Under the Business Licence Act, businesses operating in the Bahamas are required to obtain an annual business licence and pay annual licence fees.
Applications must be submitted to the Business Licence Unit, a division of the Ministry of Finance (“BLU”).
There is a $100.00 application fee for each licence and the applicant must provide requires proof of incorporation, national insurance registration and possibly other documents depending on the nature of business.
The BLU requires each business licence to state the “nature of business”. If the entity intends to conduct business in several different areas, (e.g. hotel operation, landscaping, restaurant etc.) the BLU requires that the entity submit a separate application for each proposed “area of business”, and the entity will receive a distinct licence for each area.
Once established the entity will pay annual business licence fees according to its “Turnover”. Turnover is defined as being:
“total revenues in money and money’s worth accruing to a person from his business activities in The Bahamas during the preceding year or in such other accounting period as the Financial Secretary may allow, including all cash and credit sales and commissions without any deductions whatsoever…”
Business licences must be renewed annually and an annual licence tax must be paid. The deadline for filing for renewal is 31st January, and the deadline for paying the licence tax is 31st March.
As of 1st July, 2015, businesses with turnover in excess of $100,000 must submit financial statements certified by a qualified accountant in support of the renewal application. The financial statements must be with respect to the preceding calendar year, regardless of the accounting period of the business. As of 1st January, 2016, the renewal application may be filed online.
Effective 1st January, 2016, the following fines and penalties have been imposed:
- $100 for late filing and for late notification of inactivation or cessation of business
- 10% of the tax liability for late payment
The current tax rates are as follows:
- New business – $100.00;
- Business with turnover greater than $50,000 per annum but not exceeding $500,000 per annum – 0.5%;
- Business with turnover greater than $500,000 per annum but not exceeding $5 million per annum – 0.75%;
- Business with turnover greater than $5 million per annum but not exceeding $50 million per annum – 1.25%;
- Business with turnover greater than $50 million per annum – 1.5% of turnover.
Effective 1st July 2015, businesses falling within the category of agricultural and animal husbandry/mixed farming; fishing/fish farms; and food/meat/food processing are taxed at a flat rate of 0.75%.
Last updated February 2016.
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