Barbados is the most easterly island of the Caribbean island chain, located at 13° 10’ N and 59° 32’ W. The closest neighboring islands are St. Vincent & the Grenadines and St. Lucia which are located to the west, while Trinidad and Tobago is located to the south. Barbados is located approximately 2,573km (1,600 miles) southeast of Miami, Florida.
Barbados has been a sovereign independent state within the Commonwealth since 1966. The first elections based on universal adult suffrage took place in 1951. The government of Barbados is a parliamentary democracy where the political party with the greatest representation in parliament forms the government.
Companies and societies with restricted liability that are resident in Barbados are subject to corporation tax. Resident and domiciled companies are subject to corporation tax on their worldwide income, regardless of whether the income is remitted to Barbados. Resident companies that are not domiciled in Barbados are subject to corporation tax on income derived from Barbados and income from foreign sources to the extent that such foreign income is remitted to Barbados. Nonresident companies carrying on business through a branch pay tax on Barbados source income only. Income is considered to be Barbados-source if the property that constitutes the source is physically located in Barbados.
A company is considered to be resident in Barbados if its management and control are located in Barbados. The domicile of a company is based on the country of incorporation. Consequently, a company incorporated in Barbados is domiciled there.
All domestic companies, including branches of nonresident companies, are subject to tax at a basic rate of 25%. A 15% rate applies to manufacturing companies and to net income derived from the rental of residential property. Income derived from Barbados government securities by domestic companies is taxed at a rate of 12.5%. A branch operating in Barbados pays an additional 10% on its after-tax profits if those profits are remitted or deemed to be remitted.
No tax is required to be withheld from the payment of dividends, interest, royalties, management fees and rents if paid to non-residents by companies operating in the International Business and Financial Services Sector.
Barbados has concluded tax treaties with the following jurisdictions: Austria, Botswana, Canada, CARICOM, China, Cuba, Czech Republic, Finland, Ghana, Luxembourg, Malta, Mauritius, Mexico, Netherlands, Norway, Panama , Portugal, Seychelles, Spain, Sweden, Switzerland, United Kingdom, United States, Venezuela.