Business Licence changes | KPMG | BS

Bahamas Business Licence changes

Business Licence changes

The May 2015 National Budget announced targeted tax reform and modernization measures focused on Customs, Business Licence and Real Property Tax.

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The May 2015 National Budget announced targeted tax reform and modernization measures focused on Customs, Business Licence and Real Property Tax. With this modernization, the Government of The Bahamas announced a reduction in the maximum rate for business licence fees from 1.75 per cent of turnover to 1.5 per cent, as well as reductions in rates for agriculture and fisheries operated businesses and for independent fuel distributors in the Family Islands.In addition to these rate reductions, certain administrative amendments were announced including:

  • New $100,000 threshold for mandatory certification by an independent accountant
  • New penalties
  • Mandatory calendar year reporting requirements

New $100,000 threshold

Effective July 2015, businesses that have a turnover of one hundred thousand dollars per annum or more, must submit financial results accompanied by a statement as to the turnover of the business certified by a qualified accountant who has no interest in the business to which the certificate relates.

To avoid processing delays, businesses falling in this category must ensure that certifications accompany their 2016 business licence renewal application.

Penalties for late filing and payment

Fines and penalties are also now being imposed as a result of last year’s amendments to the Business Licence Act.

  • $100 for late filing and late notification of inactivation or cessation of business
  • 10 per cent of the tax liability for late payment.

The deadline for filing business licence renewal applications is now January 31 and the deadline for the payment of taxes is March 31. To avoid fines and penalties, businesses should ensure that they submit their renewal applications on or before January 31, 2016 and pay by March 31, 2016.

Online payments

You can now renew your business licence online. Renewal applications commenced online as of January 1, 2016.

There are several ways to pay when applying for or renewing your business licence using the Online TaxAdministration System (OTAS). It is important to ensure that your payments are being made with respect to Business Licence and not Value Added Tax (VAT).

Mandatory calendar year reporting

While most businesses file their business licence renewal based on the calendar year, this has not always been enforced. Therefore, businesses that have used other year ends for business licence renewals must now conform to the calendar year reporting requirement as of January 1, 2016.

© 2017 KPMG Advisory Services Ltd., a Bahamian limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The information contained herein is of general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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