The Government of Barbados determined that indirect taxation of the tourism industry would be brought into alignment with the other sectors of the economy by implemented the following levies:
- Room rate levy – July 1st, 2018
- Tourism product levy – July 1st, 2018
- Shared accommodation levy – October 1st, 2018
Prior to the implementation of the levies, the accommodation sector was subject to VAT at 7.5% and there were no indirect taxes levied on shared accommodation. These levies will be increased annually but will be ultimately phased out when the standard rate on accommodation is equalized at the same rate imposed for general taxable activities.
The levies are as follows:
Category Rate
Apartments $8.75 per bedroom per night
Guesthouse $8.75 per bedroom per night
Class ‘B’ hotel $8.75 per bedroom per night
Class ‘A’ hotel $19.25 per bedroom per night
Luxury hotel $35.00 per bedroom per night
Vacation rental property 3.75% of the room rate up to a maximum of $35.00 per bedroom per night
Tourism product levy 3.75% of the taxable service supplied
Shared accommodation levy 10% of room rate