Barbados Tax Rates
Barbados operates a progressive tax system administered by the Barbados Revenue Authority (BRA). The country levies personal income tax at rates of 12.5% and 28.5%, a competitive corporate tax rate ranging from 1% to 5.5%, and a 17.5% value-added tax. Barbados has positioned itself as a reputable international business center with a growing network of tax treaties, attractive corporate tax rates, and a well-regulated financial services sector.
Top Income Tax Rate
28.5%
Corporate Tax Rate
5.5%
VAT / Sales Tax
17.5%
Capital Gains Tax
0%
Detailed Tax Information
Income Tax Brackets
Barbados imposes a progressive personal income tax with a personal allowance of BBD 25,000 (USD 12,500). Income from BBD 25,001 to BBD 50,000 is taxed at 12.5%, and income above BBD 50,000 is taxed at 28.5%. Residents are taxed on worldwide income; non-residents on Barbados-source income only. Employment income is subject to PAYE withholding. Deductions include mortgage interest, pension contributions, and certain personal allowances.
| Income Range | Tax Rate |
|---|---|
| Bds$0 – Bds$25K | 0% |
| Bds$25K – Bds$50K | 12.5% |
| Bds$50K+ | 28.5% |
Corporate Tax
Barbados reformed its corporate tax system in 2019, replacing the previous dual-rate system with a unified graduated rate structure. Rates range from 1% on the first BBD 1 million of taxable income to 5.5% on income exceeding BBD 30 million. This makes Barbados one of the most competitive corporate tax jurisdictions in the Caribbean. International business companies (formerly IBCs) are now taxed under the same regime. Companies must make quarterly advance tax payments.
Standard Rate
5.5%
Small Business Rate
1%
Capital Gains Tax
Barbados does not impose a capital gains tax. Gains from the sale of real estate, shares, and other assets are not subject to taxation. However, property transfer tax applies on the sale of real estate.
Rate
0%
VAT / Sales Tax
Barbados levies a 17.5% VAT on most goods and services. A reduced rate of 7.5% applies to hotel and tourism accommodations. Basic food items, medicines, and exports are zero-rated. Financial services, education, health, and residential rental are exempt. Bimonthly VAT returns are required.
Standard Rate
17.5%
Cryptocurrency Tax
Barbados does not have specific cryptocurrency tax legislation. Since there is no capital gains tax, crypto trading gains may not be directly taxable unless considered business income. The Central Bank of Barbados has taken a cautious approach to virtual currencies, and the regulatory framework is still developing.
Tax Treaties
Barbados has one of the most extensive tax treaty networks in the Caribbean, with approximately 33 double taxation agreements in force. Key treaties include those with the US, UK, Canada, and China. As a CARICOM member, Barbados benefits from the CARICOM multilateral tax agreement. The country's treaty network has been an important factor in its attractiveness as an international business center.
Treaty Network
33
Double taxation agreements
Major treaty partners:
Key Details
Relocate to Barbados
See how much you could save by moving here from your current country.
$-4,113
Tax in United States
$24K
24.4% effective
Tax in Barbados
$28K
28.5% effective
Additional Cost
16.9%
more tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
