The Central American country of Belize offers exciting business opportunities for foreign investors. With its strategic location and favorable tax policies, it’s an ideal location to start a business. Learn more about Accounting and Taxation in Belize
However, understanding accounting and taxation in Belize is crucial. In this article, we’ll explain why reliable accounting and tax services are essential for your success in Belize. Read on to discover vital insights into doing business in this developing Central American country.
What are the Tax Laws in Belize?
In Belize, taxes are based on the principle that individuals are taxed only on the income they earn within the country. However, there are specific cases where filing taxes is mandatory:
Residents of Belize must file a tax return if their taxable income surpasses the yearly threshold. This includes income from employment, business, rentals, and investments. Non-residents earning income in Belize, whether through employment, business, rentals, or investments, are also obligated to file tax returns.
Certain individuals must file taxes in Belize regardless of income, such as directors or officers of Belizean companies, recipients of dividends from Belizean companies, property owners in Belize, and beneficiaries of trusts set up in Belize.
Even if you aren’t required to file taxes, it’s essential to report specific information to Belizean tax authorities. For instance, if you hold a bank account or other financial assets in Belize, you may need to report this information annually.
Accounting and Taxation in Belize: Key Local Tax Rates
Understanding accounting and taxation in Belize is essential when entering this market. Here is a selection of key tax rates.
Income Tax: Residents and non-residents will pay a flat income tax rate of 25% on taxable income. If you make under $26,000 BZ, you’re exempt from income tax.
Corporate Tax: Companies in the oil industry pay a 25% flat tax rate on all profits. Other companies pay business tax at a set rate, depending on their profits.
Value-added Tax: Belize has a VAT rate of 12.5%
Capital Gains Tax: There is no capital gains tax in Belize.
Property Tax: In Belize, rented properties are subject to a fixed 12.5% property tax, while vacant properties incur a 2% property tax.
Social Security: Both employees and employers in Belize are responsible for Social Security taxes, which are calculated according to the weekly income earned by the individual.
International Tax Treaties
Belize has established agreements with various countries to prevent double taxation and ensure tax information exchange.
It has 14 Double Tax Treaties (DTC) with Antigua and Barbuda, Austria, Barbados, Dominica, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Switzerland, Trinidad and Tobago, United Arab Emirates, United Kingdom.
Additionally, there are 14 Tax Information Exchange Agreements (TIEA) with Australia, Belgium, France, Netherlands, United Kingdom, Finland, Sweden, Denmark, Norway, Iceland, Ireland, Greenland, Faroe Island, and Portugal.
Belize has also ratified the Multilateral Convention to Prevent Base Erosion and Profit Shifting, effective from August 1, 2022.
What is Needed to Register a Business in Belize?
Below is a checklist of the important steps needed to incorporate a company in Belize.
- Conduct a name check with the Belize Companies Registry.
- Complete a Memorandum and Article of Association (M&A) and submit this to the Registrar in Belmopan along with the formation fee.
- Approval is granted by the Central Bank of Belize.
- A Certificate of Incorporation will be issued by the registrar and it should be displayed at the registered office of the company.
- Upon receipt of the Certificate of Incorporation, the first director may be appointed along with the shareholders.
- Once the company is formed, officers need to be appointed to run the business. These officers may be the directors.
- Issuance of a company seal from the relevant authorities.
Common Questions When Understanding Accounting and Taxation in Belize
Based on our extensive experience, these are the common questions and concerns of our clients when seeking to understand accounting and taxation in Belize.
Oil industry companies are subjected to a fixed 25% tax rate on all profits, while other businesses pay taxes based on a specific rate determined by their profits.
The Belize Tax Service (BTS.)
In Belize, accounting rules under the Accounting Records Act focus on document preparation, storage, accessibility, and retention. The Belize Accounting Records (Maintenance) Act serves as the legal basis. It applies to International Business Companies and Belize International Trust. Companies must keep records at their registered office or agent’s office. Records like assets, liabilities, sales, purchases, and financial transactions are required.
The Institute of Chartered Accountants of Belize (ICAB) is the exclusive professional accountancy body in Belize authorized to grant the Chartered Accountant designation.
Companies have the flexibility to prepare their accounting records and financial statements according to the International Financial Reporting Standard (IFRS) since Belize does not adhere to a specific accounting standard or framework.
Biz Latin Hub Can Help You With Accounting and Taxation in Belize
Biz Latin Hub is your trusted partner for accounting and taxation in Belize. Our dedicated team offers comprehensive market entry support and tailored back-office services to meet your specific needs.
We specialize in services such as accounting, taxation, company formation, due diligence, legal assistance, and hiring and PEO. With our extensive presence in 16 markets across Latin America and the Caribbean, we are well-equipped to support your cross-border operations and facilitate market entry across multiple jurisdictions.
Rest assured, our commitment to compliance ensures that your company adheres to all laws regarding accounting and taxation in Belize. Partner with us for seamless business operations in Latin America.
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