VAT is equivalent to sales taxes that exist in the US or anywhere else in Europe. It is a tax that is applied on top of sales of goods and services in the Bahamas. Bahamas is a “tax Paradise “ where there is no corporate or income tax.

The Bahamian government levies taxes mainly through the VAT and import duties. This is why Bahamas is considered expensive by American standards. Most goods are indeed imported from the US. Companies in the Bahamas collect taxes and remit them to the Comptroller of VAT. Some goods are exempt from VAT while most of them carried a 12 % rate , (as of January 1 2023).

As a tourist you will be concerned by shopping, restaurants, hotels and some services they all are taxed at the 12% rate.

Yacht Charter taxes in the Bahamas (Jan 2022)
Yacht charters used to be taxed at a 4% rate after July 1 2022 the Bahamian government introduced a 10% VAT additional tax on top of the 4%. Yacht charter operators as well as guests were very unhappy by this new measure that heavily affects the yacht chartering business and that makes yachting in the Bahamas so much more expensive.

Even if the yacht has a non Bahamian flag it will need to pay the Bahamian tax. The Bahamian government rationale was that the yacht industry earned a fortune by using Bahamian waters without paying its fair share. The government believes that they use the marine environment and natural resources and should pay for it. The Yachting industry is important for the Bahamas, it generated 37.3 % of the Bahamas total tourism revenues in 2021.

A significant percentage of Yacht charters decided to redirect their activities to other less expensive Caribbean destinations while Marina operators were saddened by the government’s decision.