Barbados remains the preferred jurisdiction for Canadian companies conducting international business. The Canada/Barbados Double Taxation Agreement (DTA), now some forty years old, has been used successfully to enhance the global competitiveness of many Canadian companies.
Using the DTA, the applicable Barbados tax rate on income earned begins at a maximum rate of 5.5% reducing to a minimum of 1%. Barbados does not charge any withholding taxes on dividends, interest, royalties or management fees paid to the Canadian parent or to the Canadian shareholder.
Under the DTA, a properly structured and administered Barbados incorporated company will see its income earned remitted to Canada free of Canadian taxes. Thus, the adoption of the DTA brings very competitive international fiscal benefits to Canadian organisations. Horizon works with Canadian tax advisers in order to comply with and satisfy Canada Revenue Agency rules.
Additionally, and in support of the DTA, the Barbados/Canada Bilateral Investment Treaty (“BIT”) (1996) gives Canadian investors valuable asset protection when investing through a Barbados corporation. The BIT ensures compensation for loss of property and provides for international arbitration to settle disputes. The BIT allows for the transfer of returns on investments made.