Tax Convergence in Barbados The impact on the insurance industry

Overview There are currently two pieces of legislation that regulate the operations of captive insurance companies in Barbados, these are the Exempt Insurance Act, Cap. 308A and the Insurance Act, Cap. 310 (IA). Effective 1 January 2019, the Exempt Insurance Act will be repealed and the Insurance Act will be amended to provide for (among […]

By Deloitte

May 5, 2020

Deloitte Tax convergence - Impact on the Insurance Industry

Overview

There are currently two pieces of legislation that regulate the operations of captive insurance companies in Barbados, these are the Exempt Insurance Act, Cap. 308A and the Insurance Act, Cap. 310 (IA). Effective 1 January 2019, the Exempt Insurance Act will be repealed and the Insurance Act will be amended to provide for (among other things) three (3) classes of licences under which all insurance entities will be classified and regulated.

Class 1

This category will include insurance companies that restrict the business they can underwrite to related party insurance business. (The Financial Services Commission (FSC) will issue guidance as to the criteria for being classified as carrying on related party business). (Applicable tax rate – 0%)

Class 2

This category will include insurance companies that underwrite or can underwrite third party business. (Applicable tax rate 2%)

Class 3

This category will include brokers, other intermediaries, insurance management companies, insurance holding companies, and the like. (Applicable tax rate – 2%)

All classes will pay the relevant licence fee.

Deloitte

“Deloitte” is the brand under which in the region of 200,000 professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, and tax services to selected clients. The Deloitte practice in Barbados is managed by a team of 4 partners and over 60 professional and support staff. The firm is a result of a merger between the previous practice of Deloitte & Touche in Barbados and Toppin, Walker & Co., a prominent Barbados based accountancy firm.

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