Business Barbados

January 1, 2019, was truly a red letter day for businesses in Barbados, both local and international. On that day, in response to requirements of the Organisation of Economic Cooperation and Development (OECD), Barbados officially dismantled a decades old tax structure that had allowed international businesses to be taxed at far lower rates than local companies. In effect, as well as abolishing a number of incentives to international businesses that the OECD considered to be harmful tax practices, Barbados took down the so- called ‘ring fence’ that had maintained two separate tax rates for local and international business companies. As a result, a one-tiered tax rate system now rules them all. Furthermore, there is now no such thing as an International Business Company as we once knew it. For tax purposes, all companies are now Regular Barbados Companies, regardless of where their customers are and if they are foreign owned. But there is a specific piece of legislation contained in the new tax regime that foreign investors wanting to establish businesses in Barbados need to be aware of, and that is the newly implemented rules that demand ‘economic substance’ from any entity wishing to do business here. 24 / businessbarbados.com Maria Robinson Country Managing Partner, EY Barbados La-Tanya Edwards Caribbean Tax Desk, EY New York. Barbados Legislates for Economic Substance

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