Barbados

Corporate - Significant developments

Last reviewed - 29 January 2021

Barbados has joined various other countries around the world in introducing VAT on digital services.  The new tax measure will apply to foreign suppliers of digital services to local consumers on the island.  The foreign companies must apply, collect and remit VAT on their digital sales.

The new measure will affect:

  • the collection of VAT on goods and services purchased online from a vendor outside Barbados where the goods and services are for consumption in Barbados;
  • the collection and transmission of VAT on goods and services purchased online from local vendors by consumers in Barbados where the goods and services are for consumption in Barbados and the transaction is processed outside Barbados; and
  • the collection and transmission of VAT on goods and services purchased online from local vendors by persons outside Barbados where the goods and services are for consumption in Barbados.

Ratification Instrument for MLI

On December 21, 2020, Barbados deposited its ratification instrument for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).  This will enter into force from April 1, 2021.