background image
8.2.1. Withholding Taxes

The withholding tax rates levied on income received/derived by the non-residents from sources within Barbados unless reduced under a tax treaty are as below.

Dividend

Tax is withheld at the rate of 5% (reduced from 15% effective from 1 January 2019) from gross dividends distributed to non-residents.

Dividends are exempt from withholding tax under domestic tax law if they are:

  • Paid by International Business Companies (IBCs), International Societies with Restricted Liability (ISRLs) or International Banks (see Sec. 10.1.);
  • Paid by Exempt (Captive) Insurance Companies and qualifying insurance companies (this exemption has been removed effective from 1 January 2019, see Sec. 10.1.); or
  • Paid out of income earned from foreign sources.

The tax on dividends paid out of tax-exempt profits is withheld at the rate of 25% on the gross amount.

Interest

Effective 1 April 2019, interest paid to a non-resident is not subject to withholding tax in Barbados.

Previously, the tax was withheld at the rate of 15% from gross interest paid to non-residents, and the interest payments were exempt from withholding tax if they were paid by:

  • IBCs, ISRLs, or International Banks (see Sec. 10.1.); or
  • Exempt (Captive) Insurance Companies (this exemption has been removed effective from 1 January 2019, see Sec. 10.1.).

Royalty Copyright

Effective 1 April 2019, royalties paid to non-residents are not subject to withholding tax in Barbados. Previously, the tax was withheld at the rate of 15% from gross royalties paid to non-residents unless paid by an IBC or an ISRL (see Sec. 10.1.).

Royalty Patent

Effective 1 April 2019, royalties paid to non-residents are not subject to withholding tax in Barbados. Previously, the tax was withheld at the rate of 15% from gross royalties paid to non-residents unless paid by an IBC or an ISRL (see Sec. 10.1.).

Royalty Trademark

Effective 1 April 2019, royalties paid to non-residents are not subject to withholding tax in Barbados. Previously, the tax was withheld at the rate of 15% from gross royalties paid to non-residents unless paid by an IBC or an ISRL (see Sec. 10.1.).

Service Management

Effective 1 April 2019, payments made to non-residents for providing management services are not subject to withholding tax in Barbados. Previously, the tax was withheld at the rate of 15% on payments made by a Barbados resident for management services performed in Barbados by a non-resident without a Barbados permanent establishment, unless paid by an IBC or an ISRL (see Sec. 10.1.).

Service Technical

Effective 1 April 2019, technical service fees paid to non-residents are not subject to withholding tax in Barbados. Previously, tax was withheld at the rate of 15% on payments made by a Barbados resident for technical services performed in Barbados by a non-resident without a Barbados permanent establishment unless paid by an IBC or an ISRL (see Sec. 10.1.).

Below is a discussion of domestic withholding tax rules for most of the common cross border payments.

Capital Gains 0.0 %
Dividends 5.0 %
Interest 0.0 %
Royalty Copyright 0.0 %
Royalty Patent 0.0 %
Royalty Trademark 0.0 %
Sales 0.0 %
Service Management 0.0 %
Service Technical 0.0 %

* Rates are current as of 18 September 2022