📘 Corporation Top-Up Tax Act, 2024-16
The Corporation Top-Up Tax Act, 2024-16 ("the Act"), enacted in May 2024, sets a minimum effective tax rate (ETR) of 15% for multinational enterprise (MNE) groups operating in Barbados. Specifically, it applies to 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 last four 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 effective tax rate falls below 15%, the Qualified Domestic Minimum Top-Up Tax (QDMTT) is applied. The QDMTT is a domestic tax charge that "tops up" the tax paid within Barbados to ensure that the minimum 15% effective tax rate is met, in line with the OECD’s Global Anti-Base Erosion (GloBE) Model Rules under Pillar Two. This mechanism ensures that profits earned in Barbados are subject to at least the minimum level of taxation. Importantly, the Act applies retroactively to fiscal years beginning on or after 31 December 2023 (i.e., from 1 January 2024 for calendar-year taxpayers).
For reference, the technical framework is outlined in the following OECD documents:
- Global Anti-Base Erosion (GloBE) Model Rules
- Commentary to the GloBE Model Rules
- Administrative Guidance on the GloBE Model Rules
These materials provide comprehensive guidance on the global framework underpinning Barbados’ minimum tax regime.
Of note, through this domestic legislation, Barbados gives effect to its commitments under the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS). The Act addresses key international tax concerns identified under BEPS Action 1, which focuses on the tax challenges arising from the digital economy. By implementing the Global Anti-Base Erosion (GloBE) rules under Pillar Two, Barbados aims to reduce harmful tax competition, limit profit shifting, and promote global tax fairness.
📥 Download the full Act(s) below:
Access the official document in PDF format by clicking the link provided.