Guide to Bahamian VAT Taxability and Rates

Updated 3 months ago

Understanding what is taxed, at what rate, and who pays it is the foundation of VAT compliance in the Bahamas. This guide walks you through the key taxability rules that Kintsugi applies to your transactions.

Standard VAT Rate

The standard VAT rate in the Bahamas is 10%. This applies to most taxable supplies of goods and services made within the country.

Rate	Standard VAT Rate: 10% \| Zero-Rate (Exports): 0%

B2B vs. B2C Transactions

Whether you are selling to a business (B2B) or a consumer (B2C) affects how VAT is handled. Here is a breakdown:

Transaction Type	VAT Treatment
B2B Domestic (both parties in the Bahamas)	Seller charges 10% VAT on the invoice
B2C Domestic (both parties in the Bahamas)	Seller charges 10% VAT on the invoice
B2B Cross-Border Import (buyer in Bahamas, digital services)	Reverse charge applies; buyer remits VAT
B2B Cross-Border Import (buyer in Bahamas, physical goods)	Buyer self-assesses (reverse charge)
B2B Cross-Border Export (seller in Bahamas)	Zero-rated at 0%
B2C Cross-Border Export (seller in Bahamas)	Zero-rated at 0%

How Buyer VAT ID Affects Treatment

If a buyer provides a VAT ID, Kintsugi treats the transaction as B2B. If no VAT ID is provided, the transaction is treated as B2C. This distinction is important for cross-border transactions involving reverse charge rules.

Reverse Charge Rules

The Bahamas does not apply a domestic reverse charge between registered VAT businesses. The seller always charges VAT on the invoice for domestic sales. For cross-border digital services imported by a Bahamian business, the buyer is responsible for self-assessing the VAT.

IMPORTANT

Non-resident sellers must charge Bahamian VAT on both B2B and B2C sales. There is no mechanism for the local buyer to absorb the obligation instead.

Taxability of Specific Scenarios

Scenario	VAT Treatment
Sales to nonprofit entities	Taxable if the supply is not exempt
Digital Services Tax (DST)	Not applicable; no separate DST in the Bahamas
VAT Holidays	Not applicable; no periodic VAT holidays
Classification codes for VAT reporting	Not required in the Bahamas

Exports and Zero-Rating

If you are a Bahamian-based business selling goods or services to customers outside the Bahamas, those sales are generally zero-rated at 0% VAT. You will not charge VAT on the invoice, but you may still need to account for the destination country's VAT separately.

NOTE

Zero-rating applies to the Bahamas VAT only. You may still need to apply the destination country's VAT or GST for cross-border exports. Kintsugi can help identify those obligations.

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