Since January 2019, Belize has incorporated a new tax regime which has led to the collapse of the zero-tax heaven regime. In simple words, all Belize international companies (“IBCs”) whether tax-residents or non-tax residents, are now liable for income taxes for carrying out a trade, business, or service inside Belize. IBCs which are not resident in Belize for tax purposes, must collectively satisfy the below:
- No physically present in Belize;
- The source of income occurs outside Belize; and
- Tax liable in other jurisdictions.
IBCs are now obliged to file annual tax returns, accounting records, pursuant to the requirement of the Income and Business Tax Act. IBCs that are physically present in Belize must also file and pay monthly business tax. Tax returns should be filed accompanied by Financials. Financials can be internally generated but audited financials should be presented when requested by the Director General.
Applicable Tax Rates:
- 1.75% of chargeable income of companies with whose gross receipts from business operations are greater than 3 million Belize Dollars; or
- 3% on companies whose gross receipts are lower than 3 million Belize Dollars
Considering the challenges, a business may encounter based on the above, re-domiciliation to a different jurisdiction is the best solution in most of the cases. The major advantage of re-domiciliation, as opposed to the incorporation of a new company, it is the benefit of continuity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.