Tuesday, March 29, 2011
Tuesday, March 29, 2011
The Act, which came into force on January 1, 2011, repeals and replaces the Business Licence Act, Chapter 329, Statute Laws of The Bahamas (the “repealed Act”). The Act also repeals the following statutes:
• The Liquor Licence Act, Chapter 372, Statute Laws of The Bahamas;
• The Shop Licences Act, Chapter 377, Statute Laws of The Bahamas;
• The Music and Dancing Licences Act, Chapter 374, Statute Laws of The Bahamas; and
• The Registration of Business Names Act, Chapter 330, Statute Laws of The Bahamas
How does the Act affect existing businesses?
The Act prohibits any person from carrying on a business within The Bahamas without having a licence issued in accordance with requirements of the Act. Under the Act, “business” is defined as, “a profession, calling, vocation, occupation trade, manufacture or undertaking of any kind, an adventure or concern in the nature of trade, for the purpose of creating a turnover.”
Grace Period and Deadline for licensing under the Act
Every person who, as at January 1, 2011, was Licensed under the repealed Act (that is, existing businesses) shall be deemed to be licensed under the Act for a period of ninety (90) days, that is until March 31, 2011, unless such licensee has ceased business; AND MUST BEFORE
March 31, 2011, bring his business into compliance with the requirements of the Act.
This can be done by submitting an application in the prescribed form (with the required information) along with the required fees for the current year, to the relevant office.
Please note that unless special arrangements have been made to settle payment, no licence will be granted under the Act where fees are owing by the applicant under (i) the repealed Act (ii) the Act (iii) the National Insurance Act or (iv) the Real Property Tax Act.
Under the Act, certain concessions have been granted to existing businesses as follows:
• license fees which as at January 1, 2011, have been assessed or were paid for the year 2010 or are still assessable or payable in or for 2010 or any previous year, will remain valid until December 31, 2010 or such other date of expiry as may be stated in the license;
• persons with a turnover not exceeding $250,000 per annum who became entitled to or eligible for an exemption from the payment of business license fees by virtue of his payment or agreement to pay all outstanding license fees by 30th June 2010, will continue to be entitled to such exemption up to December 31, 2011;
• persons who agreed in writing to pay all business license fees outstanding under the repealed Act by June 30, 2011 will be entitled to the grant of a license under the new Act; and
• all business license fees which are outstanding under the repealed Act will continue to be payable at the rate under the repealed Act.
Accounts, Records & Reports
All existing businesses, except for those whose turnover does not exceed $50,000, are required to:
• maintain accounts and records of the activities of the business;
• maintain accounts and records in respect of any transaction relating to the business for a period of at least five (5) years from the date of the transaction; and
• permit the Secretary of Revenue to enter any licensed or other premises occupied for the purpose of the business to inspect and take copies of books, records, accounts or other documents in hard copy or digital form in relation to the business.
Further, before December 31 in each succeeding year, existing businesses will be required to submit financial statements to the Secretary of Revenue (or such person authorized to perform such functions) in the prescribed form along with the prescribed application fee.
Moreover, a licencee can be required by the Secretary of Revenue to provide any such information which may be required by the said Secretary to assist him with the administration and enforcement of the Act.
Generally speaking, annual business licence fees will be taxed based on turnover. Business licence fees will be $100 if the turnover does not exceed $50,000 per year. Where the turnover exceeds $50,000 per year, fees will be calculated as a percentage of the business’ turnover.
The Act defines “turnover” as “the total revenues in money or money’s worth accruing to a person for his own use and benefit from his business activities within The Bahamas during the preceding year or any part thereof or in such other accounting period as the Secretary may allow, including all cash, credit sales and commissions without any deductions whatsoever.”
All fees can be paid to any of the following places:
• if the business is located in New Providence, to the Treasurer or Business Licence Office in Nassau;
• if the business is located in a Family Island, to the Business Licence Office or Treasury Department or the Administrator, if the business is situated on a Family Island where there is no Business Licence Office or Treasury Department.
Publication of Business Names
A licensee under the Act is required to ensure that on all correspondence on which the business name appears, the name of the individual or the name of the corporation, as applicable, is also included therein same.
Changes to Information and Cessation of Business
Any change in the particulars of a licensee, the amendment of a licence, the inactivation or cessation of a business, must be reported under the Act within 14 days (or such longer period as may be allowed) of the occurrence of same.
Amendments to the Act have been tabled in the House of Assembly and are awaiting Senate approval. The Act currently requires all persons carrying on business in any year to submit to the Secretary certain financial information by December 31. The proposed amendments will change this date to March 31.
Additionally, the amendments, once passed, will amend the definition of “turnover” so that it will read as, “the total revenues in money and money’s worth accruing to a person from his business activities within The Bahamas during the preceding year or in such other accounting period as the Secretary may allow, including all cash, credit sales and commissions without any deductions whatsoever and, for hotels, turnover shall exclude occupancy tax collected.”
Should you require further information on the above, or the Act generally please contact Attorney, Samantha Knowles?Pratt at 393?4551 or by email on: email@example.com.