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Bahamas enforces VAT on foreign digital services

  • Nov 3, 2020 | Richard Asquith

The Bahamas’ Department of Inland Revenue is seeking to enforce the existing VAT obligations for non-resident sellers of digital services to consumers. Bahamas introduced Value Added Tax on 1 January 2015. At the time, it included digital or electronic services in the VAT net. Check Avalara's global VAT on digital services tracker. 

There is a VAT registration threshold of BSD 100,000 for foreign providers of electronic sellers or marketplaces. A trading licence to sell e-services is required.

A new initiative was announced in October 2020 for standard collections process to level the playing field for domestic provider

B2B transactions are the responsibility of the business customer. But the provider is still required to be VAT registered and report the transaction. VAT invoices for B2C transactions come into the form or receipts only. B2B transactions require a full VAT invoice.

"If we do not uniformly enforce the law we are putting Bahamian companies at a competitive disadvantage. Local newspapers and televisions, for example, have to charge VAT on advertising services. We are levelling the playing field, while doing all we can to standardize revenue collection," said Minister Turnquest.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.