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VAT rates in the Bahamas

Quick overview

Standard Rate Reduced Rate Other Rates
12% 2.5%, 7.5% & 10% Zero-rated (0%) and exempt

The local name for VAT in the Bahamas is Value-added tax (VAT).

There are basically 4 VAT rates in the Bahamas:

  • Standard VAT rate is 12%
  • Reduced VAT rates of 2.5%, 7.5% and 10%

Recent developments

For more information about (recent) rate change developments in the Bahamas, please click HERE.

Standard rate: 12%

This rate applies for all transactions that take place in the Bahamas, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).

Reduced rate: 7.5%

  • Flat rate scheme for businesses that make supplies of goods or services at the standard rate of VAT. To calculate the input VAT, the taxpayer applies the flat rate of 7.5% to net sales

Reduced rate: 2.5%

  • Conveyances, mortgages, long-term leases and other real property transactions

Exempt supplies, without the right to deduct VAT

  • Domestic financial services, other than those provided for an explicit fee
  • Insurance services
  • Medical services
  • Rental of a residential building

Zero rate (0%)

  • Services that relate to land and property outside the Bahamas
  • Export of Goods
  • Export of certain professional, financial and insurance services
  • The transfer of a business
  • Prescription medication and most over-the-counter medication
  • Basic foof products

A global VAT/GST rate overview can be found here (note this is a work in progress).

This post was last updated on October 27, 2021

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