New Revenue Measures - Bahamas
July 2013

The Bahamian Government in its budget review for the fiscal year 2013/2014 has implemented new revenue measures to take effect on July 1, 2013 as follows:

Mortgagees of Commercial Property and Undeveloped Land

The mortgagee of commercial property or undeveloped land will now be responsible for the payment of real property taxes or surcharges which remain outstanding after 90 days of becoming due. If the mortgagee fails to pay the tax or surcharge owing, the mortgagee forfeits its right to recover these sums from the mortgagor.

Business Licence Fees

Except for financial institutions and stand-alone retail gas stations, all special categories of rates for various businesses have been eliminated and business licence fees will now be payable as follows:

Turnover of $50,000-$500,000: 0.5%
Turnover of $500,000 -$5M: 0.75%
Turnover of $5M-$50M: 1.25%
Turnover of $50M -$100M: 1.5%
Turnover greater than $100M: 1.75%

The subsidiaries of a company will now be charged the same business licence fee as the parent company.

Stamp Tax on Marina Slips

Stamp tax will now be payable on marina slips operating under a crown land lease arrangement. Previously, the sale or lease of marina slips was exempt under the Stamp Act.

Family Island Development

The Family Island Development Encouragement Act has been extended for an additional year to 30 June 2014.

Stamp Tax on Remittance Overseas of Dividends and Profits

Where dividends or  profits or payments for services to be rendered by a related party in the sum of $500,000 or greater per annum are remitted or transferred out of The Bahamas, stamp tax at the rate of 5% will now be payable under the Stamp Act.

It is not certain whether this new tax is meant to apply not only to international "non-resident" businesses but also to real estate and commercial transactions involving foreign owners.  Given this uncertainty, the precise scope of this new tax will need to be clarified.

Stamp Tax Exemption for First-Time Home Buyers

The stamp tax exemption granted to first-time home buyers has been extended for an additional five years from 1 July 2013 to 30 June 2018 and the following amendments have been implemented:

• The exemption is now only applicable to Bahamian citizens. 
• The exemption no longer applies to the purchase of vacant land for the construction of a single family residence.
• There the aggregate value of the conveyance and the mortgage exceeds $500,000, the exemption will not be applicable.

Due to a policy decision, there is some uncertainty whether net transactions will receive the full exemption.  In such cases, it appears that only a 50% exemption will be granted.

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