Barbados enacts a 15% domestic minimum top-up tax for large groups

The Senate passed the Act on 7 May 2024. The Barbados Revenue Authority administers it.

What changed

• Barbados entities of groups with consolidated revenue of at least EUR 750 million in two of the last four years pay top-up tax where the group's effective rate in Barbados is below 15%.
• It applies to fiscal years beginning on or after 31 December 2023, so from 2024 for calendar-year groups.
• For the first fiscal year, top-up tax applies only where the group's income is subject to an income inclusion rule or undertaxed profits rule in another jurisdiction.
• Barbados has not adopted its own income inclusion or undertaxed profits rule. The package also brought in refundable credits, such as a jobs credit for qualifying payroll.

Later developments

The Barbados Revenue Authority issued a guidance note on the transitional rule for fiscal year 2024 on 16 July 2026.

Who is affected

Barbados entities of large multinational groups and their tax teams.

Sources

• Barbados Revenue Authority: Corporation Top-up Tax Act 2024-16
• Barbados Revenue Authority: Corporation Top-up Tax overview
• OECD Pillars: A review of Barbados's conditional domestic minimum tax