Presentation Transcript

1. Beneby & CompanyChartered Accountants

   Preparing for The Bahamas Government Proposed Value Added Taxes (VAT)
2. What is Value Added Tax (VAT) The Government of The Commonwealth of The Bahamas has announced that it will be introducing a Value Added Tax (VAT) regime next year July 2014. Value Added Tax is basically a tax that is added to each process in the business cycle, with the end user having to pay the tax. This starts from the initial purchase of an item to the final sale of such item.
3. Who Must Register for VAT Businesses with annual sales or turnover of $100,000 plus ($50,000 for hotels and commercial property for lease), except those that are given exempt status. Products or services offered to entities or persons who are not normally resident in the Bahamas are “Zero rated” for VAT purposes.
4. Locally Purchased Items Items purchased from a local supplier will be charged VAT on top of what was paid for the item.
5. Internationally Purchased Items Items purchased overseas, will be assessed VAT when custom duties are paid.
6. Service Providers Service providers such as attorneys, accountants, architects, engineers, consultants, insurance services and others, once the threshold of $100,000 of annual billings is met, have to also be registered.
7. VAT Administration The catch to the proposed VAT system is that you have to be current in your Business License and register as a VAT agent with the Central Revenue Agency (CRA). You will be required to submit new VAT reports to the CRA, electronically on a monthly basis, to support your VAT claims or refunds. At this time we are not sure what format and frequency this will be.
8. Types of Record Keeping Accounting records must be reliable and in English and able to capture sales and receipts, purchases and VAT (input and output) for a period of seven years. A taxable person must maintain records by electronic means including but not limited to the use of: Such electronic tills or point of sale systems as may be approved by the VAT commissioner Computerized accounting systems as approved by the VAT Commissioner.
9. Mandatory Record Keeping and Accounts Accounting records must as applicable, include: Tax accounts; Purchase and sales ledgers; Invoices, whether or not they are VAT invoices, for acquisitions of goods or services by the person; Copies of invoices, whether or not they are VAT invoices, issued for supplies of goods or services made by person; Records of any VAT invoices for which the recipient of supply requested a copy to be issued; Tax debit notes and tax credit notes issued and received; Income and expense accounts;till rolls, audit rolls and tapes or similar records;
10. Mandatory Record Keeping and Accounts Bank statements; Customs documentation relating to imports and exports made by the person; Sales invoices and sales receipts, whether or not they are VAT sales receipts; Records relating to the supply of goods or services to officers, directors and employees, whether or not the supplies were made for consideration; Accounting instruction manuals, systems, software and relevant documentation in use to describe the accounting system; and Any other records related to the taxable activity, such as bookings, diaries, correspondence, computer print-outs, audit reports, contracts, or any other accounts or records in any way related to the person’s taxable activity.
11. How Does This Affect You? Clients using our on-line accounting services will experience little or no changes to the software, as we will make the required adjustments to your software or chart of accounts to deal with the VAT. Those of you using other accounting software such as QuickBooks, if you require we will need to set up/adjust your chart of accounts to deal with the VAT. Clients not using any computer software would need to consider installing one.
12. For More Information If you need further assistance please give us a call at 341-5475/6 or you can email us at benebyandcompany@coralwave.com.