Bahamas VAT Cash Accounting Scheme Approved
- Mar 18, 2015 | Gail Cole
Small businesses having $1 million or less in revenue now qualify for the Bahamas’ Cash Accounting Scheme. Any wishing to continue using the less simple accrual accounting are welcome to do so.
According to a VAT Department spokesperson, “These businesses do not need to take any other steps to use this simplified approach to complete their returns. It will be available when they submit their first returns in April.”
Cash Accounting Scheme
The Cash Accounting Scheme entitles qualifying businesses to “claim VAT credits for actual bills paid or purchases made.” To determine the final amount of VAT owed, most businesses will uses the following two pieces of information:
- Total sales (including VAT) based on actual payments rate than bills.
- Total amounts paid (including VAT) for imports and for purchases from other VAT registrants.
The final amount due is the “difference between these two values, when multiplied by the VAT fraction of 3/43.” Businesses may find themselves either owing the government more, or eligible for a refund.
Flat Rate Scheme
The Bahamas offers a further simplification for “most businesses with revenues under $400,000 per annum.” Under the Flat Rate Scheme, qualifying businesses owe the government a VAT of 4.5% of collected revenue.
The Flat Rate Scheme is not open to licensees of the Grand Bahama Port Authority because they “do not have to pay VAT on the same range of purchases as registrants elsewhere in the Bahamas.” Additional information is available at Bahamas islands info.
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