Banks are allowed to charge VAT on fees that are explicit in nature
|Authored by:||Value Added Tax Department|
|Source:||Value Added Tax Department|
|Date:||January 26, 2015|
FOR IMMEDIATE RELEASE
The Value Added Tax (VAT) Department of the Ministry of Finance wishes to advise the public that banks are allowed to charge VAT on fees that are explicit in nature. Explicit fees are those bank charges where a fixed amount is collected for services offered. These amounts can also be represented as a percentage of a particular figure. Examples of these are fees charged for ATM withdrawals, safety deposit boxes, annual credit card fees and service fees on savings accounts.
There is no VAT on interest charges associated with mortgages or other loan facilities. A complete list of exempt financial services fees can be found in Section 18 of the VAT Regulations.
The public is further advised that they can view the draft VAT rules and Guidance Notes on Financial Services on the government’s website at www. bahamas.gov.bs/VAT. A list of fees that are subject to VAT must also be published and displayed at all banks.
January 20th, 2015