Nassau hotel tax 2026: 10 percent VAT on the room and on the levies too

The rate

A Nassau hotel room is taxed at 10 percent in 2026. There is no separate hotel guest tax any more; value added tax replaced it. The Department of Inland Revenue states on its VAT page that "Two rates of VAT are applied which is the standard rate of 10% and a zero rate of 0%", and hotel accommodation falls under the standard rate.

The extras are taxed as well

This is where a Bahamas folio surprises people. The department's guidance on holiday accommodation and the tourism industry puts the surcharges inside the VAT base rather than outside it. It names administration and service charges, including mandatory service charges, and the resort levy, and says these "are also subject to VAT at the standard rate". On the promotion board levy it answers its own question directly: "Output VAT should be reported on promotion board levy as it forms part of the overall taxable income of the hotel." Energy surcharges, laundry and telephone are treated the same way.

A worked example

A room at US$300 per night for five nights is US$1,500. VAT at 10 percent is US$150. If the property adds US$100 of resort and promotion board levies across the stay, those are taxable too, adding US$10, so the bill carries US$160 of VAT on a US$1,600 base.

What is unclear is the size of those levies. The government guidance confirms they are taxable but does not publish their rates, and the copy of that guidance online still works its examples at the older 7.5 percent VAT rate.

Sources: Department of Inland Revenue, About VAT and VAT Guidance on Holiday Accommodation and the Tourism Industry.

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