Income Tax

Income tax rates

Basic Rate

12.5% – applies to the first BDS $50,000

Higher Rate

28.5% – applies to amounts in excess of BDS $50,000

Personal allowance

Persons who are resident in Barbados are entitled to a Personal Allowance of BDS $25,000 per year. This does not apply to non-residents.

If you are entitled to a Personal Allowance, only income exceeding that amount is liable to income tax.

Persons subject to income tax

Any person who is resident and domiciled in Barbados is subject to income tax on—

• income derived in Barbados, and
• income derived from foreign sources whether or not such income is remitted to Barbados.

Any person who is resident but not domiciled in Barbados is subject to income tax on—

• income derived in Barbados, and
• income derived from foreign sources but only such income remitted to Barbados or from which a benefit is derived in Barbados.

Any person who is not resident in Barbados is subject to income tax on—

• income derived in Barbados only.

For persons who are self employed, certain expenses incurred in connection with their trade or business may be deductible from the portion of their income which may otherwise be liable to income tax.

Foreign nationals residing in Barbados on the Welcome Stamp visa are exempt from income tax.

Who is deemed 'resident' for income tax purposes

Any person who—

• spends in the aggregate more than 182 days in Barbados during a given tax year, or
• has a permanent home in Barbados and has given notice to the Revenue Commissioner that he or she intends to reside therein for a period not less than two consecutive tax years (including the tax year in which notice is given)

is deemed 'resident' for income tax purposes. ^[1]

Who is deemed 'domiciled' for income tax purposes

'Domicile' is a general law concept and the Parliament of Barbados has not defined what this means even though the law makes reference to it. A person's domicile status is independent of their nationality or citizenship.

In general, the 'domicile' of a person is understood to be referring to the country to which a person belongs. This is usually established at a person's birth, known as domicile of origin.

In some cases, a person's domicile may change during their life. For example, if a person made Barbados their permanent home and renounced their native land, they might eventually be deemed 'domiciled' in Barbados even if they were originally 'domiciled' in another country.

A person who is domiciled in Barbados and moves overseas is likely to remain domiciled in Barbados even if they live overseas for many years. For example, if a Barbadian moves to the UK as an adult, the tax authorities in both countries are likely to deem that person to be domiciled in Barbados for at least 15 years.

You cannot change your domicile status merely by deciding to do so. It usually only changes if it is patently clear over a very long period of time that you abandoned your place of origin.

Persons exempt from income tax

Any person who resides in Barbados on the Welcome Stamp visa is treated as non-resident for income tax purposes, even if they spend in the aggregate more than 182 days in Barbados during that tax year. ^[2] If this applies to you, please note that you may still be liable to income tax in the country from which your income is derived.

Pandemic contribution levy

Effective April 1st, 2022, a levy is payable by any person who is employed or self-employed and earns at least BDS $6,250 a month. The rate of the levy is 1% and expires on March 31st, 2023.

The levy applies to income from a business or trade, employment, dividends (but not foreign source dividends), rental property, interest and director's remuneration/fees. Please note the foregoing list is non-exhaustive.

The levy also applies to a "specially qualified person" who has been granted a tax concession. ^[3] For such persons, the levy is based on their income less applicable concessions.

Notwithstanding the foregoing, the levy does not apply to—

• benefits in kind, or
• income from pensions, or
• foreign source dividends, or
• interest on any bonds issued by the Government of Barbados, or
• a "non-national" who has been granted a Welcome Stamp visa under the Remote Employment Act, 2020, or
• a "qualified person" who has been granted a foreign currency permit under the Foreign Currency Permits Act, 2018, or
• a person who has diplomatic immunities and privileges under the Diplomatic Immunities and Privileges Act, Cap. 18.

Paying the levy

An employer is required to deduct and withhold from the emoluments of a person employed by them the amount of the levy, and to remit the same to the Barbados Revenue Authority, on the 15th of the month following which the employee's income was BDS $6,250 or more. ^[4]

A person who is self employed must pay the levy to the Barbados Revenue Authority on or before 31st March, 2023 if their income is BDS $75,000 or more for the period between April 1st, 2022 and 31st March, 2023. ^[5]

Note: The levy is not deductible for income tax purposes.

Sending levy returns

Employers

You must send a return to the Barbados Revenue Authority, known as a Pandemic Contribution Levy Employer Return, on the 15th of every month for the period May, 2022 to April, 2023. ^[6]

The return must reflect the remuneration of the employees and the sums deducted and withheld in accordance with the Pandemic Contribution Levy Act, 2022. Only the information pertaining to those employees who attract the levy is required.

In addition, all employers must file a Pandemic Contribution Levy Reconciliation to the Barbados Revenue Authority on May 30th, 2023. ^[6]

Employees and self employed persons

You must send a return to the Barbados Revenue Authority, known as a Pandemic Contribution Levy Return, on or before the 30th April, 2023. ^[7]

How to send returns to the Barbados Revenue Authority

Send your returns via TAMIS. Once you are logged in, navigate to Returns > Add Return.

Learn more information

For more information about the levy, please read Policy Note 002/2022.