and gains above US $15 million has been reduced further from 1% down to just 0.5% in 2012, with a further reduction to 0.25% in 2013. An additional reduction to a mere 0.1% is also said to be under consideration at this time and may be implemented in the future.
The tax rate reduction to the highest band of taxable income will come into place immediately, benefiting International Business Companies (IBCs), Societies with Restricted Liability (SRLs) and offshore banks from 2012 onwards.
This reduction in taxes provides significant benefits to the large offshore companies and banks operating in Barbados. The lower taxes will make these companies more competitive on a global scale during these challenging economic times when austerity measures and increasing taxes worldwide are hampering business and draining corporate coffers. The Barbados Cabinet’s bold decision will act to reinforce the Government’s ongoing commitment to the Barbados international business sector and their willingness to ensure that the sector remains an international leader through its extremely competitive tax structure.
The tax rates on the lower bands of income remain unchanged.
The Barbados offshore tax rates that apply to IBCs, SRLs and offshore banks will now be as follows:
Taxable Profits in US Dollars Tax Rate
Under $5 million 2.5%
$5 million to $10 million 2%
$10 million to $15 million 1.5%
Over $15 million 0.5% (2012), 0.25% (2013)
These reduced tax rates combined with an expansive tax treaty network, a highly skilled workforce and developed infrastructure make the island a leading jurisdiction of choice for international businesses who wish to compete on a global scale.