Belize Income Tax Rate

Belize personal income tax rate is a flat 25%. Belize personal income tax technically applies only to employed persons.

Threshold: If income from all sources combined is less than $20,000, you should not have paid income tax in Belize. If tax was deducted from your income you may claim a refund at the end of the year.

Deductions: Employees are allowed to deduct from their total income the following:

- Basic personal Relief: $19,600

- Charitable contributions: Charitable relief must be for contributions to cultural, educational or religious activities, or to charitable institutions, or for the improvement of facilities in towns and villages in Belize. Original receipts / acknowledgements must be submitted for the Commissioner to allow the claim. The minimum to be claimed is $250, and the maximum is 1/6 of the chargeable income after deducting the basic personal relief.

- Education Relief: You are allowed to claim for Contributions to the education of children who are not your own and who are attending school full-time.
. Claim limited to $400.00 per child
. Total claim under this heading limited to $1,600.00
. You may not claim for your own child ( this is covered under Basic Personal Relief).

Standard Tax Deduction

You are to deduct up to $100.00 from your tax payable. This is a credit given to all taxpayers which cancels the first $100.00 in tax. Please note: If your total tax payable is less than $100.00, the relief is limited to that amount.

Belize Corporate Tax

Belize Business tax is 25%.

Belize Business Tax is a tax on TOTAL REVENUES or RECEIPTS:
- Whether in cash or 'in kind'
- Whether received or accrued / credited of a 'Person' or Firm:
. Carrying on a trade or business which earns $75,000.00 or more per annum where such receipts are the only source of livelihood of the taxpayer
. Practicing his profession or vocation, earning $20,000.00 or more per annum where such receipts are the only source of livelihood of the taxpayer
. Engaged in the business of investment or earnings from real or personal property
. Engaged in the provision of personal services, including Tour Operators, Travel Agents and other Commission Agents

without any deduction except for specific relief granted under the Business Tax Act of Belize.

Who should pay Business Tax?

Business Tax is payable by any person practicing his profession, or firm carrying on business IN BELIZE, and includes:
- Individuals
- Partnerships
- Companies / Corporations
- Consultants, both Local (Resident) and Foreign (Non Resident) and any other 'person' who is in the business of providing goods and services.

Who should not pay (or is exempt from) Business Tax? What income is exempt?

The Business Tax does NOT apply to:

- Employees, on their employment income. 'Employees' include consultants who work for their employers for periods adding up to sixty days 60) or more in the year.
- Receipts of Export Processing Zone businesses
- Winnings from Boledo and Jackpot Lottery, or any other lottery where the winnings is less than $1500.00, and from slot machines and table games of less than $1,000.
- Interest from any notes or bonds issued by the Government of Belize
- Rental receipts of less than $800 per month where rents form the only 'source of livelihood of the taxpayer'.
- Receipts that are not the proceeds from a trade or business carried on by the following organisations:
. Credit Unions
. Charitable Institutions of a Public Character
. Educational Institutions of a Public Character
. Friendly Societies
. Local Authorities
. Religious Bodies
. Statutory Boards
- Interest on Savings and Term Deposits, if the interest is not the income of a financial institution or investment company or any other person whose business activity includes the investment of funds.

Dividends

Business Tax at the rate of 15% should be withheld from all dividend payments, and reported and paid over immediately to the Income Tax Department by the Company paying the dividend. This is a FINAL tax on this type of receipt, and should not be combined with other receipts being reported for Business Tax purposes in your monthly return.

Withholding Taxes

- Dividends: 15%
- Interest (paid to non-residents): 15%
- Management fees, rental of plant and equipment and charges for technical services (paid to non-residents): 25%

Taxation of Non-Residents

Every person who makes payments to a non-resident for the below listed, is required to withhold tax at the specified rates. The tax withheld should be immediately paid over to the Income Tax Department.
- Dividends: 15%
- Insurance Premiums: 25%
- Interest on Loans: 15%
- Management fees: 25%
- Rental of plant and Equipment: 25%
- Technical Services: 25%
- Royalty: 15%
- Commission: 15%

Taxation of CARICOM Members

Every person who makes payments to a person from a CARICOM Member State for the below listed, is required to withhold tax at the specified rates as follows:
- Dividends: 0%
- Interest: 15%
- Royalties: 15%
- Management Fees: 15%

Real Estate Business

Every person who deals in real estate business is required to submit to the Commissioner of Income Tax a statement (TD27) for each transaction conducted by him, which contains the full details of such transaction, including the location and value of the property involved. Gross receipt from Real Estate Business is taxed at the rate of 1.75% and the commission is taxed at 15%.

Belize Tax Rates on Other Businesses

a) Receipts from radio, on-air television and newspaper business: 0.75%
b) Receipts from domestic air line business: 1.75%
c) (i) Receipts of service stations from the sale of fuel and lubricants: 0.75%
    (ii) Receipts of service stations from the sales of all other items: 1.75%
d) Receipts from other trade or business: 1.75%
e) Rents, royalties, premiums and any other receipts from Real property (excluding the receipts from Real estate Business: 3.0%
f) Receipts from profession, vocation or occupation: 6.0%
g) Receipts of an insurance company licensed under the Insurance Act: 1.75%
h) Commissions, royalties, debentures, discounts, winnings from lotteries, Slot Machines and table games: 15%
    Provided that in the case of commissions of less than $25,000 per annum, the rate shall be: 5.0%
i) Interest on loans to non-residents: 15%
j) Receipts of a Financial institution licensed under the Banks and Financial Institutions Act: 15%
    Provided that in the case of a financial institution which falls Within a "PIC Group" as defined in the International Business Companies Act, the rate shall be: 12%
    Provided further that in the case of a unit trust governed by the Bank and Financial Institutions (Unit Trusts) Regulations, the rate shall be: 6%
k) Management Fees, rental of plant and equipment and charges for technical services:
   (i) if paid to a non-resident: 25%
   (ii) if paid to person from CARICOM: 15%
   (iii) if paid to a resident, the rate applicable to the particular trade, business, profession, vocation or occupation of the payee.
l) Receipts of entities providing telecommunication services: 24.5%
m) Gross earnings of Casinos or licensed gaming premises or premises where the number of gaming machines is more than 50: 15%
n) Gross earnings from Real Estate Business as follows:
   (i) Real estates brokers and agents, earning commissions: 15%
   (ii) Real estate sales, developers, condominium owners and fractional interests: 1.75%
   (iii) Long Term Leases: 1.75%
   (iv) Time Shares Operators: 1.75%
   (v) Share Transfer Sales: 1.75%

Exchange Control in Belize

Under the Exchange Control Act of Belize, only the Central Bank of Belize and authorised dealers may deal in foreign currencies. To pay for goods and services procured outside Belize in foreign currency, a foreign exchange permit must first be obtained from the Central Bank. Central Bank permission is also required to secure a loan outside Belize denominated in a foreign currency.

Belize International Business Company (IBC)

An Offshore Company incorporated in Belize is known as an IBC (International Business Company). IBCs (International Business Companies) are exempt from both Corporate and Business Tax.

IBC's are companies (Offshore Companies) that are set up to take advantage of Belize's emerging reputation as a well regulated and international financial structuring center. They can do business only with non-residents of Belize but can have an office (only) in Belize and access Belize Offshore banks to open and maintain USD, Euro, Canadian and Sterling accounts. Retirees who fall under the QRP Programme also can qualify for this benefit while residing in Belize.

IBC's in Belize are 100% tax free and subject to no reporting or filing requirements. Meetings can be held worldwide and there are no exchange permissions required, of currency conversion requirements.

The majority of incorporations for offshore purposes in Belize take the form of an international business company. Offshore Trusts are another popular option in Belize and can be used as a stand alone entity or in conjunction with an international business company. Belize has become popular jurisdiction for the offshore companies' incorporation due to its English-based legal system. The Belize offshore legislation was based on the British Virgin Islands model. In addition, full-ranged, high-tech and international offshore banking services empower Belize as an ideal jurisdiction, so that Belize has been experiencing a fast growth in the formation of offshore international business companies. Offshore companies enjoy a flexible corporate structure making Belize a dynamic leader globally in the offshore company formation.

Key Features of a Belize Offshore Company:

- Tax exempt - Belize Offshore companies are exempt from all local taxes
- Privacy - The names of director(s) and shareholders do not appear on any public document
- The company needs only one director and one shareholder
- There is no requirement for resident directors or shareholders
- There is no minimum capital requirement
- The company does not need to keep accounts
- The names of directors and shareholders are not held on public record
- There is no requirement for directors or shareholders to attend meetings in Belize

Belize Free Zones

Such close proximity to members of NAFTA creates ideal conditions for establishment and development of Belize Free Zones.

Commercial Free Zone (CFZ) at Corozal

Corozal Commercial Free Zone is located right beside the Mexican border. It has facilities suitable for manufacturing, packaging, distribution of different kind of products and services.

All business located in the CFZ have 10 years tax holiday. They pay income tax from 2% to 8% thereafter. Employment of local residents decreases the tax rate by up to 2%. All imported and exported products, materials and supplies are exempt from any customs duties, quotas, etc.

Export Processing Zones (EPZ)

There are 3 Export Processing Zones (EPZ) in Belize. The San Andres EPZ is located close to the border with Mexico. The Philip Goldson International Airport EPZ and Price Barracks EPZ are situated close to Belize City.

Companies approved by the Ministry of National Development receive EPZ status, which gives them rights to conduct business in EPZ. Such companies are exempt from all taxes including income tax, withholding tax and capital gain tax for 20 years

Belize General Sales Tax (GST) Rate

The standard rate of general sales tax (GST) in Belize is 10%.

General sales tax (GST) is, effectively, a value added tax with tax becoming payable at each stage in the supply chain and with tax incurred on inputs being recoverable by offset against tax charged by a business to its customers on taxable supplies. For GST purposes, 'business' has a very wide meaning and can include activities on which no profit is made. 'Taxable supply' is a supply of goods and/or services made in the course of, or furtherance of, any business. Therefore, where a supply is not specifically exempted it will be a taxable supply.

The principal exempt supplies are:
- most financial services
- services of educational institutions
- medicines and medical supplies
- hotel or similar accommodation
- domestic public transport
- international transport of passengers or goods
- postal services.

Providers of exempt supplies do not charge GST but are unable to recover GST which they have paid on their inputs.

Taxable supplies are either zero rated, i.e. the tax rate is 0%, or standard rated with a tax rate of 10%. Zero rated items include:
- exported goods and services
- food staples for human consumption
- a variety of agricultural inputs
- water supply (other than bottled water).

All items not specifically tax exempt or zero rated are classed as standard rated.