- Proposed VAT Amendments: The Bahamas government introduced the Value Added Tax (Amendment) (No.2) Bill 2025, submitted to parliament on May 28, 2025, which proposes several changes to the VAT Act, primarily effective from July 2025, focusing on VAT refunds and restrictions on deductions.
- Changes to VAT Refunds: The amendments replace Section 56 of the VAT Act regarding the carry forward of excess credits, stipulating that excess credits can only be refunded if a taxpayer cancels their VAT registration, and introduces provisions for claiming refunds when a registrant expects at least 50% of their taxable supplies to be zero-rated or reduced-rate supplies.
- New Restrictions on Input Tax Deductions: A new Section 56a allows for refunds of overpayments, while also introducing restrictions on VAT deductions for construction projects classified as “major construction,” defined by project costs exceeding BSD 1 million and other significant construction activities, with specific exemptions for taxable persons engaged in real property supplies.
Source Orbitax
