A recently released value-added tax (VAT) guidebook has revealed inconsistencies in the government's previously announced VAT registration requirements, now requiring businesses to report earnings well below the $100,000 threshold in order to be eligible for deregistration.
The Ministry of Finance's recently released "Bahamas VAT Guide" reconfirmed that the VAT registration threshold for taxable supplies is currently $100,000, and companies are required to apply for VAT registration within 14 days of meeting this level of sales.
The VAT guidebook first states that businesses seeking to cancel their VAT registration must demonstrate that their taxable supplies have fallen below the threshold within the last year or will fall below $100,000 in the coming year.
Despite this, the guidebook goes on to suggest that only companies with taxable supplies of less than $80,000 will truly be considered for deregistration.
"It is unlikely that you will be deregistered for VAT unless the value of your taxable supplies have fallen below $80,000 in the last 12 months, or you can demonstrate that your taxable supplies will remain below $80,000 in the next 12 months. You must continue to treat your supplies as taxable until the comptroller has confirmed that your VAT registration has been cancelled," says the guidebook.
However, the book does not provide an explanation for this figure, and Ministry of Finance officials could not be reached for comment up to press time.
John Rolle, financial secretary in the Ministry of Finance, supported the $100,000 threshold last year, arguing that it would prevent the spreading of collection resources too thin and cut down on uncollected taxes.
The handbook also reveals record keeping and accounts guidelines for registered businesses. The guidelines require businesses to keep an up-to-date list of sales and purchases; income and expense accounts; cash register rolls, audit rolls and tapes or similar records; bank statements; records of supplies to staff and directors or self-supplies; accounting instruction manuals, systems, programs and any relevant documentation in use to describe the accounting system.
The guidebook further requires businesses to keep a VAT file with a copy of each VAT return submitted with the supporting calculations to provide an audit trail back to the sales and purchase records for up to five years.

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