Start with the type of charge, not a headline corporation-tax rate
An ordinary business outside the domestic minimum top-up tax does not face a general conventional corporation tax on net profit. But the business licence regime can charge turnover, and particular financial activities have their own schedules. VAT, payroll National Insurance, property tax and substance reporting sit alongside those obligations.
A low-margin business can therefore have a materially different effective burden from a high-margin business with the same sales. Model the actual revenue classification before comparing this jurisdiction with a country that taxes net profit.
Ordinary business licence tax: turnover is the base
These are the ordinary schedule categories for businesses for which no special schedule applies. The percentage attaches to turnover in the applicable category; it is not an income-tax-style marginal band applied only to the slice above the threshold. From July 2026 the top ordinary category changes for turnover exceeding BSD 175m.
The exemption for turnover no greater than BSD 100,000 does not extend to every entity. The 2024 Act excludes family offices, financial services entities, international business companies and proprietary-trading businesses from that exemption.
| Ordinary annual turnover category | Rate / scope |
|---|---|
| Up to BSD 100,000 | Exemption subject to the stated activity/entity exclusions |
| Above BSD 100,000 to BSD 500,000 | 0.5% of turnover |
| Above BSD 500,000 to BSD 5m | 0.75% of turnover |
| Above BSD 5m to BSD 175m | 1.25% of turnover |
| Above BSD 175m | 1.5% of turnover under the July 2026 amendment |
Why the same turnover can produce a different planning result
At BSD 1m ordinary annual turnover, a 0.75% business licence charge is BSD 7,500. If accounting profit were BSD 100,000, that charge alone would equal 7.5% of that profit; at BSD 500,000 profit it would equal 1.5%. These are illustrations of turnover tax, not additional statutory profit-tax rates.
Operating through an international business company does not automatically move every receipt into an offshore category. The legislation distinguishes activities performed in and outside The Bahamas and contains deeming rules. Customer location, invoice currency and incorporation alone do not answer that question.
International business companies and specialised activities
For the international business-company outside-activity category, the published schedule provides BSD 2,500 where the relevant revenue does not exceed BSD 1m, and 0.25% above that threshold subject to a BSD 100,000 cap. Revenue attributable to local activities is assessed under the local treatment instead.
The statutory attribution rules matter to a founder working from Nassau for overseas clients. Local professional services, Bahamian property and specified local transactions cannot simply be labelled offshore because the payer is foreign. Family-office and proprietary-trading schedules also differ from an ordinary trading company.
| Issue | What it means |
|---|---|
| International business company | Identify the income-producing activities and the statutory allocation before using the outside-activity schedule. |
| Family office | Special schedule: greater of BSD 10,000 or 0.25% of turnover, capped at BSD 100,000. |
| Proprietary trading | Special schedule: greater of BSD 15,000 or 0.25% of turnover, capped at BSD 100,000. |
| Regulated financial business | Use its specific licence and levy schedule; an ordinary trading-company illustration is not sufficient. |
The 15% domestic minimum top-up tax is a separate large-group regime
The DMTT is directed at constituent entities of multinational groups meeting the EUR 750m consolidated-revenue threshold in at least two of the preceding four fiscal years. Its 15% minimum concerns the GloBE effective-tax framework and top-up calculation; it is not a flat 15% charge on every Bahamian company’s turnover or accounting profit.
The core Act applies from 2024 with a specific condition for fiscal years beginning before 2025 linked to a qualifying foreign IIR or UTPR. The legislation and 2026 administrative material must be read together for an affected group. The guide deliberately does not recycle the changing transitional filing and payment dates as future deadlines.
| Issue | What it means |
|---|---|
| Scope test | Group revenue, multinational status, constituent-entity and excluded-entity analysis |
| Calculation | Covered taxes, GloBE income, elections and relevant exclusions; ordinary accounts alone are not the complete return |
| Administration | Business identification, tax-representative registration, DMTT registration and the current return workflow |
| Business licence interaction | The 2025 amendment provides a DMTT credit mechanism; do not assume it removes licensing or every remaining payment |
| Deadline control | Use the currently applicable consolidated law and DIR notice for the exact fiscal year. The 2026 guide includes transitional dates that have already passed. |
Economic substance depends on the activity
CESRA reporting and substance are separate from the absence of a general corporation tax. Legal entities within the reporting framework must establish their classification. An included entity conducting a relevant activity generally needs core income-generating activities in The Bahamas, direction and management here, and adequate people, expenditure and premises.
A pure equity holding entity has a reduced test rather than the full directed-and-managed test. High-risk intellectual-property activity has enhanced requirements. These distinctions make it unhelpful to sell a single “substance package” without knowing the entity’s actual activity.
| Issue | What it means |
|---|---|
| Reporting entity | Reporting can remain necessary even where a substance exemption or a different category applies. |
| Ordinary included relevant activity | Substantive decision-making, local core activities and adequate resources must match the income. |
| Pure equity holding | Reduced requirements; corporate compliance and adequate resources/premises remain relevant. |
| Claimed foreign tax residence | Support it with the required evidence of actual foreign corporate taxation; a foreign address alone does not establish the exclusion. |
| Timing | Guidelines describe reporting within nine months of the fiscal year end through the applicable reporting channel. |
Management, CFC rules and cross-border payments
A Bahamian entity can still be exposed to foreign management-and-control, permanent-establishment or CFC rules. CESRA’s local direction-and-management requirement should not be mistaken for a conventional general Bahamian corporate-residence tax test, nor for proof that another country has surrendered its taxing rights.
No general conventional Bahamian dividend, interest or royalty income-tax withholding is identified in the ordinary company system. This does not make an outward payment cost-free: business licence, VAT classification, exchange-control permission and taxation of the recipient are separate. For an in-scope multinational, the payment may also affect the GloBE computation.
Running the business: payroll, evidence and returns
Ordinary employee National Insurance is 4.65% and the employer’s own contribution is 6.65%, with the July 2026 insurable earnings ceilings. Paid leave, working-time and termination obligations add to the employment budget. A foreign owner working in the business must also hold the appropriate permission.
Business licence turnover must be supported by records; the regulations impose independent review or audit requirements at specified turnover levels. Keep separate calendars for licence renewal and payment, VAT where registered, NIB remittance, CESRA and any DMTT obligation. A company can be compliant with its registered-agent invoice while still missing one of these duties.
Sources & research notes16 references
Sources supporting this guide. Research draft awaiting editorial review.
- Business Licence Act 2023
- Business Licence (Amendment) Act 2024
- Domestic Minimum Top-Up Tax Act 2024
- Department of Inland Revenue — About VAT
- Business Licence (Amendment) Act 2026, No. 22
- Department of Inland Revenue — One Tax Bahamas guide, June 2026
- Department of Inland Revenue — DMTT return guide, September 2026
- Ministry of Finance — CESRA guidelines v1.2, 16 October 2025
- The Bahamas — tax identification/residence information supplied to the OECD
- Central Bank — operation of local foreign-currency accounts by resident entities, 31 March 2026
- National Insurance Board — contribution rates and employee categories
- National Insurance Board — 2026 biennial adjustment to the insurable wage ceiling
- Employment Act — hours, leave and employment obligations
- Immigration Department — annual work permit
- Business Licence Regulations 2023
- National Insurance Board — employers