VAT and the Business
You are required to register for and charge VAT under the VAT Act if your past or future 12 months of taxable activity exceeds the $100,000 threshold. Most businesses must apply within 14 days of meeting these requirements or face penalties. For more information about registration, review the VAT Guide for Registration
You can apply online at vat.revenue.gov. bs. You can also create and manage your VAT account via the address.
Yes, you can choose to register voluntarily. You will be required to fulfill all of the obligations of a Mandatory Registrant. Before you are approved, you will have to provide the Comptroller with the following evidence:
- A fixed placed where business is conducted.
- That the business carries on or intends to carry on a taxable activity
- The ability to keep proper records of accounts; and
- That you are able and willing to submit regular and reliable VAT returns.
Although you do not meet the threshold, registering for VAT will place you in the position to legally charge and collect VAT as well as receive refunds on any VAT you may have encountered on the purchases of supplies for your business.
Yes, you must register all the companies separately. If the companies are related to each other by way of ownership you may apply for “VAT Grouping” if desired. For example, a parent company with separate legal entities (subsidiaries) may be conducting different line of businesses that can be grouped.
VAT grouping is a privilege that must be approved by the Comptroller that permits a group of related entities (companies or partnerships) to apply to be treated as a single taxable person for VAT purposes. All companies must be registered separately before applying for grouping.
There are, however, some conditions that must be satisfied in order to be approved and operate as a group. For example, only companies can be grouped and they may not comprise a mix of Freeport licensees and non Freeport licensees, unless they have received or agreed to a similar VAT treatment for all inputs and outputs. Group members must also have at least 51% common ownership via other group members or a common parent company, be supported by shared operating services and qualify to declare consolidated financial statements.
Further information is available in The Bahamas VAT Guide.
If your application is not approved, you will get an email notification stating the reason(s) for such within 21 days of submittal. Once the stated reason(s) is/are resolved, you can resubmit your request for consideration.
An employee or an appointed representative (e.g. external accountant or business advisor) may submit a registration form on your behalf and may be given delegated responsibility to manage your account or aspects of your account (e.g. file returns only).
You can apply to cancel your VAT registration on the following conditions:
- You have ceased conducting taxable activities.
- Your taxable sales activity has fallen below the threshold during the twelve months preceding the request for cancellation;
- You anticipate that the threshold will not be met in the next twelve months following the request for cancellation; and
- A minimum of two years has elapsed since the effective date of registration.
- For administrative purposes, the VAT Department will use a threshold for deregistration of $80,000 per annum
Once your request has been submitted, the Comptroller has 14 days to respond.
A VAT Certificate is a document that allows a registrant to charge and collect VAT as well as receive refunds where the amount of input VAT has exceeded the amount of output VAT. A TIN Certificate does not allow a registrant to charge and collect VAT however they are eligible to receive refunds. TIN Certificates maybe be required by persons or businesses that carry out business with The Government.
All VAT registrants, including voluntary registrants, must display their VAT Certificates prominently, display VAT inclusive prices at the retail level, issue valid invoices and receipts, maintain proper accounts and records, file accurate and timely VAT returns, and remit the net VAT collected (output minus input VAT) to the government within the stipulated deadlines.
VAT is charged on all goods and services that are not zero-rated or exempt.
As a VAT registrant, VAT is not a cost to your business, because you can reclaim input VAT paid on purchases made for the provision of taxable goods and services.
Yes: at the retail level. All retail price displays must include VAT. You must also clearly display a sign that states that your prices are subject to VAT. Restaurants with dine-in table service, however, may publish menus with the VAT exclusive price and the amount of VAT shown separately. Please refer to the VAT Guide for Retail and Wholesale Sectors.
Consumers know that your business can charge VAT once you have a VAT Registration Certificate displayed at your business premises and are able to display a verifiable TIN on VAT receipts. Consumers can also view the VAT registry on the government website www.bahamas.gov.bs/VAT or call the VAT Department Helpdesk Hotline at 225-7280 (toll free) to inquire as to whether a particular business is registered for VAT.
The VAT receipt provides evidence of the unique identity of the seller and of the amount of tax charged on the goods or services. It is given by a VAT registrant supplier to a recipient who is not registered for VAT, indicating that a sale was made or service rendered. The business’ name, address, TIN and the total amount of VAT must be clearly shown on the receipt. Prices of each item on the receipt may be VAT inclusive or exclusive.
A VAT invoice is issued by a VAT registered supplier to a VAT registered recipient indicating that a taxable supply has been made and that the tax has been charged on the value of the goods or services supplied. In addition to the information supplied on a tax receipt it must also include the TIN and name of the recipient. It is the principal evidence that supports a registrant recipient’s claim for deduction of input tax. VAT invoices may also be given to taxpayers who may qualify for a VAT refund such as Embassies, Charities and International Organizations.
You should integrate all record keeping for VAT into your accounting systems. For less computerized systems it is recommended that you use worksheets or ledgers to record daily sales and purchases, the amount of tax you charged and the amount of tax you have been charged. Maintaining a running total of this information in each period will help you complete your tax return. For details on how to account for VAT, review the VAT Guide on Accounting for VAT .
Yes, as a VAT registrant, you are required to keep all records and accounts of VAT paid on purchases and VAT collected from sales for a period of five years. These records should be kept in English and made available to the VAT Department on demand.
The VAT return is a form that is completed and submitted online at regular intervals at vat.revenue.gov.bs. Click here to create and manage your online VAT account. The form requires you to enter the total VAT inclusive amount of sales or supplies you made within the specific period, the amount of VAT you collected from your customers (output tax) will automatically be calculated and the amount of VAT you paid on your purchases (input tax) during the period. Ultimately, the return will calculate the net amount you must pay to the Government or the amount of excess credit which may be used as an input tax deduction in the next tax period..
All VAT returns are completed and submitted online at vat.revenue.bahamas.gov. Detailed instructions on filing returns are found in the VAT Guide on Completing the VAT Return.
VAT returns need to be filed online within 28 days of the end of each tax period. Your VAT period depends on your annual turnover:
- If it exceeds $5 million, your VAT period is monthly.
- If it is less than $5 million, your VAT period can be quarterly, though you can request to file monthly by sending a letter to the Comptroller. Businesses with an annual turnover of less than $0.4 million can apply to submit a semi-annual VAT Return.
You are required to pay any VAT at least the same frequency as filing of your VAT return.
VAT is paid through your commercial bank. Your bank will explain the steps you must take to send payments to Government. You can also make payments online through your online tax account by using a debit or credit card.
You can apply to the Comptroller using the online system for an extension to file a VAT return; however there will be no extension to pay any amounts due. In other words, even if the Comptroller grants an extension to submit the VAT return, you are still expected to make payment of the VAT, if any amounts are due for the period in question. Once an extension is approved, any late filing penalty will be waived, however interest and late payment penalty will be applied if no payment is received.
A VAT registrant can claim a VAT credit (input VAT) for all VAT paid that can be allocated to the provision of a taxable good or service. Monthly filers are required to carry forward any excesses for one additional tax period before applying for a refund. Quarterly and bi-annual filers can apply for the excess in the tax period in which the credit arose. Any taxpayer whose zero rated supplies exceeds 50% of the total supplies in any tax period can also apply for a refund in the period in which this occurs. Application for refunds must be in excess of $500.00. The application for the refund may be subject to an audit review.
If you are a non VAT Registrant, you are not eligible to charge and collect VAT on those goods or services that are subject to VAT nor are you eligible to issue a tax receipt or invoice. You can increase your prices to absorb VAT costs.