2025 VAT Reforms
The Bahamas implemented significant VAT reforms effective July 2025. CoralLedger Comply fully supports these changes.
Key Changes
Multi-Rate VAT System
The Bahamas now operates a three-tier VAT system:
| Rate | Application |
|---|---|
| 10% | Standard rate for most goods and services |
| 5% | Reduced rate for electricity, water, and select essentials |
| 0% | Zero-rated for exports, basic food items, and medicines |
Construction VAT Restrictions
New rules for construction projects exceeding $1 million:
What Changed:
- Input VAT on construction materials may be restricted
- Developer exemptions have specific qualification criteria
- Project value tracking is now required
How Comply Helps:
- Track project values against the $1M threshold
- Monitor input VAT restrictions automatically
- Generate compliance reports for construction projects
Access the Construction VAT dashboard at Compliance > Construction VAT.
Refund Eligibility (50% Rule)
New requirements for VAT refund claims:
The Rule: To claim a VAT refund, at least 50% of your taxable supplies must be zero-rated.
How It Works:
- Calculate total zero-rated supplies
- Calculate total taxable supplies
- If zero-rated >= 50% of taxable, you can claim refunds
- If below 50%, excess input VAT carries forward
Comply Features:
- Real-time eligibility tracking
- Period-by-period analysis
- Automatic threshold monitoring
- Refund calculation assistance
Access at Compliance > Refund Eligibility.
Food Store Qualification (April 2025)
Licensed food stores have specific VAT treatment:
Requirements:
- Valid food store license
- Proper product categorization
- Accurate record-keeping
Qualify at:
- Navigate to Admin > Vendor Qualification
- Upload license documentation
- Maintain qualification status
Bad Debt Relief (12-Month Rule)
Claim relief on bad debts after 12 months:
Eligibility:
- Debt must be at least 12 months overdue
- VAT was originally paid to the government
- Reasonable collection efforts were made
- Debt is written off in your books
How to Claim:
- Go to Compliance > Bad Debt
- Review eligible debts
- Calculate relief amount
- Include in your next return
Compliance Dashboards
CoralLedger Comply includes dedicated dashboards for each 2025 reform:
| Dashboard | Location | Purpose |
|---|---|---|
| Construction VAT | Compliance > Construction VAT | $1M threshold tracking |
| Refund Eligibility | Compliance > Refund Eligibility | 50% rule monitoring |
| Bad Debt Relief | Compliance > Bad Debt | 12-month tracking |
| Tax Savings | Compliance > Tax Savings | Recovery opportunities |
Staying Compliant
Best Practices
- Update your categories - Ensure transactions use correct 2025 rates
- Track construction projects - Monitor against the $1M threshold
- Review refund eligibility - Check monthly if you have significant zero-rated sales
- Document bad debts - Maintain proper records for relief claims
Important Dates
- July 2025 - Multi-rate system effective
- April 2025 - Food store qualification rules
- April 2026 - Next major compliance update
Need Help?
The 2025 reforms are complex. Contact us for assistance:
- Email: support@coralledger.com
- Phone: Schedule a consultation