Commercially Scheduled Air Services for VAT Purposes and VAT on Fuel

Posted on: January 4, 2016

January 4th, 2016 (Nassau, Bahamas) – The Ministry of Finance and Department of Inland Revenue wishes to advise the public that effective January 1st, 2016, zero-rated treatment is only to apply to regularly scheduled passenger, freight and courier services. The treatment also extends to the equivalent of C135 operators who can provide evidence to the VAT Comptroller and Customs Departments that they provide, on average, at least once-weekly flights to or from The Bahamas, even if limited to a specified tourist season.

To facilitate this process the Department of Inland Revenue will issue Tax Identification Numbers (TINs) to all commercial operators and provide certificates on a case by case basis to identify which operators will be eligible for zero-rated treatment on services provided by Fixed Bound Operators (FBOs). An expedited process will be put in place to process these applications during January 2016. While this is akin to business licensing, non-Bahamas based foreign carriers will remain exempt from licensing fees and related requirements. This amended approach will remove all responsibility from FBOs to directly obtain the commercial designation for any of their customers.

For audit purposes, FBOs will be required to issue VAT invoices (which must cite the TIN) to recognized scheduled carriers, and maintain a copy of each certificate of eligibility for zerorating on file.

Once carriers have received their “commercial” designations FBOs will be permitted to provide back-dated credit for VAT charged to such customers on or after January 1 2016, and offset any output VAT liability for such in amended return filings.

Finally, with regards to the sale of fuel to aircrafts at the time of departure, the policy is unaltered. Zero-rated supplies are to continue only in respect of those recognized international flights categorized as commercially scheduled.

For more information call the department toll free at (242)-225-7280 or (242)-461-8050 or
email us at taxinquiries@bahamas.gov.bs



All News

Real Property Tax Notice of Assessment 2020

In accordance with the Real Property Tax Act, Chapter 375 as amended, the Chief Valuation Officer has hereby given the 2020 RPT Notice Click the link below to see the Real Property Tax Notice 2020. https://inlandrevenue.finance.gov.bs/wp-content/uploads/2019/10/RPT-Notice-2020.pdf  

Advisory Regarding VAT Payments on Insurance Claims

Department of Inland Revenue’s Advisory regarding VAT Payments on Insurance Claims The Department of Inland Revenue advises the general public that VAT is not charged on insurance claims. Click link below for full press release Press Release – VAT on Insurance

VAT Filing Extension & Business Licence Suspension (Abaco & Grand Bahama)

In the aftermath of Hurricane Dorian, The Department of Inland Revenue wishes to advise all VAT registrants operating businesses on Abaco, the Abaco Cays and/or Grand Bahama that the filing of VAT returns due September 21, 2019 and October 21, 2019 have now been extended until November 30, 2019; for businesses requiring an extension. Click the link below for full…

New Year to bring several ‘ease of doing business’ reforms for starting a new business

The Ministry of Finance will roll out a provisional business license in the New Year to significantly reduce the time it takes to start a new business. This addition was approved by Parliament during the 2018/2019 budget exercise, and will be implemented by the Department of Inland Revenue in the first quarter of 2019. Click…

Inland Revenue Open on Saturdays in January

The Department of Inland Revenue is opening its Client Services Centre on Saturdays for the month of January to support businesses applying for business licence renewals. Click the link below for the full Press Release Press Release – Inland Revenue open on Saturdays in January