Further Guidance From Bahamas On VAT Implementation The Bahamas Ministry of Finance has said that businesses will not be required to provide a tax identification number when applying to be covered by the value-added tax transitional virtual warehouse arrangement for commercial importers, applications for which must be submitted by October 15, 2014. The Bahamas Government recently said that it will allow VAT-registered businesses to take advantage of a reduction in customs duties for existing inventory. With a bond in place during the months of November and December, VAT registrants will be allowed concessionary treatment for imported items, which will be entitled to reduced duty rates from January 1, 2015 – the date on which the Bahamas is to introduce value-added tax. Businesses will have to report sales of inventories made before December 31, 2014, and pay duty on items sold at the current rates that are in effect. Bonded items which remain in inventory after December 31, 2014, will benefit from the lower rates taking effect on January 1, 2015. Remaining stocks will, however, also be subject to VAT. Merchants have until February 28, 2015, to pay both the duty and VAT. The Ministry of Finance has now clarified that in order to make the applications, businesses will not be required to provide a taxpayer identification number, as this information will be requested by the Customs Department afterwards. The Ministrys statement comes after some firms signaled concerns about not being able to complete applications until they had registered for VAT and had been assigned a TIN. A spokesperson for the Ministry said: We know who all of the large VAT registrants will be. Their enrollment for VAT will be a matter of formality. Customs is likewise familiar with the large importers who are destined to become registrants. The Government began working with businesses from September 26, 2014, to ensure they have the necessary information to register in October. In a separate statement, the Government noted the requirement under the VAT Act for VAT registrants to display VAT-inclusive prices. The Bahamas Ministry of Finance has said that there will be some leniency with regards to pricing during the early days of VAT implementation, after retail businesses voiced concerns about the challenges of immediately changing pricing on January 1, 2014. The legal requirement for VAT registrants to issue proper customer receipts will be enforced from the beginning of the year, the Ministry said. Updated VAT guidance notes are due to be released in the middle of October, the Ministry disclosed.
Posted on: Tue, 07 Oct 2014 03:35:17 +0000
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