|Frequently Asked Questions|
|1. What Is Income Tax and why is it payable?|
|2. Can I deduct my National Insurance Contributions?|
|3. Are the National Insurance Contributions of a self employed person tax deductible?|
|4. What are the deductions I may claim under Home Allowance?|
|5. If I am employed full-time with one company and work part-time somewhere else must I declare the part-time income?|
|6. Is Car allowance taxable|
|7. If I have to pay Income Tax, do I have to pay all one time?|
|8. In what order are returns processed?|
|9. How and when do penalty and interest charges apply and what are the rates?|
|10. On what portion of my salary or wage do I have to pay tax?|
|11. What are the current Income Tax and Corporation Tax rates?|
|12. How can I query an incorrect (a) assessment or (b) reassessment?|
|13. Can I submit copies of receipts and other vouchers to substantiate claims made to the Inland Revenue Department?|
|14. Can I claim for my spouse if he/she has filed a Reverse Tax Credit Return?|
|15. If I do not pay my income tax, what can the Department do about it?|
|16. Which of the benefits paid by National Insurance & Social Security Scheme are taxable?|
|17. If my total earnings for the year is less than my basic personal allowance of $25 000 am I required to file an Income Tax Return?|
|18. I am a self-employed person who has a small business that made a loss last year, am I required to file a tax return?|
|19. Who is entitled to claim a personal allowance of $40 000?|
|20. Do I still have to file a tax return even though my pension and rental income total less than my basic allowance of $40 000?|
|21. When is a person entitled to claim a spouse allowance?|
|22. What if my spouse has exempt income, am I entitled to claim the spousal allowance?|
|23. Will the Department provide held in completing and filing individual Income Tax Returns?|
|24. My bank sent me a slip showing the interest I earned and a 12.5% tax deduction, do I include this on my tax return?|
|25. I received an additional wages slip after I filed my return. Do I file another return with this information?|
|26. Am I entitled to a rent deduction on my tax return?|
|27. I have not filed returns for five years or more can I still file the relevant returns and will I be penalised for my delinquency?|
© 2008 Department of Inland Revenue, Treasury Building, Bridge Street, Bridgetown, Barbados
all rights reserved.
|Income tax was first introduced in Barbados in 1921. In 1969 a new act with regulations took effect. These, as amended overtime, are still enforce in the form of the Income Tax Act Cap. 73, Laws of Barbados. Income Tax is a tax on the income of a person derived from all sources including:|
|Through the imposition of Income Tax, government raises revenue that would enable it to carry out its social, financial and economic programmes aimed at improving the lives and well being of all its citizens and to sustain and maintain the country's viability.|
|Full car benefit is taxable.|
|For Individuals/Employees - with income of less than 25% from business, half of the tax due is payable on or before the 30th April and the balance on or before the 30th September. Failure to pay, will attract penalties and interest.|
|Individuals with income from business/property. (Self-employed Persons) - partners and individuals with more than 25% of income from business, prepayment must be made on or before June 15th, September 15th and December 15th with the balance payable on or before 30th April. Prepayments are calculated based on the previous year's tax payable or may be determined by the Commissioner of Inland Revenue on request.|
No, National Insurance Contributions deducted from the wages or salary of an employees are not allowable for income tax purposes. An employer however, may claim as a deduction that portion of National Insurance Contributions which that employer paid on behalf of an employee.
As with an employee, the National Insurance Contributions of a self-employed person are not tax deductible.
Under "Home Allowance" an individual who owns and wholly occupies a residental property, may claim a deduction from his/her assessable imcome an amount not exceeding $10, 000.00 for expenses incurred jointly or severally in respect of mortgage interest, insurance premiums, house repairs, renovations, energy saving or water saving devices, a home energy audit or materials recommended in that audit.N.B. Claim for home energy audit or materials recommended in that audit is limited to $2,000.00 within the amount allowed as "Home Allowance".
|If I am employed full-time with one company and work part-time somewhere else must I declare the part-time income?|
Yes. The income of a person is his income from all sources, business, property. offices and employment, whether within or outside of Barbados. This includes bonuses, commissions, plus the value of all other benefits, whether in money or otherwise, including quarters, board or residence, received or enjoyed in that income year in respect of that office or employment.
Returns are processed on a first-come first-served basis.
(i) $100.00 and
(ii) 5% of tax assessed, are applied for failure to estimate tax payable or to deliver a return on or before April 30th
|(b) A penalty of 5% of tax estimated or $10.00 which ever is the greater, is applied for failure to pay tax estimated.|
|(c) A 100% penalty is applied for tax evasion.|
|(d) Interest of 1% per month is applied to tax and penalty.|
|Under the Pay As You Earn System (P. A. Y. E) Tax is deductible from salaries and wages that exceed amounts set out below:|
|Year 2004||Year 2005|
|1. $1,459.00 per month or over||1. $1,667.00 per month or over|
|2. $337.00 per week or over||2. $385.00 per week or over|
|3. $48 per day or over.||3. $55.00 per day or over|
|Year 2006||Year 2007 and subsequent years|
|1. $1,875.00 per month or over||1. $2,083.00 per month or over|
|2. $433.00 per week or over||2. $481.00 per week or over|
|3. $62.00 per day or over||3. $68.00 per day or over|
|The Individual Income
Tax Rate for income year 2009 and subsequent years is:
. 20% on the first $24,200.00 of taxable income
. 35% on the taxable income in excess of $24,200.00
The Corporation Tax Rate is:
|(a) If you dispute an assessment, you may object in writing or on-line to the Commissioner of Inland Revenue within twenty-one days of receiving the Notice of Assessment, stating the precise ground (s) of your objection.|
(b) If you are not satisfied by the decision of the Commissioner of Inland Revenue, you may appeal to the Income Tax Appeals Board and you may seek further recourse to the High Court.
|Can I submit copies of receipts and other vouchers to substantiate claims made to the Inland Revenue Department?|
Only original receipts are accepted.
No. An individual may not claim a spouse allowance for a spouse, who has filed a Reverse Tax Credit Return.
(Section 71) Failure to pay taxes, interest, penalties, costs and other amount payable under this Act which are debts to the Crown and recoverable as such in civil proceedings in the High Court or in the Magistrates Court of District A at the option of the Crown.
Sickness, Maternity and Unemployment Benefits are taxable.
|If my total earnings for the year is less than my basic personal allowance of $25 000 am I required to file an Income Tax Return?|
No. Under those circumstances you are not required to file a return. However, if income tax was deducted from your earnings, then you should file a return in order to be refunded the tax which was deducted.
|I am a self-employed person who has a small business that made a loss last year am I required to file a tax return?|
Yes. You are still required to file a return. This loss may then be carried forward to be set off against future profits.
A person who is sixty (60) years and over and receives a pension.
|Do I still have to file a tax return even though my pension and, rental income total less than my basic allowance of $40 O00?|
Yes. Rental income is
from a business source, hence you are required to file a
A person may claim a spouse allowance when his or her spouse has NO income from any source or has investment income only of $800 or less.
No. An individual whose spouse has exempt income is disqualified from claiming a spouse allowance
Yes. Our Customer Care Division offers year round assistance to employees in the completion of their tax return forms. However, this assistance is not offered to self employed persons whose income has to be determined.
|My bank sent me a slip showing the interest I earned with a 12.5% tax deduction, do I include this on my tax return?|
No. The 12.5% tax deduction is a final tax, which fully satisfies the tax liability on the interest. Hence you are not required to include it in your assessable income.
|I received an additional wages slip after I filed my return. Do I file another return with this information?|
No. You are only required to file one tax return for the relevant year. The additional information whether a wages slip, receipt of expenditure or any other vital information may be forwarded to the Department with a covering letter or note giving your name, current address and national registration number (N. R. N) and it will be included on your filed return
Yes. With effect from income year 2006, tenants may claim a rent deduction up to a maxium of $3,000 or 20% of the rent paid, whichever is the lesser amount. This claim must be supported by a "Certificate of Rent Paid" issused by the landlord.
|I have not filed returns for five years or more can I still file the relevant returns and will I be penalised for my delinquency?|
Yes. You should still file your outstanding prior year returns.