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The Bahamas Government has released a new 16-page VAT Guide, after the publication of revised legislation to introduce the territory's new value-added tax regime from January 1, 2015.
Compared with the prior legislation, which had anticipated that VAT would be in place by July 1, 2014, the new legislation removes a number of exemptions and simplifies administrative requirements.
While it had previously been proposed that a lower threshold of USD50,000 should be in place on professional services and hotels, the Bill now provides for a single VAT registration threshold of BSD100,000 (USD100,000).
Provisions have been made to allow for group registration. A related group of companies would be allowed to use a single VAT account and to file a consolidated VAT return, eliminating the need to recognize input and output taxes on intra-group transactions.
The Guidance, which may be amended based on feedback, has already raised concern locally. There is a disparity between the registration threshold of BSD100,000 and the de-registration threshold. The guidance states that is unlikely that a business may be deregistered for VAT unless the value of taxable supplies has fallen below BSD80,000 in the previous 12 months or if the business can demonstrate that its taxable supplies will remain below BSD80,000 in the next 12 months.
The new Value Added Tax Bill and accompanying regulations were tabled before parliament on July 23, 2014. The new VAT Guide was released on July 30, 2014.
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