Tax In Belize

A Contractor’s Guide to Taxes :

One of the most consistently challenging aspects of contracting in Belize is complying with the country’s tax system. As well as paying tax in Belize, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income:

If you’re working in Belize under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Belize for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Belize, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Belize through PAYE is left with the prospect doing everything themselves.

Do you know much about Belizean Tax Law? Does Belize have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Belize can range from 0 to 25 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator:

If you are a contractor and want a calculation on your tax and net retention in Belize, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax :

Contractors in Belize are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Belizean umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Belizean taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Belizean tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax:

We work with numerous umbrella companies in Belize, many of whom are experts in tax and immigration laws. If you have any questions about tax in Belize, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Belizean work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Belize but without the overhead of directly dealing with the Belizean tax authorities. Get in touch with us today for some reliable advice on tax in Belize!

When Do You Need to Lodge Your Tax Return?:
31 March (of the year following the income tax year)
Tax Filing Deadline :
31 March (of the year following the income tax year)
Can you file it online? :
No
Currency:
Belize Dollar (BZD)
Tax-free Threshold in:
BZD26,000
Grossed Income:
0 – 26,000
Tax Rate:
0%
Grossed Income:
>26,000
Tax Rate:
25%
How long does it take to set up:
9 days
How much does it cost:
BZD200-350 + 25% of the annual rental value of business premises
Is it easy? :
Starting a Business Rank: 161/190 (Source: World Bank)
How to File Taxes in:

In Belize, the income tax year corresponds with the calendar year.

Step 1: Prepare Documents

Prepare the following documents:

  • TD4 slip(s) from your employer(s)
  • Original receipts/acknowledgements (for charitable contributions)

Step 2: Download the Income Tax Form

The income tax form for individuals can be downloaded from the Income Tax Department of Belize website here(link is external).

Step 3: Complete Form

There are 3 parts to the form:

  1. Part P – Personal Information
  2. Part A – Income
  3. Part 2 – Tax Calculation and Declaration

Part P

Fill out your personal details including:

  • Full name
  • Date of birth
  • Mailing address (use your work address if there is no one at home to receive mail during the day)
  • Employer and position

Part A

Part A of the form can be accessed via the tabs on the bottom of the spreadsheet.

Insert the information from your TD4 slip(s). Total the earnings and carry this figure to line (1) in Part 2.

Part 2

Enter your deduction entitlements (if applicable) including:

  • Basic personal relief (Line 30)
  • Charitable contributions (Line 31)
  • Contributions to education (Line 31)
  • Standard tax deduction (Line 55)
  • Tax deductions at source (Line 70)

The amount of tax deducted from your income (‘tax deductions at source’) is shown in Box E of your TD4 slip. If you have more than 1 TD4 slip, total all the amounts and insert the final figure in Line 70.

See below under ‘Tax Figures in Belize’ for more details.

Step 4: Compute Tax Payable/Refundable

You are entitled to a tax refund if:

(i) The tax payable is less than the tax deducted from your income; or

(ii) Your total income is below BZD26,000 after deductions.

Tax is payable if it is more than the tax deducted from your income.

A comprehensive guide to computing tax payable can be found here(link is external), with examples.

Step 5: Submit Form

Submit your form and tax payment at your nearest Income Tax Department office which can be found here(link is external).

Notes:

Deductions:

Residents are entitled to the following deductions on taxable income.

Standard Tax Deduction

All taxpayers are entitled to a $100 deduction in taxable income.

Personal Relief

Income (BZD)

Relief (BZD)

0 – 26,000 25,600
>26,000 – 27,000 24,600
>27,000 – 29,000 22,600
>29,000 19,600

Charitable Relief

Charitable relief is granted for contributions to cultural, educational or religious activities, charitable institutions, or the improvement of facilities in towns and villages in Belize. The minimum is BZD250 and the maximum is 1/6 of your taxable income after deducting the personal relief.

Education Relief

Education relief is granted for the education of children who are not the individual’s own, and attending school full-time. It is limited to $400 per child, and $1,600 in total.

Does the 183 day rule apply in:

Yes

When do you become a tax resident in:

You become a tax resident in Belize when:

  • You stay in Belize for 183 days or more during the income year (calendar year); or
  • You are domiciled in Belize.
Am I taxed on my global income in:

Residents are taxed on their global income. Non-residents are taxed on their Belize-source income only.

Note: Income from any employment activity undertaken in a country is derived from that country, regardless of whether or not such income is received in that country.

 

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