VAT Exemptions Apply on Charitable Relief Operations
The Ministry Finance advises the public that where disaster relief operations are carried out by charitable and non-profit organizations, provisions exist under the VAT Act for exemptions and refund of VAT expenses. Charities must register online and obtain a TIN or Tax identification number from the VAT Department. They must ensure that the TIN is quoted on all of their local expense receipts.
Most relief organizations have already received a TIN. Others are encouraged to register. In most cases, the process of getting a TIN takes less than 24 hours.
All donations of relief supplies shipped from outside The Bahamas are eligible for exemptions of both the VAT and Customs duties, once advance notice and documentation is given to the Ministry of Finance, or the request is sanctioned by NEMA.
Where charities incur direct expenses on their relief operations, whether for supplies or charter operations, they can apply to the VAT Department for refunds. Refunds, however, cannot be provided to private individuals for goods donated to charities, whether purchased or used. However, where monies are donated, the relief organizations qualify for the VAT refund, when they use these funds.
To avoid being victims of fraudulent schemes, it is strongly recommended that persons making donations to relief organizations request proof that the organization has a tax identification number.