In Belize, employers have a responsibility to contribute to the Social Security Board (SSB) on behalf of their employees. The contribution rate is calculated as a percentage of an employee's gross salary. At present, the employer contribution rate stands at 8.13% of the employee's gross wages, capped at a monthly maximum of BZD $720.

To start making contributions, employers must first register with the SSB and obtain an employer registration number. SSB contributions are due monthly, and payments can be made online, at SSB offices, or through authorized banks.

Other Employer Contributions

Depending on the size of the company, employers may also be required to contribute to the Skills Development Fund.

Important Considerations

Employers are obligated to submit monthly reports to the SSB detailing employee wages and contributions. It's important to note that failure to comply with SSB regulations can result in penalties and interest charges.

In Belize, income tax is calculated on an employee's taxable income, which is the gross salary minus allowable deductions. Belize operates a progressive income tax system, meaning that taxable income is divided into brackets, each taxed at a different rate.

The first BZD $26,000 (approximately USD $13,000) of an individual's income is exempt from income tax. There might be additional exemptions and reliefs available depending on individual circumstances. For example, reliefs are specified for individuals earning between BZD $26,001 and BZD $29,000.

Social Security Contributions (SSC)

Employees in Belize are required to contribute to the Social Security Board (SSB). The contribution rate is calculated as a percentage of an employee's gross salary. Currently, the employee contribution rate is 8% of gross wages, up to a maximum of BZD $720 per month.

Mandatory Company Deductions

Employers might be required by law or company policy to withhold other deductions from an employee's paycheck. These may include:

• Health insurance premiums
• Pension plan contributions
• Union dues
• Loan repayments

In Belize, the traditional Value-Added Tax (VAT) is replaced by a General Sales Tax (GST) that operates in a similar manner. The standard GST rate in Belize is 12.5%. Businesses with an annual turnover exceeding BZD $75,000 are required to register for GST.

GST on Services

Most services provided in Belize are subject to GST at the standard 12.5% rate. However, a limited number of services are zero-rated for GST purposes, meaning no GST is charged on these services, but input tax can still be claimed. Examples of such services include financial services and educational services. Certain services, such as medical services and basic rental housing, are exempt from GST altogether.

Determining Place of Supply

The place where a service is supplied determines whether Belizean GST applies. If a service is physically performed and consumed within Belize, it is generally subject to Belizean GST. Conversely, if a service is primarily performed outside of Belize, it might not be subject to Belizean GST, even if the customer is located in Belize.

Import and Export of Services

Services imported into Belize may be subject to GST depending on the specific nature of the service. On the other hand, services exported from Belize, where the customer is located outside Belize, are generally not subject to GST.

GST Compliance

GST-registered businesses must file GST returns periodically (usually monthly or quarterly). These returns detail the GST charged on sales and the GST paid on purchases (input tax). Businesses are also required to maintain accurate records of sales, purchases, and GST calculations.

In Belize, businesses can benefit from a favorable tax regime. The general business tax rate is 1.75% of gross receipts, with exceptions for certain industries. International Business Companies (IBCs) are not subject to corporate tax or capital gains tax. Additionally, there are no inheritance tax or stamp duty charges.

Export Processing Zones (EPZs)

Businesses operating in Export Processing Zones (EPZs) can enjoy exemptions from capital gains tax, property and land taxes, excise, sales, and consumption taxes (GST), and import and export duties. These zones primarily focus on non-traditional agricultural products and manufactured goods for export.

Commercial Free Zones (CFZs)

Commercial Free Zones (CFZs) offer exemptions from income tax, capital tax, gains tax, and any new corporate tax for the first 10 years of operation. Dividends paid by a CFZ business are exempt for the first 25 years of operation. CFZ businesses are not required to have import or export licenses and there are no restrictions on foreign currency transactions within CFZs.

Designated Processing Areas (DPAs)

Designated Processing Areas (DPAs) are custom-designated areas for specific industries or projects. The exemptions and benefits vary depending on the specific DPA. These may include import duty and tax exemptions, exemptions from property and land taxes, exemptions from excise and consumption (GST) taxes on imported inputs, the opportunity to open foreign currency bank accounts, customs inspection at the designated area for expediency, and work permits for up to 15% of workers (senior management or technical staff).

Charitable Contributions

Businesses can deduct charitable contributions of a minimum of $500 up to $30,000 per year.

Other Tax Incentives

Other tax incentives include tax holidays for certain industries, investment allowances for specific investments, and accelerated depreciation for certain assets.