Withholding Tax for Payments to Residents and Non-Residents

Barbados has a comprehensive range of withholding taxes that are payable on remittances to non-residents as well as to residents in some cases. These withholding taxes are either final taxes or prepayments of the taxpayer tax obligation.

In the case of non-residents, withholding taxes collected in Barbados may be deductible against their worldwide income in the jurisdiction where they are tax resident.

Final Payments

The tax withheld from the following sources of income is a final tax:

  • Gross Earnings of non-resident Entertainers on performance in Barbados – 25%
  • Interest paid to a non-resident by a Barbadian taxpayer on borrowed money – 15%
  • Royalties paid on franchise fees, software support, copyright, and similar agreements – 15%
  • Dividends on earnings to from businesses which have been taxed in Barbados – 15%
  • Profits remittances by branches resident in Barbados to their controlling entity –  10%

Payment for services

  • Managerial, Technical, Administrative. 15%
  • Other. 25%

Prepayments

Tax withheld from the following sources represents a prepayment of tax:

  • Rents. 40%
  • In respect of income year 2004 – 33%
  • In respect of income year 2005 – 30%
  • In respect of income year 2006 and subsequent years – 25%
  • Payments under settlement or trust 20%
  • Covenants. 20%

Dividends

  • Exempt profits 40%
  • Untaxed profits 40%