This Bahamas tax guide covers the rules in force from 1 January 2026. There is no personal income tax, no capital gains tax, no inheritance tax and no wealth tax — the state funds itself through 10% VAT, import and excise duties, property tax, National Insurance and a turnover-based business licence fee. The Bahamian dollar is pegged 1:1 to the US dollar, so every figure below reads the same in USD. The big recent change: a 15% Domestic Minimum Top-up Tax on €750m+ multinational groups, effective retroactively from 1 January 2024.
Introduction
The Bahamas is an archipelago of 700 islands beginning 80 km off the Florida coast, an English-speaking parliamentary democracy and Commonwealth member independent from Britain since 1973, with a common-law legal system and appeals to the Privy Council. Nassau, on New Providence, holds two-thirds of the ~400,000 population and one of the western hemisphere’s oldest offshore financial centres. The climate is subtropical, the lifestyle is boating-and-beach with direct flights to most US East Coast hubs, and the cost of living is high — most goods are imported through the very duty structure that replaces income taxation. The Bahamian dollar (B$) has been pegged 1:1 to the US dollar since 1973, so USD circulates interchangeably.
For internationally-mobile investors, this Bahamas tax guide matters because the jurisdiction has never levied a personal or general corporate income tax — there is nothing to elect into, no regime to qualify for, and no sunset to watch. Consumption, property and payroll levies do the fiscal work. The one structural novelty is the Domestic Minimum Top-up Tax Act 2024 (enacted 29 November 2024, effective retroactively for fiscal years from 1 January 2024), which brings the largest multinational groups to the OECD’s 15% floor while leaving everyone else untouched.
Direct Taxes
There is no residence-versus-source debate in the Bahamas because there is no income tax at all — resident or not, Bahamian-source or foreign, employment or investment income is simply not taxed. No progressivity exists because there are no bands. Companies pay no tax on profits either; instead every business pays an annual business licence fee on turnover — the key concept for operators — and, from 2024, in-scope multinationals pay the 15% DMTT. What substitutes for payroll tax is National Insurance (NIB), and what substitutes for a tax return is, for most residents, nothing.
Personal income tax (2026 bands)
| Chargeable income (B$ = US$, 1:1 peg) | Rate |
|---|---|
| All income, any amount, any source | 0% |
The 0% position is not a modern incentive — the Bahamas has funded itself through customs duties since colonial times and never introduced an income tax. There are no filings for individuals, no municipal income taxes, and no distinction between locals and expatriates. The practical “taxes” on a working resident are NIB contributions (capped, below) and 10% VAT on spending.
Corporate income tax
| Item | Rate |
|---|---|
| General corporate income tax | None (0%) |
| Domestic Minimum Top-up Tax — MNE groups ≥ €750m (~$855m) revenue, fiscal years from 1 Jan 2024 | 15% |
| Business licence fee — turnover ≤ B$50,000 (=US$50,000) | B$100 flat |
| Business licence fee — turnover B$50,001–500,000 | 0.5% of turnover |
| Business licence fee — turnover B$500,001–5m | 0.75% of turnover |
| Business licence fee — turnover > B$5m (=US$5m) | 1.25% of turnover |
| Withholding taxes on dividends, interest, royalties | None |
The DMTT (Act of 29 November 2024) implements OECD Pillar Two and is expected to raise ~B$140m (=US$140m) a year; entities paying it are relieved of, or credited against, business licence tax. Businesses with turnover of B$250,000 or less are currently exempt from the licence fee but must still file. Note the licence fee taxes revenue, not profit — at 1.25% it can exceed an income tax for thin-margin businesses. There are no withholding taxes and no double-tax treaties; the Bahamas relies on TIEAs and CRS for exchange of information.
Social security and health contributions
| Contribution | Employee | Employer | Self-employed |
|---|---|---|---|
| National Insurance (NIB), from 1 July 2024 | 4.65% | 6.65% | 10.3% |
| Prior rates (to 30 June 2024) | 3.9% | 5.9% | 8.8% |
Contributions apply only up to the insurable wage ceiling — B$810 (=US$810) per week / B$3,510 (=US$3,510) per month since 1 July 2024, with the next biennial ceiling adjustment legislated for 1 July 2026 (confirm the new ceiling when published). Above the cap, salary bears no charge, so the effective burden on high earners is trivial. A further scheduled rate rise is part of NIB’s sustainability plan — increases of 1.5 points are slated roughly every two years into the 2030s.
Indirect Taxes
With no income taxes, indirect taxation is the fiscal backbone: VAT (introduced 2015), customs and excise duties on nearly all imports, and transaction taxes on property. VAT follows a standard credit-invoice model administered by the Department of Inland Revenue.
Value-added tax (VAT)
| Rate | Applies to (examples) |
|---|---|
| 10% (standard, since 1 January 2022; previously 12%) | Most goods and services, including electricity and hotel stays |
| 0% (zero) | Exports, international transport, certain breadbasket food items and medicines |
| Exempt | Financial services (margin-based), residential rent, education |
| 2.5%–10% | Real-estate conveyances (see below) |
Excise and other indirect taxes
| Tax | Notes |
|---|---|
| Customs duties | Average ~30%+ on many imports — the historic revenue engine; wide rate spread by item |
| Excise duties | Vehicles, tobacco, petroleum |
| VAT on property conveyances | Replaced stamp duty: graduated 2.5%–10% for Bahamians; flat 10% for non-Bahamians |
| Stamp duty | Residual instruments (e.g. certain banking transactions) |
Other Taxes Worth Knowing
| Tax | Bahamas treatment |
|---|---|
| Capital gains tax | None |
| Dividends (resident individual) | 0% — no tax, no withholding |
| Interest (resident individual) | 0% |
| Rental income | No income tax; VAT registration required above B$100,000 turnover on commercial/short-term lets (confirm threshold) |
| Wealth / net worth tax | None |
| Inheritance / estate tax | None |
| Gift tax | None (conveyance VAT can apply to property transfers) |
| Real property tax (annual) — owner-occupied | First B$250,000 (=US$250,000) exempt; 0.625% to B$500,000; 1% above — annual cap B$120,000 (=US$120,000) |
| Real property tax — other/commercial | ~0.75%–2% depending on class and value |
| Exit tax | None |
Annual real property tax is the only recurring wealth-adjacent levy, and Family Island properties and Bahamian-owned unimproved land enjoy further exemptions. For a typical resident investor the complete picture is: 0% on income and gains, ~1% a year on an expensive home, 10% VAT on consumption, and a capped ~B$4,900 (=US$4,900) a year maximum in NIB across employee and employer combined.
Disadvantages & Risks
The Bahamas trades tax for cost and exposure. Living costs run 30–50% above US levels, import duties inflate everything from cars to groceries, and hurricanes are an existential rather than theoretical risk — Dorian (2019) caused damage equal to a quarter of GDP, and insurance premiums price that in. The economy is narrow — tourism and financial services — and public debt spiked after 2020, which is precisely why new levies like the DMTT and NIB increases keep arriving. Violent crime in Nassau is materially worse than in rival havens, even if gated communities and the Family Islands feel far removed.
Reputationally the picture is mixed but improving: the Bahamas exited the FATF grey list in December 2020 and was removed from the EU non-cooperative list on 20 February 2024, and is not currently on either list. The 2022 FTX collapse, headquartered in Nassau, bruised the digital-asset brand even though the DARE Act 2024 rebuilt the framework. Structural irritants remain: no double-tax treaties, so US or European withholding taxes on portfolio income are unrelievable; heavy-compliance banking; economic substance requirements (CESRA) for relevant entities; and immigration policy that keeps work permits scarce even as residence-by-investment is welcomed.
Strategy & Ideal Profile
There is little to structure — which is the point. Individuals simply become resident; there is no special regime to elect. Wealth stays in personal or trust ownership (Bahamian trusts and foundations are mature, and there is no forced heirship for foreigners), portfolios sit with local or foreign custodians tax-free, and an IBC costs only its licence fee. The classic package is the Permanent Residency by investment route: a real-estate purchase of at least B$1,000,000 (=US$1,000,000) qualifies an application, with accelerated handling above B$1.5m (confirm current thresholds with Immigration), and property purchase itself is the main tax event — 10% conveyance VAT for foreign buyers plus ~1% annual property tax above the exemptions. For those needing to evidence tax residence to a former home country, a tax residency certificate requires 90+ days of presence, fewer than 184 days in any other single country, and a substantial qualifying home.
Who it suits: investors and traders — no tax on gains, dividends or interest, ever, with no thresholds or holding periods; retirees and rentiers who want zero filings and USD-denominated life an hour from Florida; company owners post-exit who can realise and hold proceeds untaxed; crypto and fund principals who value the DARE 2024 framework and deep trust industry; and US citizens specifically — the peg, proximity and absence of local tax simplify life, though the IRS follows them regardless. Days-based residence rules are light: the annual residence card and homeowners card demand almost nothing, while the tax certificate route needs the 90-day pattern.
Who it does not suit: operating businesses with thin margins, for whom a 1.25% turnover levy can bite harder than an income tax, and anyone needing treaty relief — dividend streams from the US or Europe bear full source-country withholding. Anyone allergic to hurricane logistics, or needing a large skilled labour pool and cheap living, should look elsewhere. The 0% headline has no sunset — it has simply never existed to be repealed — but budget pressure means fees, NIB and property-adjacent charges will keep drifting up.
FAQ
Is the Bahamas a tax haven?
It is a genuinely no-income-tax jurisdiction, but a cooperative one: CRS automatic exchange, FATF-delisted since December 2020, removed from the EU non-cooperative list in February 2024, with economic-substance rules for relevant entities. Secrecy-era practices are gone; the 0% rates are simply the domestic system.
What is the corporate tax rate in the Bahamas in 2026?
0% for almost every company — there is no corporate income tax. Businesses pay an annual licence fee of 0.5%–1.25% of turnover (B$100 flat below B$50,000; exempt at or below B$250,000 turnover). Multinational groups with €750m+ global revenue pay the 15% Domestic Minimum Top-up Tax, effective from fiscal years starting 1 January 2024.
How does Bahamas permanent residency by investment work?
Purchasing residential property of at least B$1,000,000 (=US$1,000,000) supports an application for economic permanent residency, with accelerated consideration typically above B$1.5m — confirm current thresholds, which have risen over time. Permanent residency has no minimum-stay requirement; a separate tax residency certificate requires 90+ days of presence.
What is the 90-day rule in the Bahamas?
To obtain a Bahamian tax residency certificate — useful for demonstrating a tax home to foreign authorities — an applicant must spend at least 90 days a year in the Bahamas, not spend 184+ days in any other single country, and hold a qualifying residence.
Does the Bahamas tax capital gains?
No. There is no capital gains tax for individuals or companies, on securities, crypto or real estate. The tax cost of property investing is transactional instead: conveyance VAT of up to 10% on purchase and annual real property tax while you hold.
Is there inheritance or wealth tax in the Bahamas?
No. There is no inheritance or estate tax, no gift tax and no wealth tax. Estates transfer free of Bahamian tax, and the trust and foundation regime is built precisely for multigenerational planning.
How are dividends taxed for a Bahamas resident?
The Bahamas imposes no tax on dividends received and no withholding on payments. The practical cost is at source: with no double-tax treaties, US dividends, for example, bear the full 30% US withholding for non-US persons — an unavoidable leak that portfolio construction should account for.
Sources
All figures should be checked against the primary government sources below.
- Department of Inland Revenue (Ministry of Finance) — VAT, business licence, real property tax — inlandrevenue.finance.gov.bs
- Ministry of Finance / Government of The Bahamas — DMTT Act 2024 and budget communications — mof.gov.bs
- Office of the Prime Minister — DMTT policy paper (August 2024) — opm.gov.bs
- National Insurance Board of The Bahamas — contribution rates and insurable wage ceiling — nib-bahamas.com
- FATF — Bahamas delisting (December 2020) and listing status — fatf-gafi.org
The Bahamian dollar is pegged 1:1 to the US dollar, so all B$ figures equal the same amount in US$.
Last verified: 5 July 2026.
This is general information, not personal tax or legal advice. Tax outcomes depend on your specific facts; consult a qualified Bahamas tax adviser before acting.
Related guides: Andorra · Costa Rica · Cyprus · Georgia · Gibraltar · Indonesia · Italy · Jersey · Malta · Mauritius · Monaco · Montenegro · New Zealand · Panama · Paraguay · Seychelles · Singapore · Thailand · UAE · Uruguay