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Corporate - Taxes on corporate income
Last reviewed - 28 August 2024Companies resident in Barbados are taxed on income earned from all sources, whether generated within or outside of Barbados, less expenses incurred for the purpose of producing assessable income in a fiscal period not to exceed 53 weeks. Non-resident companies are generally only taxed on income derived from sources and operations conducted within Barbados.
Corporate income tax (CIT) rates
The following rates apply to taxes on corporate income:
| Category | Income year 2024 | Income year 2025 |
| All companies except those that meet the below criteria: | 9%* | 9%* |
| Companies that are members of an MNE group, with an annual consolidated revenue of EUR 750 million or more, whose ultimate parent entity or intermediary parent entities are located in a jurisdiction that has not enacted top-up tax legislation | 5.5% - 1% | 9% |
| Companies registered as approved small businesses | 5.5% | 5.5% |
| Companies engaged in international shipping business | 5.5% - 1% | 5.5% - 1% |
| Class 1, Class 2, and Class 3 insurance companies | 0% - 2% | 0% - 2% |
| Income derived from qualifying intellectual property (IP) | 4.5% | 4.5% |
* Effective 1 January 2024
Domestic Qualified Minimum Top-up Tax (QDMTT)
A top-up tax of 15% has been introduced effective 1 January 2024. The aim of the top-up tax is to establish a minimum tax rate of 15% for certain qualifying MNE groups.
There are transitional reliefs available to MNE groups where:
- the MNE group is deemed to be in an initial phase of international activity, or
- for the first fiscal year commencing on or after 1 January 2024, the income of an MNE group is not subject to an IRR or UTPR in another jurisdiction.
A de minimis exclusion election is also available and would operate to reduce the top-up tax to zero where:
- the average qualifying revenue of the MNE group is less than EUR 10 million, and
- the average qualifying income of the MNE group is a loss or less than EUR 1 million.
The filing entity of a Domestic Minimum Top-Up Tax (DMTT) group may also make a transitional safe harbour election for a fiscal year. Where such an election is made, all qualifying entities of a DMTT group will be deemed as not having top-up tax liability if a qualifying CbCR has been prepared in relation to Barbados for the fiscal year and at least one of the three tests on revenue threshold, simplified effect tax rate, or routine profits levels are met.
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