VAT Rates Reference
Current VAT rates under The Bahamas VAT Act 2014 and 2025 reforms.
Rate Summary
| Rate | Name | Application |
|---|---|---|
| 10% | Standard | Default rate for taxable supplies |
| 5% | Reduced | Breadbasket items at licensed food stores |
| 0% | Zero-Rated | Exports and specific supplies |
| N/A | Exempt | Excluded from VAT system |
Standard Rate (10%)
The default rate applies to most goods and services including:
- Retail goods
- Professional services
- Restaurants and food service
- Entertainment
- Construction services
- Most business services
Reduced Rate (5%)
The 5% reduced rate applies to breadbasket items sold by licensed food stores only.
Qualifying Items
- Bread and bread products
- Rice
- Grits
- Flour
- Sugar
- Cooking oil
- Milk (fresh and powdered)
- Baby formula
- Corned beef
- Sardines
- Certain fruits and vegetables
Requirements
- Must be sold by a business with a valid food store license
- Must be breadbasket items as defined by the Comptroller
- Regular retail sales only (not food service)
License Required
The 5% rate only applies if your business has a current food store license from the Ministry of Health.
Zero-Rated (0%)
Zero-rated supplies charge 0% VAT but allow input VAT recovery.
Zero-Rated Categories
- Exports of goods
- International transportation services
- Services to non-residents
- Inter-island shipping
- Certain financial services
Exempt Supplies
Exempt supplies are outside the VAT system entirely. No VAT is charged and no input VAT can be claimed.
Exempt Categories
- Financial services (banking, insurance)
- Educational services
- Medical and healthcare services
- Residential rent
- Certain government services
Input VAT Recovery
| Supply Type | VAT Charged | Input Recovery |
|---|---|---|
| Standard (10%) | Yes | Yes |
| Reduced (5%) | Yes | Yes |
| Zero-Rated (0%) | No | Yes |
| Exempt | No | No |
Effective Dates
- Original VAT Act: January 1, 2015
- Rate Increase to 12%: July 1, 2018
- Rate Reduction to 10%: January 1, 2022
- 2025 Reforms: January 1, 2025