Income Tax

Barbados Income Tax Income Tax is levied on the income of persons resident or non-resident in Barbados. There is no tax on capital. The system of taxation is based on self-assessment.

Individuals

Barbados Income Tax Income Tax is levied on the income of persons resident or non-resident in Barbados. There is no tax on capital. The system of taxation is based on self-assessment.

Calcualtion of Assessable Income

The following allowances are granted to a resident individual:

  • Personal Allowance - $40,000 - for an individual who is 60 years or over and is in receipt of a pension. $25,000 for all others who would have resided in the counrty for more than a 182 days during the calendar year.
  • Spouse Allowance - An individual may claim a spouse allowance of $3,000 for a spouse who had been habitually living with him/her if that spouse had no income or had investment income of $800 or less. Note: A person who has exempt income is not entitled to claim a spouse allowance.
  • Child Allowance - $1,000 for each child which includes a legally adopted child and a stepchild. An individual may not claim more than two children.

Deductions include:

  • National Insurance Contributions - Amounts contributed by that person on behalf of his/her employee(s). Note: National Insurance Contributions deducted from salary or wages are not an allowable deduction for tax purposes.
  • Subscriptions to Trade Unions/ Statutory Associations - Up to $240 annually.
  • Energy Audit/ Electrical Retrofittings - Systems installed to produce electricity from sources other than fossil fuels.(a) For individuals the maximum claim is $10,000 per year for five years. The unused portion can be carried forward for four years.
  • Medical Expenses- A claim of up to $750 for persons 40 years and over who have had a comprehensive medical examination.

 

Payment of Tax

Pay As You Earn (P.A.Y.E.) System

Tax on the earnings of employees is under a non-cumulative Pay As You Earn system. An employee is entitled to file with his employer a declaration form claiming the personal allowances to which he is entitled. The employer deducts tax for each pay period with reference to the appropriate tax table and the allowances claimed. Each pay period is treated separately and the cumulative pay and tax deductions are not taken into account. Any remainder of tax owing, as shown on the annual tax return, due by the 30th April of the following year may be paid in two equal instalments on April 30th and September 30th. 

By Installments

All entrepreneurs and persons receiving rents are required to pay 25% of tax paid as indicated on their returns for the preceding year, on June 15th, September 15th and December 15th. Any remainder of tax owing as shown in the submission of annual tax returns must be paid to the Barbados Revenue Authority on or before April 30th in the following year.

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