Corporate - Group taxation

Last reviewed - 28 February 2024

There are no group taxation provisions in Barbados.

Transfer pricing

Although Barbados has no specific transfer pricing legislation or regulations in place, the Income Tax Act contains a section dealing with artificial transactions. This enables the revenue authorities to amend the assessable income of a person where they believe the main purpose of a non-arm's-length transaction is to artificially reduce that person's assessable income.

In such circumstances, the transaction is disregarded or modified to achieve the effect that no longer results in the artificial reduction of that person’s assessable income.

Thin capitalisation

Barbados has introduced a thin capitalisation rule of 1.5 to 1 effective 1 September 2019. Interest payable on outstanding debts due to non-resident related parties, owning more than 10% of the company, will be deductible to the extent that the total amount of debt does not exceed more than one and a half times the equity of the company. Any portion of interest exceeding the above ratio will no longer be deductible.

Controlled foreign companies (CFCs)

Barbados does not have tax provisions with respect to CFCs.