Belize taxation: Belize taxes for American expats

Understanding Belize taxation is crucial for American expats planning to work, retire, or invest in the country. Belize follows a territorial tax system, meaning only locally sourced income is taxed. There is no capital gains tax and property taxes are relatively low.

However, US citizens and green card holders living in Belize must still meet their US tax obligations, as the United States taxes its citizens worldwide.

This guide will help you navigate Belize’s tax system and ensure compliance with both Belizean and US tax laws.

Overview of Belize

Overview of Belize taxation

Belize operates a territorial tax system, meaning foreign-source income is generally not taxed.

Expats in Belize benefit from low real estate taxes and competitive corporate tax rates. As an investor, you can explore various investment strategies without the burden of capital gains taxes, as Belize has no capital gains tax.

Belize is also an attractive option for retirees due to its Qualified Retirement Program (QRP), which offers financial privacy and low taxation. The QRP allows retirees to import certain goods exempt from import tax during the first year of participation and offers other tax benefits.

While Belize has been historically known as a tax haven, the government has introduced reforms to comply with global financial regulations and combat tax evasion, ensuring continued appeal as a tax-efficient jurisdiction.

Tax residence in Belize: Who has to pay?

Belize has different tax rules for its residents and non-residents.

Belize residents

To be considered a tax resident in Belize, you must spend at least 183 days in the country within a tax year. Tax residents are taxed only on Belize-sourced income and must file a tax return if their taxable income exceeds the annual threshold.

Belize non-residents

Non-residents are also taxed only on Belize-sourced income and are not subject to tax on foreign earnings. Non-residents earning income from Belize – including employment, business, rental, or investment income – must file a tax return.

Belize income tax 2025

Belize applies a flat 25% personal income tax (PIT) on earnings exceeding BZD 26,000 (approximately USD 13,000). Income below this threshold is tax-free.

This system provides a tax-free allowance for lower-income individuals while maintaining a straightforward tax structure for higher earners. Expats and residents should ensure compliance with local tax laws, particularly if they have additional income sources within Belize.

Americans abroad must file their US tax return with the Internal Revenue Service (IRS) in addition to their Belize income tax return, if applicable.

Other taxes in Belize

Belize property tax

Belize real estate taxes are managed by City Councils and Town Boards in each district. For example, in the City of Belmopan, the property tax rate is 2% of the assessed value.

Corporate tax

Businesses and self-employed individuals in Belize pay corporate income tax (CIT) ranging from 1.75% to 19%, depending on the industry. For example, real estate businesses are taxed at 1.75% on gross receipts, while commissions are taxed at 15%.

Employment income should not be combined with business receipts for tax purposes – each requires a separate tax return.

Offshore companies that do not conduct local business are generally exempt from corporate tax.

Sales tax in Belize

Businesses with an annual turnover of $75,000 or more must register for general sales tax (GST), which is set at 12.5%. If a business has been operating for less than 12 months but averages $6,250 per month in taxable supplies, GST registration is also required.

Self-employment tax in Belize

Self-employed individuals pay business tax based on their industry. For example, tour guides are taxed at 1.75%. Some income levels may qualify for reduced rates or exemptions.

Social security in Belize

All employees aged 14 to 65 must contribute to Belize’s social security system, based on their income. These contributions fund pensions, disability benefits, and maternity leave. More details can be found on the Belizean social security portal.

Estate and inheritance taxes in Belize

Belize does not impose estate or inheritance taxes, making it a favorable destination for retirees and investors.

The tax treaty between the US and Belize

There is no tax treaty between the US and Belize. However, Belize’s territorial tax system ensures that only locally sourced income is taxed, reducing the risk of double taxation for US expats.

Totalization Agreement between the US and Belize

Belize and the US do not have a Totalization Agreement, requiring self-employed expats to contribute to both countries' social security systems.

This can lead to higher tax burdens, making strategic planning essential to minimize excessive contributions while maintaining eligibility for retirement benefits in both Belize and the US.

Filing a tax return in Belize

When to file a tax return

Income tax returns in Belize are due by March 31 of the following year. Employees usually have taxes deducted at the source, while self-employed individuals and businesses must file separate returns.

Business tax returns must be filed by the 15th of each month, covering all receipts from the previous month.

Penalties for late or incorrect filing

Late tax filings can result in fines and penalties on unpaid taxes. If a balance remains after March 31, a 1.5% monthly interest is applied until full payment is made. Businesses that fail to remit GST or business tax on time may also face fines and interest charges.

Failure to file a tax return can result in a minimum fine of $10,000 or up to two years of imprisonment.

Most popular tax forms for US expats

US expats in Belize may need to file several tax forms, including:

• Form 1040 – The standard income tax return required for all US citizens, regardless of location. The typical filing deadline is April 15, but expats receive an automatic extension to June 15.
• Form 8938 (FATCA report) – Required if foreign assets exceed $200,000 on the last day of the tax year or $300,000 at any point ($400,000 and $600,000 for married taxpayers filing jointly).
• Form 2555 (Foreign Earned Income Exclusion – FEIE) – Allows expats to exclude up to $126,500 (2024 limit, adjusted annually) of foreign income from US taxes.
• FBAR (FinCEN Form 114) – Required if the combined value of foreign bank accounts exceeds $10,000 on any day during the tax year. It must be filed separately from your tax return.

Failure to file these forms may result in significant penalties. For expert tax assistance, contact Taxes for Expats.

Belize tax forms for US expats

American expats residing in Belize may need to file several tax forms to comply with local regulations:

• Employee Income Tax Return (Form BTS203): All individuals receiving income in Belize must file this annual return.
• Business Tax Return (Form BT135): Self-employed individuals and business owners are required to submit this monthly return, detailing gross receipts and associated taxes.
• General Sales Tax (GST) Return (Form BTS210): Businesses registered for GST must file this monthly return, reporting taxable sales and GST collected.

All forms can be accessed through the Belize taxation portal.

Are you a US expat living in Belize or planning to move there? Let Taxes for Expats take the stress out of managing your US tax obligations. We offer customized advice to ensure you're well-informed and compliant with your tax responsibilities.

If you need a US tax accountant, our experienced team is ready to assist. Schedule your initial consultation today and let our experts guide you through the process with confidence.