Generally, the withholding tax on income under the Barbados Income Tax Act is 15%.
For payments from Barbados by other companies, the following treaty withholding rates apply:
- Dividends 0-15%
- Interest 5-15%
- Royalties 5-15%
- Management Fees 0-15%
For non-treaty countries, the withholding rate is 15%.
Interest on bonds, debentures or stock of the Government of Barbados, beneficially owned by a non-resident person is exempt from withholding tax.
Obligations of companies in respect of Directors
In order for a resident Director to satisfy his tax obligation, a company is required to withhold the income tax at source (and pay it into the Authority).
It is worth noting that the now-replaced International Business legislation once provided for exceptions to the obligations to withhold the income tax at source from non-residents depending on the provisions in the enabling legislation.