Bahamas: VAT implications on drafting contracts - KPMG Global
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Bahamas: VAT implications on drafting contracts

Bahamas: VAT implications on drafting contracts

Complex transactions typically require well drafted contracts. A poorly drafted contract can often result in unintended consequences when it comes to value added tax (VAT) and the parties’ responsibilities.


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VAT has four fundamental areas that affect contract terms:

  • Nature of supply (e.g., goods, services, tangible property, real property, intellectual property)
  • Consideration paid (e.g., cash or in-kind payments)
  • Place of supply (e.g., domestic or foreign transaction)
  • Time of supply (i.e., when the VAT is payable)

A contract needs to address each of these fundamental areas to avoid ambiguity and to limit risk of VAT liability. No business wants to face the costly mistake of being unable to collect the VAT from their customers or having to absorb unexpected VAT costs. 


Read a 2017 report [PDF 256 KB] prepared by the KPMG member firm in the Bahamas

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