Business Barbados

Under the BITA, relief is provided from double taxation by means of a tax credit which is allowed for taxes paid to foreign jurisdictions by Barbados resident companies on profits, income or gains earned from such foreign jurisdictions, regardless of whether Barbados has entered into a double tax treaty with the foreign jurisdiction. An underlying tax credit is also allowed with respect to foreign dividends if the Barbados company owns at least 10% of the capital of the foreign company. Alternatively, unilateral relief may be granted on income arising from British Commonwealth countries that provide reciprocal relief.

Barbados also has an expansive network of double taxation treaties. The following are the withholding tax rates applicable to dividends, interest and royalties paid to residents of countries with which Barbados has a double taxation treaty.

Dividends %Interest %Royalties %
Austria15 (a)00
Botswana12 (b)1010
Canada151510
CARICOM (c)01515
China10 (d)1010
Cuba15 (b)105
Czech Republic15 (r)510 (u)
Finland15 (a)55
Iceland15 (a)105
Ghana (e)7.5 (a)7.5 (f)7.5
Luxembourg15 (g)00
Malta15 (h)55
Mauritius555
Mexico10 (a)1010 (i)
Netherlands15 (j)55 (k)
Norway15 (a)55
Panama11.25 (l)7.5 (m)7.5
Portugal (r)15 (r)105
Seychelles555
Spain5 (t)00
Sweden15 (a)55
Switzerland15–(n)0
United Kingdom0150 (o)
United States15 (a)55
Venezuela10 (h)15 (p)10
Nontreaty countries15 (q)1515
  1. The rate is reduced to 5% if the beneficial owner of the dividends is a company that owns at least 10% of the capital of the payer of the dividends.
  2. The rate is reduced to 5% if the beneficial owner of the dividends is a company that owns at least 25% of the capital of the payer of the dividends.
  3. This is the CARICOM double tax treaty. Income is taxed in the country of source only.
  4. The rate is reduced to 5% if the beneficial owner of the dividends is a company (other than a partnership) that holds directly at least 25% of the capital of the company paying the dividends.
  5. This treaty has been ratified by Barbados only. Consequently, the provisions of the treaty are not yet effective.
  6. The rate is reduced to 5% if the interest is derived by a bank that is resident in Ghana.
  7. This rate is reduced to 0% if the beneficial owner is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends for an uninterrupted period of at least 12 months before the decision to distribute the dividends.
  8. The rate is reduced to 5% if the beneficial owner of the dividends is a company that owns at least 5% of the capital of the payer of the dividends.
  9. The term “royalties” includes payments derived from the alienation of rights or property that are contingent on the productivity, use or disposition of such property.
  10. The rate is reduced to 0% if the beneficial owner of the dividends is a company that owns at least 10% of the capital of the payer of the dividends and if the recipient of the dividends is a company resident in the Netherlands that is not subject to Netherlands company tax on the dividends.
  11. The rate is reduced to 0% for royalties paid for the use of, or the right to use, literary, artistic or scientific works, including royalties with respect to cinematographic films, and films, discs or tapes for radio or television broadcasting.
  12. The rate equals 75% of the statutory nominal rate applicable at the time of dividend distribution. It is reduced to 5% if the beneficial owner of the dividends is a company that owns at least 25% of the capital of the payer of the dividends.
  13. The rate is reduced to 5% if the interest is derived by a bank that is resident in Panama.
  14. The treaty does not contain an interest article. Consequently, the normal tax rate applies.
  15. The rate is 15% for royalties paid for motion picture or television films.
  16. The rate is reduced to 5% for interest paid to banks.
  17. The rate is reduced to 0% if the dividends are paid out of income earned from foreign sources.
  18. The rate is reduced to 5% if the beneficial owner of the dividends is a company that owns at least 25% of the capital of the company paying the dividends
  19. This rate is reduced to 5% for any copyright of literary, artistic or scientific work including cinematograph films, and files or tapes for radio or television broadcasting.

  20. This rate is reduced to 0% if the beneficial owner of the dividends is a company that directly owns at least 25% of the capital of the company paying the dividends.