Effective January 1, 2019, Barbados has announced major changes to its corporate tax and international company regimes. This has been an effort to comply with the Organization of Economic Cooperation and Development’s framework on Base Erosion and Profit Shifting. One of the key changes include repealing the International Business Companies Act and amendment of the societies with restricted liability act to remove all references to International Societies with restricted liability.
Other changes include the abolition of separate tax rates for international and domestic entities and convergence into one corporate tax regime and that existing IBC’s and ISRL’s that meet certain criteria may be eligible to be grandfathered and can continue to enjoy the benefits and exemptions under the former acts until the end of June in 2021.
An important note to make, entities that earn 100% of their income in foreign currency will be entitled to apply for a foreign currency permit which will provide the benefits and exemptions currently enjoyed by IBC’s and ISRL’s.
New corporate tax rates will also go into effect. This will affect all non-grandfathered entities (except Insurance companies) which decrease in rate based on the taxable income.
For more information on this, please contact us and one of our highly trained corporate specialists will contact you with additional information.