Everything US Expats Need to Know About Taxes in Belize
- Living as an Expat in Belize
- Belize at a Glance
- US Expat Taxes in Belize
- Who has to File Taxes in Belize?
- Determining Residency in Belize
- Income tax in Belize
- Other Tax Situations in Belize
- Do the US and Belize have a Tax Treaty?
- Does Belize have a Totalization Agreement with the US?
- What Tax Forms do US expats in Belize need to file?
- Navigating Tax Compliance for US Expats in Belize
Living as an Expat in Belize
Known as one of the great diving spaces in the world, thanks to Jacques Cousteau, Belize has been a desirable destination for US expats for generations. But beyond the stunning reefs and deep blue waters, it’s still essential to understand Belize taxes for US expats when living in this gorgeous country.
Calculating your taxes can be tricky — especially when you have to calculate your US and Belize taxes. But we’ll help by walking you through everything you need to know about expat taxes in Belize in this guide:
Belize at a Glance
- Primary Tax Form for Residents: BTS203 – Income Tax Return for Employees
- Tax Year: January 1st to December 31st
- Tax Deadline: March 31st of the subsequent tax year
- Currency: Belize Dollar (BZD)
- Population: 408,000 (as of 2021)
- Number of US Expats: Approx. 1,000
- Capital City: Belmopan
- Primary Language: English
- Tax Treaty: No
- Totalization Agreement: No
US Expat Taxes in Belize
As a US expat living in Belize, it’s important to understand your tax obligations. Here’s what you need to know about US expat taxes in Belize.
First and foremost, as a US citizen or resident, you are required to file a US tax return every year, regardless of where you live or work. This means that you’ll need to report your worldwide income to the Internal Revenue Service (IRS), even if you earn all of your income in Belize.
In addition to your US tax obligations, you may also be required to file a tax return in Belize. Belize has a territorial tax system, which means that you are only taxed on income earned within Belize. If you earn income from a source outside of Belize, it is generally not subject to Belizean taxes.
Who has to File Taxes in Belize?
In Belize, the tax system is based on a territorial principle, which means that individuals are only taxed on their income earned within the country. However, there are still certain individuals who are required to file taxes in Belize.
If you are a resident of Belize, you are generally required to file a tax return if you have taxable income that exceeds the annual threshold. Taxable income includes income from employment, business or self-employment, rental income, and investment income.
Non-residents who earn income from Belize are also required to file a tax return. This includes individuals who earn income from employment or business activities in Belize, as well as those who earn rental or investment income from Belizean sources.
In addition to the above, there are certain categories of individuals who are required to file taxes in Belize regardless of their income level. These include individuals who:
- Are Directors or officers of a Belizean company
- Receive dividends or other distributions from a Belizean company.
- Own property in Belize
- Are beneficiaries of a trust established in Belize
It’s important to note that even if you are not required to file taxes in Belize, you may still need to report certain information to the Belizean tax authorities. For example, if you have a bank account or other financial assets in Belize, you may need to report this information on an annual basis.
Determining Residency in Belize
It’s important to know if you’re a resident of Belize since residents and non-residents have different tax implications. Here’s how to know what your residency status is when living in Belize.
Belize Resident Qualifications
Unless you are born in Belize or marry a resident of the country, you must apply to become a resident here. In order to apply, you must have lived in the country for at least a year — and you must not have left the country for more than 14 days during the past tax year. You’ll also need to demonstrate that you’re financially stable and free of criminal offenses.
You can also apply for temporary residency (which lasts one year) if you have investments in the country worth five hundred thousand Belize dollars or more.
Non-resident Qualifications in Belize
Unless you’ve gone through the residency process and were approved, you’re likely considered a non-resident of Belize. This means you’re only responsible for paying income tax on your non-Belize income. The country will not levy income taxes on foreign-earned income.
Income tax in Belize
Both residents and non-residents will pay a flat income tax rate of 25% on taxable income. If you make under $26,000 BZ, you’re exempt from income tax.
Other Tax Situations in Belize
Individuals who are self-employed in Belize will need to declare a weekly estimated income to cover Social Security tax. Taxes are calculated at a 7% rate. Though this is a weekly contribution, you can make payments monthly.
Companies in the oil industry pay a 25% flat tax rate on all profits. Other companies will pay business tax at a set rate, depending on their profits.
In Belize, you’ll pay a value-added tax (VAT) when buying goods or services. Belize has a flat VAT rate of 12.5%.
There is no wealth tax in Belize.
There is no inheritance tax in Belize.
There is a flat 12.5% property tax on rented properties and a 2% property tax on vacant properties in Belize.
Belize employees and employers are both on the hook for Social Security taxes. Contributions are based on your weekly income amount. You can view the current contribution levels on the Belize Social Security website.
Do the US and Belize have a Tax Treaty?
Belize does not have a Tax treaty with the US Although many countries have a tax treaty with the US, Tax treaties can help protect US citizens and residents from paying double taxes on the same income.
Does Belize have a Totalization Agreement with the US?
No, Belize does not have a totalization agreement with the US. A totalization agreement helps protect you from paying double Social Security contributions — in this case, contributing to both US and Belize Social Security funds. Since a totalization agreement doesn’t exist, US expats in Belize are on the hook to pay into both countries’ Social Security funds.
What Tax Forms do US expats in Belize need to file?
If you are a US expat living in Belize, the IRS requires you to file certain tax forms each year. The specific forms you’ll need to file will depend on your individual circumstances, such as your income, assets, and the types of accounts you hold.
In general, most US expats in Belize will need to file a US tax return using Form 1040, along with any necessary schedules and attachments. You may also need to file additional forms, such as the Foreign Bank Account Report (FBAR), if you have foreign financial accounts with a total value exceeding $10,000 at any point during the year.
Additionally, if you have foreign investments, you may need to file Form 8621 for passive foreign investment companies (PFICs). And if you are a business owner or self-employed, you’ll need to file additional forms related to your income and expenses.
Americans living abroad in Belize need to file both Belize taxes and US taxes. You can file your Belize tax return with Form BTS203 – Income Tax Return for Employees. There are two versions — one for printing and mailing to the Belize Tax Service (BTS) and one to file online.
As a US expat in Belize, it’s important to note that the tax year follows the same schedule as the US (January 1 – December 31). To avoid penalties and other consequences, be sure to file your income taxes by March 31 of the subsequent tax year. Stay informed and up to date on your tax obligations to ensure compliance.
Navigating Tax Compliance for US Expats in Belize
Looking for tax advice as a US expat living in Belize? Our comprehensive guide has got you covered. If you have any lingering questions about your tax liability, residency status, or how to file taxes in Belize, Greenback Expat Tax Services is here to help. Our team of tax experts provides personalized guidance and support to ensure you meet your tax obligations with ease.
Contact us, and one of our customer champions will gladly help. If you need very specific advice on your specific tax situation, you can also click below to get a consultation with one of our expat tax experts.