In order to attract more visitors and increase their value for money, the government of The Bahamas has reduced hotel taxes. The Ministry of Finance, in conjunction with the Ministry of Tourism, repealed the Hotel Guest Tax of 10 percent and replaced it with a 7.5 percent Value Added Tax (VAT). The VAT will be charged on hotels and home rentals as well as all other services supplied to guests. VAT registrants must make provision to collect the tax for stays already booked for 2015, and any contract executed or reservation made after Aug. 31, 2014, is considered under the general transitional provision for VAT and as such will be presumed to have made provision for VAT for accommodations commencing on or after Jan. 1. The legislation is very strict as to who may charge and collect the VAT and only VAT registrants with a Tax Identification Number (TIN) displayed in the holiday accommodation will be allowed to collect the VAT.
