January 2020 | By

Special Tax Relief for Abaco and Grand Bahama

To encourage the rebuilding effort in Abaco, Grand Bahama and the surrounding Cays (the “Zone”) after Hurricane Dorian, tax relief is now available under the Disaster Reconstruction Authority (Special Economic Recovery Zone) (Relief) Order, 2019.

Real Property Tax

Any improved property located within the Zone that was either partially or completely destroyed as a result of the hurricane will be exempt from real property tax in 2020, if the property is rebuilt or otherwise habitable by 1st October, 2020.

If the property is not rebuilt or otherwise habitable by such date, there will be no tax break and the taxes owing in 2020 will be added to the tax bill in 2021.

It remains to be confirmed by the Department of Inland Revenue what evidence will be required to show that the property has been rebuilt or is habitable but we expect that these requirements will be clarified in due course.

Sale of Real Property

From 4th December, 2019 to 30th June, 2020, a purchaser of real property will be eligible to receive a discount on VAT on the conveyance at the rates shown below if he can demonstrate:

(a) that the property is fully habitable; or

(b) if the property is not fully habitable, he has plans to make repairs and can start the repairs within 75 days of the closing; or

(c) if the property is undeveloped, he has plans showing that he intends to undertake material commercial or residential development of the property 

If the repairs or construction is not commenced within 75 days of the closing of the sale, the tax becomes payable.

PURCHASE PRICE RATE OF VAT DISCOUNT
Up to $100,000 2.5% 50%
$100,001 – $250,000 10% 35%
$250,001 – $500,000 10% 20%
$500,001 – $1,000,000 10% 15%

 

Business Licence 

Relief from business licence tax is available to businesses operating within the Zone for a period of one year beginning on 1st January, 2020, if the business increases its staff by 31st August, 2020 to 50% of the number of persons that were previously employed on 31st August, 2019.

A business located and operating solely within the Zone will be exempt from business licence tax.

For a branch or subsidiary of a business operating within the Zone, the business licence tax associated with the turnover derived from the branch or subsidiary will be deducted from the aggregate business licence tax of the business or group.

Import Duties

From 4th December, 2019 to 30th June, 2020, subject to conditions stipulated by the Ministry of Finance, the importation of certain of food items, medical, household and building supplies (as listed below) to the Zone will be exempt from VAT and import duties. Likewise, the local wholesale or retail sale of such goods and the retail sale of fuel will be exempt from VAT.

GOODS

Unprepared Food of all types, including packaged and processed foods

Water

Fruit & Vegetable Juice

Personal Hygiene Products Medicine and Medical Supplies

Clothes, Footwear, Hats, Belts, Socks, Stockings, Gloves, Scarves

Cleaning Supplies

Beds & Bedding Materials

Hardware Supplies

Building Materials

Landscaping Supplies

Pest Control Supplies

Electrical fixtures and materials

Electrical Generators

Farming Equipment & Supplies

Fishing Equipment & Supplies

Replacement Boats

Replacement Boat Engines

Manufacturing Equipment

Cots

Protective & Safety Gear

Household furniture, furnishings and appliances

Solar Panels

Mosquito netting

Plumbing fixtures and materials

Office Supplies & Equipment

Tents

Air Conditioning Units

Replacement Motor Vehicles

Replacement Golf Carts

Replacement Motor Cycles

 

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