Belize's Tax Rules: Global Income

Belize is considered a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. The country has a territorial tax system, meaning residents only pay personal income tax on income derived from within Belize. Foreign income is not taxed and is tax-exempt. Belize also does not have a capital gains tax or inheritance tax.

Belize's territorial tax system

Belize is considered a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. The country has a territorial tax system, meaning residents only pay taxes on income earned within Belize. Foreign income is not subject to Belizean taxes.

Belize's tax system is based on a territorial principle, which means that individuals are taxed on income earned within the country. The tax rate is 25% on taxable income, with the first $14,500 of annual income exempt. This includes income from employment, business, self-employment, rental income, and investments. Both residents and non-residents pay this flat income tax rate, and anyone earning under $26,000 BZ is exempt.

Belize has no capital gains tax, wealth tax, or inheritance tax. The country also offers a Qualified Retired Person (QRP) status, which allows retirees to live a tax-free lifestyle. This status is open to residents of the US, Canada, the EU, and Commonwealth countries, and requires a minimum monthly income of $2,000 from sources outside Belize.

The process of becoming a tax haven began in the early 1990s when the Belizean government consulted with professionals from other top safe havens. This led to the creation of legislation such as the International Business Companies Act, the Trusts Act, and the Offshore Banking Act, which have made Belize one of the most corporate-friendly nations in the world.

Tax exemptions for residents

Belize is considered a tax haven, offering a range of tax benefits to its residents. The country has a territorial tax system, meaning residents are only taxed on income earned within Belize. For residents, the first $14,500 of their annual income is exempt from income tax, and pension income is also exempt.

Belize has a flat income tax rate of 25% on taxable income, and if you earn under $26,000 BZD, you are exempt from paying income tax. The country also offers a qualified permanent residence law, which allows retirees to live a tax-free life. Additionally, Belize has no capital gains tax, no corporate taxes, and no wealth or inheritance tax.

The country also provides tax exemptions for specific sectors, including finance, pharmaceuticals, and agricultural products. The tax system allows for exemptions, ensuring that if income tax surpasses economic activity tax, the excess tax is waived. Belize also has a low property tax rate of 5%, making it attractive for real estate investors.

Belize's tax laws are relatively simple compared to countries like the US, but it is always recommended to consult an expert, especially if you plan to spend a significant amount of time in the country.

Tax treaties with other countries

Belize has established itself as a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. Belize has few tax treaties with other governments, but it has signed and ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI). This convention, negotiated by over 100 countries and jurisdictions, is aimed at updating bilateral tax treaties and reducing tax avoidance opportunities for multinational enterprises.

Belize has 14 Double Tax Treaties (DTC) with the following jurisdictions: Antigua and Barbuda, Austria, Barbados, Dominica, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Switzerland, Trinidad and Tobago, the United Arab Emirates, and the United Kingdom. Additionally, Belize has 14 Tax Information Exchange Agreements (TIEA) with: Australia, Belgium, France, the Netherlands, the United Kingdom, Finland, Sweden, Denmark, Norway, Iceland, Ireland, Greenland, the Faroe Islands, and Portugal.

The country also has a longstanding tax treaty with the United Kingdom, dating back to 1947, which continues to be in force. This arrangement, known as the Belize-UK Double Taxation Arrangement, was amended in 1973 and covers surtax, income tax, and profit tax. Furthermore, Belize and the UK signed a Tax Information Exchange Agreement in 2010, which entered into force in 2011, further enhancing the exchange of information between the two countries.

US expat taxes in Belize

Belize is a tax haven that allows individuals and corporations to legally reduce their tax liabilities. While Belize does not tax income earned outside of the country, the US taxes its citizens and residents on their global income. This means that US expats living in Belize will likely need to file taxes in both countries.

As a US expat living in Belize, you must file a US tax return every year, reporting your worldwide income to the Internal Revenue Service (IRS), even if you earn all of your income in Belize. The deadline for filing US taxes is April 15, with an automatic extension for expats until June 15, which can be further extended to October 15 upon request. If your income is over $10,000 (or $400 if you're self-employed), you must file IRS Form 1040. You may also need to file additional forms, such as Form 8938 for overseas assets over $200,000, and the Foreign Bank Account Report (FBAR) for foreign financial accounts with a total value exceeding $10,000 at any point during the year.

Belize Taxes for US Expats

In addition to US taxes, you may also need to file a tax return in Belize if you have taxable income that exceeds the annual threshold. The Belizean tax year is the same as the US, from January 1 to December 31, and tax returns are due by March 31. The primary tax form for residents is BTS203 – Income Tax Return for Employees, and the tax authority is called the Income Tax Department.

Belize has a territorial tax system, meaning residents are only taxed on income earned within Belize. The income tax rate is 25%first $14,500 of annual income is exempt. If you make under $26,000 BZD, you are exempt from income tax. There is no capital gains or inheritance tax in Belize.

To qualify as a Belize resident for tax purposes, you must spend over 183 days a year in the country or have a permanent residency visa. To obtain permanent residency, you must live in the country for at least a year and not leave for more than 14 days during the past tax year. You must also demonstrate financial stability and a clean criminal record.

Belize's tax residency requirements

Belize is considered a tax haven, allowing individuals and corporations to legally reduce their tax liabilities. It has a territorial tax system, meaning that permanent residents only pay personal income tax on income derived from within Belize. Foreign income is not taxed and is tax-exempt.

Belize has a simple process for incorporating offshore companies, and does not share information with international taxing authorities, providing confidentiality for corporations and individuals. It has no capital gains tax, no stamp duty, and no reporting requirements.

To become a tax resident of Belize, an individual must be present in the country for 183 days or more during a calendar year. There is no requirement to actually reside in Belize on a permanent basis, and even if you are away for ten years, you will still maintain your permanent residence status.

To obtain permanent residence, an individual must have legally resided in Belize for at least one year. All visitors with a valid international passport and/or visa obtain a 30-day tourist entry permit upon arrival, which can be renewed for a fee of $25 for each month of the first six months, and $50 for each month of the last six months. During this year, the individual can leave Belize as many times as they like but cannot leave the country for 14 or more consecutive days.

To apply for permanent residence, the individual must apply for a work permit, even if they do not intend to work in Belize. They must also undergo a medical examination, including an HIV test and an STI test. They should also have a crime-free record in their country of previous residence. The application process takes around four months and costs less than $1,000.

Once an individual has obtained permanent residence, they can start their own business or look for a job. They are free to come and go as they wish, and their permanent residence status will only be revoked if they commit a crime or otherwise upset the government.

Frequently asked questions