What Taxes Does a Business Pay in The Bahamas?

The Bahamas stands out globally because of the taxes it does not impose. There is no personal income tax, no corporate income tax, no capital gains tax, no inheritance tax, and no withholding tax on dividends or interest. A business operating in The Bahamas keeps its profits without sharing a percentage with the government based on earnings.

This tax structure has made The Bahamas attractive to international businesses, financial services firms, and entrepreneurs for decades. However, the absence of income-based taxes does not mean there are no taxes at all. The Bahamian government generates revenue through consumption-based taxes, licensing fees, and social insurance contributions instead.

For business owners, this means your tax obligations centre around what you sell, what you import, the property you occupy, and the employees you pay, rather than the profits you earn.

Value Added Tax is the most significant tax obligation for most Bahamian businesses. VAT was introduced in The Bahamas on January 1, 2015, and has become the government's primary source of revenue. The standard VAT rate is currently 10%, reduced from 12% effective January 1, 2022.

VAT is a consumption tax charged on the sale of most goods and services. If your business is VAT-registered, you charge VAT on your sales (output VAT) and can claim back the VAT you pay on business purchases (input VAT). The difference is what you remit to the Department of Inland Revenue through the OTAS portal.

VAT registration is mandatory for any business with annual taxable turnover exceeding BSD $100,000. You must register within 14 days of crossing that threshold. For more on registration, see

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A reduced rate of 5% applies to certain essential goods as of April 1, 2025, including unprepared food sold in licensed food stores, medications, medical supplies, baby and adult diapers, and feminine hygiene products. Some supplies are zero-rated, meaning VAT is charged at 0% but input VAT is still recoverable, such as exports and international transportation services. Exempt supplies, like residential rent exceeding 45 days, carry no VAT charge and input VAT on related costs is not recoverable. See

for the full distinction.

Every business operating in The Bahamas must hold a valid Business Licence and pay an annual tax based on gross turnover. The Business Licence tax is entirely separate from VAT and is administered under the Business Licence Act.

The tax is calculated as a percentage of your gross annual turnover, with rates varying by turnover bracket and business type. Businesses in regulated industries such as banking, insurance, and telecommunications face different rate structures than general commercial businesses. For most businesses, the rates follow a progressive structure where larger turnover attracts higher rates.

Business Licence renewals are due annually, and operating without a valid licence is illegal. Late renewal attracts penalties, and the Department of Inland Revenue can take enforcement action, including closure orders. The Business Licence tax cannot be offset against VAT. For full details, see

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The National Insurance Board, commonly known as NIB, administers The Bahamas' social insurance programme. If your business has employees, you are required to register with NIB and make regular contributions on behalf of each employee.

The total NIB contribution rate is 9.8% of each employee's insurable wages. This is split between the employer, who pays 5.9%, and the employee, who pays 3.9%. The employer is responsible for deducting the employee's share from wages and remitting the combined amount to NIB.

Contributions are reported on the C10 form, which must be submitted monthly along with payment. The C10 form lists each employee, their insurable wages for the period, and the calculated contributions. Failure to remit NIB contributions on time results in penalties and interest, and persistent non-compliance can lead to legal action.

NIB contributions fund retirement pensions, sickness and maternity benefits, industrial injury coverage, and survivorship benefits. For a comprehensive guide, see

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The Bahamas imposes customs duties on most imported goods. Since The Bahamas imports the vast majority of goods sold and consumed in the country, customs duties represent a significant cost for businesses in retail, construction, hospitality, and food service.

Customs duty rates vary widely depending on the type of goods being imported. Rates are set according to the Bahamas Customs Tariff Schedule and can range from 0% for certain essential items to 45% or higher for luxury goods and vehicles.

Customs duties are paid at the point of entry before goods are released from the port. VAT on imports is then calculated on the CIF value of the goods plus the customs duty, meaning duties increase your VAT liability as well. Unlike customs duties, import VAT can be claimed back as an input tax credit by VAT-registered businesses. For more on import VAT, see

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If your business owns real property in The Bahamas, you may be subject to real property tax. This tax applies to land and buildings based on their assessed market value and is administered by the Department of Inland Revenue.

Real property tax rates are tiered based on the value and use of the property. Commercial properties and vacant land are generally taxed at higher rates than owner-occupied residential properties. Foreign-owned properties face different rate structures.

For businesses that own their premises, real property tax is a recurring annual expense. For businesses that lease, the landlord typically bears the obligation, though it may be passed through in lease terms. Payment is due annually, and late payment attracts interest and penalties.

Stamp duty is a tax on certain legal and financial transactions in The Bahamas. It is most commonly encountered in real estate transactions, but it can also apply to mortgages, share transfers, insurance policies, and certain contracts.

For businesses, stamp duty most frequently arises when purchasing or selling commercial property, taking out a mortgage, or transferring shares. The rates vary depending on the type and value of the transaction. For real estate conveyances, stamp duty is calculated as a percentage of the property value.

Stamp duty is a one-time cost at the point of transaction. The amounts can be substantial for property transactions. Stamp duty applies in addition to any VAT that may be due. Failing to pay stamp duty renders a document inadmissible in court, which can have serious consequences if a dispute arises.

Managing multiple tax obligations simultaneously can feel overwhelming, especially for small business owners. The key is understanding the calendar of deadlines and building compliance into your regular routines.

VAT returns are due by the 21st of the month following each filing period. NIB C10 forms and contributions are due monthly. Business Licence renewals are annual. Real property tax is annual. Customs duties are paid per shipment.

The most common compliance failure is missed deadlines, which trigger automatic penalties. For VAT alone, a missed deadline costs at least BSD $100 plus 10% of any unpaid tax, with 1.5% monthly interest on top. NIB has its own penalty structure, and the Business Licence Act imposes fines for late renewal.

Maintain a compliance calendar that tracks all deadlines across all tax types. Set reminders at least one week before each deadline. Keep your records organised throughout the year rather than scrambling at filing time.