SERZ Extension

 

The Hurricane Dorian Special Economic Recovery Zone (SERZ) Order of December 4, 2019 has been extended until June 2021 for select key items.

Relief on taxes on goods imported into the SERZ

The importation into a SERZ of goods specified in the First Schedule, for the period commencing on the 1st day January, 2021 and ending on the 30th day of June, 2021, subject to conditions stipulated by the Ministry of Finance, shall be zero rated under the Value Added Tax Act, 2014 (No. 32 of 2014) and exempted from any taxes and fees under:

(i)    Customs Management Act, 2011 (No.30 of 2011);
(ii)   Excise Act, 2018 (No. 22 of 2018); and
(iii)  Tariff Act, 2018 (No. 21 of 2018).

VAT zero rating on local wholesale and retail sales of goods
Within a SERZ, the local wholesale or retail sale of fuel and any goods specified in the First Schedule for the period commencing 1st day of January, 2021 and ending the 30th June, 2021, subject to conditions stipulated by the Ministry of Finance, shall be zero rated under the Value Added Tax Act, 2014 (No. 32 of 2014).

VAT zero rating and relief from import taxes on goods purchased outside of SERZ
(1) In accordance with conditions stipulated by the Ministry of Finance, where goods specified within the First Schedule are sold by a VAT registrant within The Bahamas but outside of a SERZ and shipped into a SERZ by the registrant, to a customer for use within a SERZ:

(a)  the sale shall be zero rated under the Value Added Tax Act, 2014 (No. 32 of  2014).
(b)  the importation of such goods into The Bahamas shall be zero rated under the Value Added Tax Act, 2014 (No. 32 of 2014) and exempted from import tax under the:

(i)    Customs Management Act, 2011(No. 30 of 2011);
(ii)   Excise Act, 2018 (No. 22 of 2018); and
(iii)  Tariff Act, 2018 (No. 21 of 2018).

(2) Where a VAT registrant operating outside of a SERZ has sold goods specified within the First Schedule and shipped the goods into a SERZ to a customer free of import tax in accordance with this Order he may apply to the Customs Department for a refund of the import tax.

Conditions for tax relief on goods
(1) Any person who seeks to remove tax exempted and VAT zero rated goods valued in aggregate in excess of $500 from the SERZ to locations inside The Bahamas outside the SERZ or to export these goods outside The Bahamas, must report the intended movement of the goods to the Customs Department and make the payment of VAT and other taxes and fees to the Customs Department that would otherwise be applicable.

(2) Any person who fails to report and make payment as outlined herein will subject to the seizure of the goods and the payment of fines as prescribed by the Minister of Finance.

TAX ON SALE OF REAL PROPERTY
Discount on value added tax on the sale of certain real property.

(1) For the period commencing on the 1st day of January, 2021 and ending on the 30th day of June, 2021, on the sale of any real property, the purchaser may receive discount on the VAT that is due as a result of that sale, in accordance with the scale below, if the purchaser satisfies one of the conditions specified in paragraph (2)

VAT DISCOUNT ON REAL PROPERTY PURCHASES

VALUE OF CONSIDERATION: FROM VALUE OF CONSIDERATION: TO VAT VALUE DISCOUNT GRANTED

CONDITIONALLY

Zero $100,000 Up to $2,500 50% (Max $1,250)
$100,001 $250,000 $1,000 to $25,000 35% (Max $8,750)
$250,001 $500,000 $25,000 to $50,000

20% (Max $10,000)

 

(2) A purchaser will be eligible for discount on the value added tax due upon the sale of real property if he demonstrates:

(a)   that the property is fully habitable;
(b)   where the property is not fully habitable he has plans to make repairs and can start the repairs within 75 days of closing; or
(c)   where the property is vacant, he has plans showing that he intends to undertake material commercial or residential development of the property.

Where a property was subject of the tax discount under this Order and the purchaser has not started construction, or repairs within 75 days of closing of the sale that tax becomes payable as if this Order was not in force.

Transitional
The importation into a SERZ of goods specified in the Second Schedule shall be zero rated under the Value Added Tax Act, 2014 (No. 32 of 2014) and exempted from any taxes and fees under:

(i)     Customs Management Act, 2011 (No.30 of 2011);
(ii)    Excise Act, 2018 (No. 22 of 2018); and
(iii)   Tariff Act, 2018 (No. 21 of 2018)

Provided that, in accordance with conditions stipulated by the Ministry of Finance, such goods are:

(a)  purchased and shipped by the 31st January, 2021;
(b)  approved by the Ministry of Finance for importation under the provisions of the Disaster Reconstruction Authority (Special Economic Recovery Zones) (Relief) Order, 2020 by the 31st December, 2020; and
(c)  landed into The Bahamas by the 30th April, 2021.

 

FIRST SCHEDULE
(Order 3)
GOODS
Household furniture, furnishings and appliances
Hardware Supplies
Building Materials
Electrical fixtures and materials
Plumbing fixtures and materials

SECOND SCHEDULE
(Order 8)
Replacement Motor Vehicles