5% vs 10% vs 0%:
Which Rate Applies?
A visual guide to Bahamian VAT rate selection — accurate per the VAT Act 2025 Amendment, Fourth Schedule.
By CoralLedger · Last updated: 22 March 2026
The Rotisserie Paradox
Same animal. Two different VAT rates. The outcome depends on two axes — supply type and seller type — both of which must qualify for Exempt treatment to apply.
Raw Whole Chicken
Unprocessed. Unprepared. Sold in a licensed grocery store.
Hot Rotisserie Chicken
Cooked. Prepared. Ready to eat. Supply-type axis fails — same store, different outcome.
Raw Chicken — Gas Station
Unprocessed. Unprepared. But sold at an unlicensed vendor — seller-type axis fails.
The two-axis rule
Exempt treatment for food requires both axes to qualify simultaneously. Axis 1 — supply type: the food must be unprepared and unprocessed at the point of sale. Axis 2 — seller type: the seller must hold a food store licence under the applicable Bahamian licensing regime. If either axis fails, the standard 10% rate applies.
Category Decision Tree
Use this flowchart to determine the correct VAT rate for any supply.
New 5% Rate: Effective September 2025
The 2025 VAT Amendment introduces a 5% reduced rate for essential hygiene and medical products, replacing the previous 10% standard rate for these categories.
Hygiene Products
From 10% → 5% effective September 2025
-
Diapers / Nappies
All sizes, disposable and reusable
5% -
Feminine Hygiene Products
Pads, tampons, menstrual cups
5% -
Adult Incontinence Products
Briefs, pads, protective underwear
5%
Medical Supplies
From 10% → 5% effective September 2025
-
Prescription (Rx) Drugs
Licensed pharmaceuticals dispensed on prescription
5% -
Over-the-Counter (OTC) Medications
Pain relief, cold medicine, antacids, etc.
5% -
Medical Devices
Glucose monitors, blood pressure cuffs, nebulizers
5%
Important: Rate Change Timeline
Before September 2025, hygiene and medical products are taxed at the standard 10% rate. The 5% reduced rate only applies from the effective date. Ensure your POS and accounting systems are updated before the changeover.
Quick Reference Table
Common rate scenarios at a glance — per the VAT Act 2025 Amendment. (Exempt supplies, such as residential rent and most financial services, sit outside this rate table; see §3 of the Bahamian VAT Guide.)
| Category | Examples | VAT Rate | Condition |
|---|---|---|---|
| Unprocessed food staples | Raw chicken, fresh produce, flour, rice, canned goods | 0% | Sold unprepared by a licensed food store |
| Prepared / cooked food | Rotisserie chicken, hot meals, restaurant food | 10% | Any preparation or cooking = standard rate |
| Food from non-licensed seller | Street food, food sold by unlicensed vendors | 10% | Seller must hold a food store licence |
| Hygiene products | Diapers, feminine hygiene, adult incontinence | 5% | Effective September 2025 (was 10%) |
| Medical supplies | Rx drugs, OTC medications, medical devices | 5% | Effective September 2025 (was 10%) |
| All other taxable supplies | Electronics, clothing, services, software | 10% | Default standard rate |
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