The 2012 worldwide VAT, GST and sales tax guide

50 B ARBADOS
• If none of the input tax for the period is directly related to the
making of taxable supplies, no VAT is recoverable.
If part or all of the input tax for the period is related to the making
of both taxable and exempt supplies, an apportionment calculation
must be performed. The amount of recoverable input tax is
calculated based on the ratio of the value of taxable supplies
made during the period compared to the total value of supplies
(taxable plus exempt) made during the period.
If a taxable person makes no taxable supplies during the tax
period, the VAT authorities may limit the amount recoverable to
the amount that they consider to be “fair and reasonable.”
However, this provision is generally not invoked.
Refunds. A refund arises when the amount of input VAT recoverable
in a month exceeds the amount of output VAT payable. The
VAT Act now provides that registrants may offset unpaid VAT
refunds owed for a previous period against output tax due for the
current period. Under prior law, refunds were generally paid by
check after the submission of the VAT return. If the refund claim
was submitted within the specified time (21 days after the end of
the tax period) and the refund amount remained unpaid after 6
months, the tax authorities were required to pay interest on the
outstanding balance at a prescribed rate of 1%.
G. Invoicing
Sales invoices and credit and debit notes. A taxable person must
provide a tax invoice for all taxable supplies made to registrants.
A tax invoice is necessary to support a claim for input tax recovery.
A credit note or debit note must be issued when the quantity or
consideration shown on a tax invoice is altered. Credit and debit
notes must contain broadly the same information as a tax invoice.
Exports. VAT is charged at a rate of 0% on supplies of exported
goods. However, to qualify as zero-rated, exports must be supported
by evidence that confirms the goods have left Barbados.
H. VAT returns and payment
VAT returns. VAT reporting periods are generally two months.
However, the tax authorities may require longer or shorter tax
periods if they consider it appropriate. Returns must be filed by
the 21st day of the month following the end of the tax period. Any
tax due for the period must be remitted with the return.
Penalties. VAT penalties generally relate to VAT accounting. The
following are some of the penalties associated with breaches of
the VAT law:
• A penalty of BDS$100 for the late submission of a VAT return
• A late payment penalty of 10% of any output tax due
• Interest at the rate of 1% of any outstanding tax and penalty
In addition, several other penalties may apply, including the
following:
• Failure to display a certificate of registration: BDS$1,000
• Failure to notify the tax authorities of changes relating to the
registration: BDS$1,000
Criminal penalties may also apply in certain circumstances, such
as in cases of fraudulent conduct.