📘 Corporation Top-Up Tax Act, 2024-16
The Corporation Top-Up Tax Act, 2024-16 ("the Act"), enacted in May 2024, establishes a minimum effective tax rate (ETR) of 15% for certain multinational enterprise (MNE) groups operating in Barbados. It applies to constituent entities located in Barbados that are part of an MNE group with consolidated annual revenues of at least EUR €750 million (approximately BBD $1.681 billion) in at least two of the four previous fiscal years.
The effective tax rate is calculated at the jurisdictional level, meaning it is based on the combined income and taxes of all constituent entities of the MNE group operating in Barbados. If this Barbados-specific ETR falls below 15%, the Qualified Domestic Minimum Top-Up Tax (QDMTT) is applied. This ensures that profits earned in Barbados are subject to at least the minimum level of taxation, in line with the OECD’s Global Anti-Base Erosion (GloBE) Model Rules under Pillar Two.
This regime is part of Barbados’ commitment to the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), and specifically addresses international tax concerns identified under BEPS Action 1, which focuses on the tax challenges of the digital economy. The implementation of Pillar Two aims to reduce harmful tax competition, limit profit shifting, and promote global tax fairness.
The Act applies retroactively to fiscal years beginning on or after 31 December 2023 (i.e. as from 1 January 2024 for calendar-year taxpayers).
📥 Download the full Act(s) below:
Access the official document in PDF format by clicking the link provided.