Skip to main content

Barbados: Repeal of 2019 economic substance law; passage of Economic Diversification and Growth Fund Act 2025

Repeal of 2019 economic substance law effective January 1, 2025

Share
January 5, 2026

The Barbados Parliament in November 2025 passed two laws (the Companies (Economic Substance) (Repeal) Act, 2025 and the Income Tax (Amendment) Act, 2025) that repeal the 2019 economic substance law, effective January 1, 2025. Accordingly, as of that date, the economic substance doctrine in Barbados will only apply to Barbados companies paying less than the 9% domestic tax rate (e.g., small businesses and insurance companies), with the higher 9% rate applying to the majority of multinational enterprises (MNEs) over the global minimum tax revenue threshold of €750 million. In addition, the economic substance doctrine will be administered by the Barbados Revenue Authority (rather than the international business unit as under the prior law). Read a January 2026 report prepared by the KPMG member firm in Barbados

The Parliament in December 2025 also passed the Economic Diversification and Growth Fund Act, 2025, to provide financial support for companies engaged in business activity in Barbados.


For more information, contact a tax professional with the KPMG member firm in Barbados:

Chris Sulaiman | chrissulaiman@kpmg.bb

Marianne Greenidge | mariannegreenidge@kpmg.bb

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.

KPMG. Make the Difference.


Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. KPMG LLP does not provide legal services.

The information contained herein is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

© 2026 KPMG LLP, a Delaware limited liability partnership, and its subsidiaries are part of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.
All fields with an asterisk (*) are required.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's . Privacy Statement

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Search now!

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Submit

Office locations

View locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Learn more

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Contact

Headline