Barbados Offshore Tax Rates

Barbados offshore tax rates are some of the most attractive available to international businesses worldwide. Registering an international business on the island provides an effective way for businesses to reduce their international tax burden and maximize returns on their global business.

Barbados Tax Rates for Offshore Companies

Offshore trading company types include International Business Companies (IBCs) and Societies with Restricted Liability (SRLs). These companies facilitate a wide variety of international business functions including international trade, commerce and manufacturing making them the most popular offshore company type registered in Barbados.

These two company types are taxed at low rates of 2.5% down to 0.5% of taxable income. The following tax table highlights the relevant tax rates for these company types:

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)

Capital gains are tax exempt. In addition, there are no withholding taxes on dividends, interest, royalties or management fees paid to non-residents. These companies are also exempt from paying taxes and import duties on materials, machinery, plant and equipment used by the business.

Businesses also receive a foreign tax credit on taxes paid overseas that can be used to reduce taxes payable to a minimum amount of 0.5% of taxable income.

Barbados Tax Rates for Offshore Insurance

Offshore insurance companies include captive insurance companies and international reinsurance companies which can be registered as Exempt Insurance Companies (EICs) and Qualifying Insurance Companies (QICs).

EICs are completely exempt from taxes for the first 15 years of operation. After that period, they are taxed at a rate of 2% on the first US $125,000 of taxable income with any amounts earned above that amount remaining exempt.

QICs are taxed on all income at the corporate tax rate but receive a foreign income tax rebate that effectively reduces the overall tax rate to around 1.75% of all income.

There are no withholding taxes on dividends, interest or management fees. Capital gains are also tax exempt.

Barbados Tax Rates for Offshore Banks

Offshore banks benefit from attractive tax rates ranging from 2.5% of taxable income down to just 0.5%. The tax table below illustrates the applicable tax rates charged:

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)

Offshore banks also receive a foreign tax credit for taxes paid outside of the island. This credit can be used to reduce the total tax payable to a minimum of 0.5%.

Capital gains are completely exempt from taxation. There are no withholding taxes on dividends, interest, royalties and fees.

Barbados Tax Rates for Offshore Trusts

Offshore trusts are completely tax exempt for all taxes and duties, including income tax, capital gains tax and inheritance tax. These tax exemptions for Barbados offshore trusts mean that they offer the most attractive benefits worldwide.

Barbados: Low Offshore Taxes

Registering a Barbados offshore company allows shareholders and business owners to benefit from very attractive tax rates and exemptions on their international business transactions. These low rates can assist international companies in effectively reducing their international tax burden in order to increase shareholder returns.

Furthermore, Barbados has a reputation as a leader in the offshore sector, supported by strong legislation and many offshore tax treaties with over thirty countries. This well established framework means that investors can operate with confidence and guarantees on how profits will be treated as money is earned around the globe.

A Barbados offshore company often has a competitive advantage over other international businesses since it combines low taxation with a recognized legal framework and strong treaty network.