Barbados

Inventory valuation

Inventory is generally stated at the lower of cost and net realisable value. First in first out (FIFO) or average values are generally used for book and tax purposes. Last in first out (LIFO) is not acceptable for tax purposes. The Barbados Revenue Authority will normally accept a method of valuation that conforms to standard accounting practice in the trade. Conformity between book and tax values is expected.

Capital gains

Capital gains are not taxed in Barbados.

Dividend income

Dividends between two companies resident in Barbados are not taxed in the hands of the recipient. Dividends received by a resident Barbados company from a non-resident entity where the equity interest owned is at least 10% of the non-resident company and the shareholding is not held solely for the purpose of portfolio investments are not subject to tax.

Dividends paid by a regular business company to a non-resident shareholder are no longer subject to WHT when the amount paid as dividends is derived from income earned from sources outside of Barbados.

Interest income

Amounts received on account of, in lieu of, or in satisfaction of interest are included in the calculation of assessable income. In certain instances (to the extent specified by regulation), certain types of interest may be exempt from inclusion into the calculation of assessable income, including interest on bonds, debentures, or stock of the government of Barbados that is beneficially owned by a non-resident; interest on tax reserve and tax refund certificates; and interest on holdings (within certain limits) of National Development Bonds, National Housing Bonds, Savings Bonds, and Sugar Industry Bonds classified as non-taxable bonds, as well as interest income from some CARICOM countries.

Royalty income

Royalties received by a corporation are taxable as income from a business or property. Royalties earned from CARICOM sources are normally exempt from the payment of CIT.

Partnership income

Amounts received from a partnership or syndicate for the income year, regardless of whether or not these amounts were withdrawn during the income year, are included in the calculation of assessable income.

Foreign income

A Barbados corporation is taxed on foreign branch income as earned. Double taxation is avoided by means of foreign tax credits or an exemption where DTAs exist.