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Belize Company Taxation Deductions and Exemptions

(b.) Deductions / Exemptions

A company must annotate the amount of tax owed upon receipts provided to shareholders receiving dividends. This receipt will show that the company is entitled to double taxation relief as dividends have been paid to shareholders, whom will pay tax on these receipts. The company’s tax rate after this deduction is called the “net colonial rate.”[1]

Any gains or profits received by a non-resident received from the business of shipping will be exempt from taxation in Belize granted that the person’s country of residence does similarly exempt the income.[2]

Deductions from income include the following items as specified in Section 11 of the Income and Business Tax Act:

i. Interest paid or payable on money borrowed to acquire income,

ii. Interest on money borrowed to acquire shares in a company doing business in Belize,

iii. Rent paid on land or buildings occupied for the purpose of acquiring income,

iv. The value of obsolete machinery, plant or equipment that has been replaced less any depreciation or exhaustion deductions previously expensed less the amount realized by the sale of the old equipment can be deducted from income,

v. Sums expended to satisfy the Commissioner on re-afforestation of timberland working to replace felled timber depleted previously,

vi. Sums expended for repair of premises, plant and machinery employed in acquiring income,

vii. Sums expended for repairing, renewing or altering implements tools and utensil to acquire income,

viii. Bad debts incurred in trade, business, professions or vocations that can be proved to have become bad within the basis year, (NOTE. Any such funds later recovered will be considered business income.)

ix. Non-residents that expend funds in the nature of head office expenditures whose expenditures do not exceed two and a half per cent of gross receipts may deduct this expense,

x. And finally Belize allows for the deductions of certain sums expended in industries approved by the Minister of Belize for a purpose approved by the Minister that is generally considered for the welfare of the public or a particular segment of the public.[3]

[1] Id. § 22.
[2] Id. § 9.
[3] Id. § 11(1)(a).