Belize is a popular destination for expats due to its warm climate, beautiful scenery, and relaxed lifestyle. However, before moving to Belize, it’s important to understand the taxation system in the country. In this article, we will explain how the taxation system works in Belize, whether the country offers any double taxation agreements, the main taxes expats need to be aware of, any special tax breaks that could apply to expats, how and when to file a tax return as an expat, and the tax exit procedures for anyone leaving Belize to move abroad.
The Taxation System in Belize
Belize operates a territorial taxation system, which means that residents are only taxed on income earned within the country. Non-residents are only taxed on Belizean-sourced income, such as income from employment in Belize or income earned from a business operating within Belize.
The taxation system in Belize is relatively simple compared to other countries. There is no income tax for individuals, and the government relies on indirect taxes to generate revenue. The main taxes in Belize include the General Sales Tax (GST) and customs duties.
Double Taxation Agreements
Belize has signed double taxation agreements with several countries to avoid double taxation for individuals and companies. These agreements ensure that income is not taxed twice in both countries, which can result in a significant tax burden for taxpayers. Some of the countries that have signed double taxation agreements with Belize include the United States, Canada, and the United Kingdom.
Main Taxes in Belize
As an expat in Belize, there are several taxes that you need to be aware of. The main taxes include the General Sales Tax (GST) and customs duties.
General Sales Tax (GST)
The General Sales Tax (GST) in Belize is set at 12.5% and is applied to most goods and services, including accommodations, utilities, and transportation. As a consumer, you will need to pay the GST on any goods and services that you purchase in Belize.
Customs duties
Customs duties are levied on imported goods and are calculated based on the value of the goods. The duty rate ranges from 0% to 40%, depending on the type of goods and the country of origin. As an expat, if you are planning to import goods into Belize, you will need to pay the applicable customs duties.
Special Tax Breaks for Expats
Belize offers several tax breaks for expats who invest in the country. The Qualified Retired Persons Incentive Program (QRP) allows expats who meet certain requirements to retire in Belize and enjoy several tax breaks, including exemptions on income tax, capital gains tax, and import duties on personal belongings.
Filing a Tax Return in Belize
As an expat in Belize, you are not required to file a tax return if you don’t have any income earned within the country. However, if you do have income earned in Belize, you will need to file a tax return. The tax year in Belize runs from April 1st to March 31st. The tax return must be filed by June 30th of the following year.
To file your tax return, you will need to obtain a tax identification number (TIN) from the government. You will also need to gather all the necessary documentation, including income statements and receipts for any deductions. The tax return can be filed online through the government’s tax portal or in person at the tax office.
Tax Exit Procedures for Leaving Belize
If you are leaving Belize to move abroad, you will need to follow certain tax exit procedures. The first step is to inform the government that you are leaving the country and that you are no longer a tax resident. You will need to settle any outstanding tax liabilities, including any unpaid GST or customs duties. It’s important to note that if you have any assets in Belize, such as property or investments, you may also need to pay any applicable taxes before you can transfer ownership.
Belize offers a simple taxation system with no income tax for individuals. However, expats should be aware of the General Sales Tax (GST) and customs duties, which are the main taxes in the country. Belize also offers several tax breaks for expats who invest in the country, such as the Qualified Retired Persons Incentive Program (QRP). If you have income earned in Belize, you will need to file a tax return by June 30th of the following year. If you are leaving Belize to move abroad, you will need to inform the government and settle any outstanding tax liabilities, including any unpaid GST or customs duties. It’s always advisable to consult with a tax advisor before leaving Belize to ensure that you have fulfilled all your tax obligations and to avoid any future tax issues.