In addition to the Government's efforts to enhance revenue collection and administration, the Government is also implementing new tax measures that will impact temporary visitors, residents and businesses. These tax changes will bring new individuals and entities into the tax fold, and bring The Bahamas in line with international best practices. Learn more about the other tax changes in the Budget.
Tax Initiatives to Boost Government Revenue
VAT Enforcement on Vacation Rentals
The Government plans to enforce the provisions in the VAT Act, 2014, which require that all e-commerce services provided for the use, benefit, or advantage of persons within The Bahamas are a taxable supply, even if the providing company is domiciled outside of The Bahamas.This means that businesses operating in the vacation home rental marketplace, such as Airbnb, HomeAway, and VRBO, will have to charge and collect VAT from visitors staying in properties within The Bahamas, and remit that tax revenue to the Government.
Fee Increases and Tax Enforcement for Boating Industry
The Government will increase cruising permit fees from $150 on boats up to 34’ and $300 on boats 35’ and over, to a set of rates based on size and length of stay ranging from $150 per 3 months to $4,000 per year. These rates will become effective January 1st 2020, so as to allow a transition period for the boating industry.
As part of the Customs Modernization Initiative, the Government will introduce an online portal for electronic payments for both cruising permits and eventually for the charter fee. This will not only make boating in our waters more convenient, but it will also help to enhance the efficiency of tax adminitration and compliance.