Barbados Tax Treaties
The Barbados tax treaty network consists of Bilateral Investment Treaties, Double Taxation Agreements and Tax Information Exchange Agreements. These tax treaties facilitate international business and create exciting opportunities for individuals and businesses to benefit from Barbados’ low tax rates.
Bilateral Investment Treaties
The main purpose of a Bilateral Investment Treaty is to increase prosperity between treaty partners by encouraging the exchange of investment between countries through the creation of favourable conditions for investment and the provision of reciprocal protection. Some of the measures to facilitate this include protection from expropriation, compensation for losses, the use of international arbitration and the free transfer of investments and returns.
Barbados has 8 Bilateral Investment Treaties with partner countries including: Canada, China, Cuba, Germany, Italy, Mauritius, Switzerland, United Kingdom, and Venezuela.
Double Taxation Agreements
Double Taxation Agreements serve the important purpose of setting maximum withholding taxes that can be charged on dividends, interest and royalties between partner countries. An Agreement usually offers the partner country a preferential withholding tax rate and as such, improves trade and international business.
A Double Taxation Agreement also serves to eliminate double taxation between partner countries. Companies registered in Barbados receive a tax credit to compensate them for any taxes paid overseas. This foreign tax credit can be used to reduce the tax payable in Barbados down to a minimum of 1% of taxable income.
Barbados has 21 Double Taxation Agreements in place with partner countries including: Austria, Botswana, Canada, CARICOM nations, China, Cuba, Finland, Luxembourg, Malta, Mauritius, Mexico, Netherlands, Norway, Panama, Seychelles, Spain, Switzerland, United Kingdom, USA, and Venezuela.
Tax Information Exchange Agreements
Tax Information Exchange Agreements aim to improve international tax cooperation between countries through the exchange of information relating to tax matters. Barbados has signed Tax Information Exchange Agreements with Denmark, Faroe Islands, and Greenland, while initialling others with France and Germany.
The Barbados Tax Treaty Advantage
Barbados’ large and expanding tax treaty network has made the island a leading low tax international business hub. The full suite of treaties provides an assortment of benefits for both the island and its treaty partners creating a strong international network through which business and investment can grow and flourish.
Barbados’ emphasis on an international treaty network gives it a distinct advantage over other offshore jurisdictions that have chosen not to sign treaties. The Barbados network provides for lower withholding taxes, the removal of double taxation and strong asset protection that some of the other low tax jurisdictions cannot offer.
Seaside Realty has partnered with the Barbados Offshore Advisor to bring our clients the experience and professional network that they need to succeed. Please contact us to get assistance with all of your international business needs.