Income includes salary, bonuses, and commissions, plus the value of all other benefits, whether in money or otherwise, including quarters, board, or residence, received or enjoyed in that income year in respect of that office or employment. The provision of rent-free accommodation gives rise to a taxable benefit to the employee up to a maximum of BBD 48,000 per year.
There are special concessions for appropriately qualified foreign employees of corporations engaged in the international financial services sector, whereby up to 60% of their remuneration may be exempt from tax.
Barbados does not impose capital gains tax.
Interest, dividends (except dividends received from companies resident in certain other Caribbean Common Market [CARICOM] countries), rents, royalties, professional fees, business profits and annuities are all subject to tax, as is any type of investment income remitted to Barbados by individuals who are resident but not domiciled in Barbados. 50% of the amount received as royalties is exempt from tax.
Withholding tax (WHT) of 15% is deductible from ordinary dividends paid to resident individuals by local companies if the dividends are paid out of profits derived by the company after 30 June 1992. This represents the individual’s full tax liability on such dividends.
No WHT is deductible from dividends paid to resident individuals if paid out of profits derived by a company prior to 1 July 1992. However, such dividends must be grossed up by 15% and are subject to tax at the individual’s marginal income tax rate. A 15% dividend tax credit may be claimed.
WHT of 15% is deductible from local interest over BBD 100 paid or credited to the account of resident persons. This represents the individual’s full tax liability on such interest. No tax is withheld from interest paid to pensioners of 60 years of age and over.
Interest received by or credited to a special savings account designated as an ‘Education Savings Plan Account’ is exempt from tax.
Income from residential property is subject to tax at a rate of 15%.