By using our website you consent to all cookies in accordance with our Privacy Policy.
Last updated: 22 May 2020

In response to demand from EU council and OECD, Belize through years has implemented necessary tax reforms to remove its harmful tax practices, as in opinion of these bodies and to comply with international norms.

A Belize international business company (IBC) no longer benefited from automatic tax exemption status. Since the beginning of 2019, like domestic entities, tax treatment of international business companies is mainly governed by Belize Income and Business Tax Act (IBTA).

In this article, we will summarize key changes of Belize tax regime for an IBC.

Belize Tax Law on IBCs

Belize maintains a dual system of taxation, under which IBTA mainly resolves around 2 types of tax:

  • Corporate income tax (CIT) assessed on chargeable income; and
  • Business tax (similar to VAT) calculated based on gross income or turnover.

For the last 2 years, Belize has undergone significant changes to its tax treatment for an IBC. Namely, there were two tranches of amendment into its IBTA in 2018 and 2019.

1. Belize IBTA amendment released in Dec 2018 and came into effect in 1 Jan 2019

In December 2018, Belize amended its International Business Companies Act to eliminate ring-fencing and preferential tax treatment for offshore companies.

The amendment remarked a transformation of Belize tax system into territorial basic in which foreign sourced income is exempted from all kinds of tax in Belize.

1.1. CIT tax treatment under this amendment:

  • General income tax rate in Belize is set at 25%.
  • For petroleum operation, CIT is 40%
  • For IBCs and companies operating in Designated Processing Areas (DPA), CIT shall be:
    • 1.75% for chargeable income exceeding 3mil BZD
    • 3% for chargeable income less than 3mil BZD

Importantly, where a company is engaged in a trade, business, or profession where the revenue or income is derived outside of Belize, the company shall not be liable for payment of income tax in Belize.

1.2. Business tax treatment under this amendment:

The business tax rates vary for different types of income and are stipulated in the ninth schedule in the principal act (IBTA).

Moreover, business tax shall NOT apply to:

  • Persons or companies engaged in petroleum operations;
  • IBCs engaged in a trade, business, or profession if the revenue or income is derived outside of Belize;
  • Companies developing or operating in a designated processing area (DPA).

Despite the country’s aggressive steps toward improving its tax legislation, Belize’s new foreign source income exemption regime was still considered retaining harmful features with respect to ring-fencing and limited scope of economic substance applied to entities benefiting from tax exemption, just to name two.

This led to further amendment in its IBTA and the introduction of new economic substance legislation in late 2019.

2. Belize latest IBTA amendment released in Dec 2019 and came into force in 1 Jan 2020

2.1. CIT tax treatment under this amendment:

Starting from 1 Jan 2020, no income tax shall be payable upon the chargeable income of a company, other than a company engaged in petroleum operations.

2.2. Business tax treatment under this amendment:

Effective from 1 Jan 2020, every individual, self-employed person, professional, firm or partnership will be subject to business tax on all receipts regardless of receiving in or out of Belize.

There are three cases where a company will be discharged from business tax:

  • Companies engaged in petroleum operations;
  • An approved company under the Designated processing area (DPA);
  • Tax resident in other counties not named in EU annex I for tax purposes and not have a PE (permanent establishment) in Belize. And the company have to provide sufficient evidence of its tax residency abroad to claim this tax exemption. In addition, foreign sources income has to come from a Permanent Establishment (PE) of the source state (country where the income is derived) to be eligible for the benefit.

In order for an IBC to qualify for business tax exemption, it must provide supporting documents to demonstrate its tax residence in another country. However, further guide on documents, timeline and procedure for proving foreign tax residency are still under development.

To conclude, all Belize IBCs will now be subject to business tax on turnover unless an IBC can provide proofs of its foreign tax residence and it must derive foreign sourced income from a PE in the source state.

Should you have any question for tax liability of an IBC in Belize, please feel free to contact us via service@bbcincorp.com.


Recent Posts

opening-bank-account-covid-19-sharing-by-rachel-ng-bbcincorp
3 Jul 2020

Opening Bank Account During Covid-19 & Sharing By Rachel Ng From BBCIncorp

Open an Offshore Business Account Remotely, specifically in financial centers like Hong Kong and Singapore during Covid-19 Period, is it possible? Get the answer with Rachel Ng from BBCIncorp

Read more
dbs-hong-kong-now-supports-remote-bank-account-opening
27 May 2020

DBS Hong Kong now supports remote bank account opening

DBS Hong Kong now caters the need of business owners who cannot afford a trip to Hong Kong for registering a business account by way of temporarily suspending requirement to visit Hong Kong.

Read more
seychelles-announced-beneficial-ownership-act
22 May 2020

Seychelles announced Beneficial Ownership Act, 2020

On 5th March 2020, Seychelles passed two new laws of Beneficial ownership Act 2020 (BOA) and AML/CFT Act 2020 in replacement of AML Act, 2006.

Read more
recent-key-changes-in-belize-tax-law-on-ibcs
22 May 2020

Recent key changes in Belize tax law on IBCs

Belize has undergone significant changes to its tax treatment for an IBC. Namely, there were two tranches of amendment into its Tax Act in 2018 and 2019.

Read more
revised-incorporation-annual-fee-of-seychelles-ibcs
14 May 2020

Revised Incorporation & Annual Fee of Seychelles IBCs From 1st April 2020

Fees payable for the incorporation and annual renewal of all Seychelles International Business Companies (IBCs) effective from 1st April 2020 would be increased. See details!

Read more
hong-kong-the-2018-19-tax-payment-deadlines-extended
21 Apr 2020

Hong Kong: The 2018/19 Tax Payment Deadlines Extended For Three Months

IRD announced on the automatic three-month extension for the payment deadline of Salaries Tax, Tax under Personal Assessment and Profits Tax for the YOA 2018/19

Read more
bbcincorp-limited-received-ocbc-valued-partner-award-2019-2020
30 Mar 2020

BBCIncorp Limited received OCBC Valued Partner Award 2019/2020

BBCIncorp Limited was honored to announce its award "OCBC Valued Partner Award 2019/2020”. It is highlighted that this has been the 5th year that BBCIncorp received this honor.

Read more
delivery-service-temporarily-suspended-due-to-covid-19-pandemic
26 Mar 2020

Delivery Service Temporarily Suspended Due To COVID-19 Pandemic

Due to the severe impact of the coronavirus pandemic (COVID-19), BBCIncorp Limited regrets to announce the temporary suspension of delivery services by courier companies

Read more
ocbc-singapore-introduced-multi-currency-account-for-business
20 Mar 2020

OCBC Singapore Introduced Multi-Currency Account For Business

OCBC Singapore introduced its first product in the category of Multi-Currency Business Account, which can greatly benefit all local and foreign companies to grow their business internationally.

Read more
open-bank-account-online-with-dbs-and-ocbc
13 Mar 2020

Exclusive Offer: Open Bank Account Online With DBS & OCBC

In response to Coronavirus Outbreak (COVID-19), two of our largest partners – DBS and OCBC banks are now offering favorable approaches to support BBCIncorp’s clients and customers.

Read more