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
- April 2026 Rate Transition: April 1, 2026 (upcoming)
April 2026 Transition
The April 2026 rate transition may affect how transactions near the transition date are categorized. CoralLedger Comply includes guidance for transactions near this date.