Bahamas, The

Bahamas corporate residence for regulatory and tax purposes under the Commercial Entities (Substance Requirements) Act 2023 (CESRA 2023) depends on demonstrating substantial economic activity and management within The Bahamas, not simply incorporation.

Key indicators include the location of the company’s core income-generating activities, the physical presence of employees with sufficient operating expenses, and suitable premises.

Permanent establishment (PE)

The definition of a PE under domestic legislation closely mirrors that provided in double tax treaties (DTTs), generally referring to a fixed place of business through which the operations of an enterprise are conducted. Where a DTT is applicable, the treaty’s definition of a PE supersedes the domestic interpretation.

It should be noted that the DMTT Act does not provide a specific definition for ‘permanent establishment’, although this term is commonly referenced within the context of international treaties. Most treaties explicitly detail scenarios in which an enterprise shall not be considered to have a PE, typically when its activities are solely of a preparatory or auxiliary character.

At present, The Bahamas does not maintain any DTTs or similar agreements with other countries.