On March 20th 2019 The Minister of Finance, Economic Affairs and Investment presented the Budgetary Proposals and Financial Statement.
A Policy Note was subsequently issued indicating that the effective April 1, 2019 the supply of Villa accommodation was exempt from the Value Added Tax, therefore persons who supply Villa accommodation were not required to register for VAT, nor were they allowed to claim the VAT incurred on expenditure. It went on to state that persons who supply tourist accommodation by way of Villas are required to charge the Shared Economy Levy (SEL) on the accommodation, as is the case with AirBnB and other Shared Economy providers, and remit the same to the Barbados Revenue Authority. The SEL is 10% of the cost of the accommodation.
A separate Policy Note was issued with respect to the Tourism Levies which spoke of the application of the Room Rate Levy to “Vacation Rental Properties” of 3.75% up to a cap of US$17.50 per bedroom per night.
Needless to say there was much confusion and frustration as it was not clear whether the Tourism Levies applied to Villa accommodation or not.
We have today finally been advised that the Tourism Levies will not apply to the villa sector and only the 10% Shared Economy Levy should apply to the properties within our portfolio. It was also confirmed that the 10% Shared Economy Levy will not be increased on January 1, 2020.
On this basis we shall be updating our website and quotes to reflect this change.
Although the effective commencement date is retroactive to April 1st 2019, the Barbados Revenue Authority has agreed and accepted that any bookings taken prior to the issuance of the Policy Note will not be adjusted and they have accepted that this is reasonable practice.
July 17th 2019