A company is considered to be tax resident in Barbados if its central management and control is located in Barbados whereas it is deemed to be domiciled in Barbados where it is incorporated in Barbados.
Barbados resident and domiciled companies are subject to tax on their worldwide income regardless of whether the income is remitted to Barbados, whereas a company that is tax resident but not domiciled in Barbados is taxed on income derived from Barbados as well as any foreign-source income that is remitted to Barbados. However, companies that are neither resident nor domiciled in Barbados are taxed only on income derived from Barbados.
The income of a company is the profit derived from that business or property in an income year. One notable exception relates to the taxation of dividends. The Barbados Income Tax Act ("BITA") provides that where a Barbados company earns dividend income from a resident and in some cases a non-resident subsidiary, these dividends will not be subject to corporation tax in Barbados. In the case of a non-resident subsidiary, this provision applies only where the Barbados company holds more than 10% of the capital of the subsidiary other than as a portfolio investment.
Amounts expended by a company for the purpose of producing taxable income, are deductible in the calculation of its total taxable income for that year of assessment.
In relation to the impact of COVID-19 on the tax residency status of individuals and companies in Barbados, the Authority has issued Policy Notes.