Split payments of VAT to combat fraud
The Caribbean islands state of the Bahamas has imposed Withholding VAT on payments by certain government bodies to commercial taxpayers. The aim is to combat VAT fraud by requiring public customers to split some of the VAT element on their purchase invoices, and remit this directly to the Inland Revenue.
Only transactions above US$10,000 are included. And the public body is required to hold 40% of the VAT due for any building, construction, repairs or maintenance of capital goods. The standard VAT rate in the Bahamas is 10% after being reduced from 12% at the start of this year.
The split payments requirement applies to the following Ministries from 1 August 2022:
- Works and Utilities;
- Public Service; and
- Education.
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