There is no requirement for an IBC to be audited if the annual income threshold is not exceeded. In accordance with the provisions of Section 32A of the Income and Business Tax (Amendment) Act (2018), an audit of financial statements and filing of an audit report is required for an international business entity if the annual income of such entity exceeds 6 000 000 USD and at least two conditions from the list below are met:
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On 1 January 2019, Belize, like a number of other offshore jurisdictions, substantially changed legislation in respect of International Business Companies (IBCs). In particular, the Economic Substance Act was adopted and substantial changes were made to the Income and Business Tax Act setting out obligations to pay a tax.
In accordance with the Belize Accounting Records (Maintenance) Act, the main regulatory legal act in the field of accounting and financial reporting, all source documents and accounting records must be kept in the place of the company’s registration, in the agent’s office in Belize or outside Belize by resolution of the company’s director or another competent party (Section 3 of the Belize Accounting Records (Maintenance) Act).
Companies must keep all source documents and accounting records during at least 5 years after the date of making the transaction, closing the account or ending business relations (Section 6 of the Belize Accounting Records (Maintenance) Act).
Belize does not have national accounting standards, so companies can make financial statements in accordance with the International Financial Reporting Standards (IFRS) or US GAAP.
Changes in tax legislation set the obligation to obtain a tax identification number (TIN) and to annually file a tax return for all IBCs, which also resulted in the obligation to file financial statements.
IBCs are not required to audit financial statements if they do not exceed the set threshold of annual income. In accordance with Section 32A of the Income and Business Tax (Amendment) Act (2018), audit of financial statements and filing of an auditor’s opinion are required from international business companies if their annual income exceeds 6 000 000 USD and at least two of the below conditions are met:
The deadline for filing an annual tax return along with financial statements and an auditor’s opinion (if necessary) is 31 March of the year following the reporting period.
Besides financial statements, companies must file economic substance reports. According to the Economic Substance Act, annual filing of the reports must be done within 9 months following the reporting period. Reports shall be filed through the registered agent; their form depends on the result of activity qualification:
Failure to comply with provisions of the Belize Accounting Records (Maintenance) Act, including non-fulfilment of the obligation to keep source documents and accounting records, results in a penalty not exceeding 10 000 USD and revocation of the license to conduct activity and the certificate of incorporation of the company.
Liability for late filing or evasion of filing of a tax return along with financial statements is a fine of 10% of the amount of the tax payable according to this return, but not less than 10 USD. A fine can be charged for a 24-month delay.
In the case of a group of companies where the parent company is resident in Belize, consolidated financial statements shall be made.
Consolidated financial statements can be made in accordance with the International Financial Reporting Standards.
Under a new law enacted at the end of 2022, Belize has introduced an obligation for companies to file an Annual Return, which provides information on the structure of the company and its operations.
The report must be filed by June 30th of each year.
To file the Annual return, a declaration must be completed, which includes the following information:
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