By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Sandals is disputing the addition of five of its Exuma properties to the Department of Inland Revenue’s (DIR) latest auction listing - which appears to have been done by mistake.

The resort issued a statement noting that the properties were listed due to “inaccurate records” by DIR and the mistake will be rectified by the department.

“We are aware of recent media reports suggesting that private properties owned by Sandals in Exuma are slated for auction. We wish to state categorically that is an error stemming from inaccurate records at the Bahamas Department of Inland Revenue,” said Sandals.

“We have been assured that the mistake will be rectified and no bids for these properties will be accepted by the Department of Inland Revenue.”

The company said it remains “fully committed” to the country and will continue to “invest heavily” in the region.

“Sandals remains fully committed to The Bahamas. We continue to invest heavily in the region and look forward to building on our long-standing partnership.”

The Department of Inland Revenue began exercising its power of sale under section 25 (a) of the Real Property Tax last year in a bid to recover more than $700m in delinquent real property tax arrears. It is using the lien, or charge, it has over these properties to sell them via a public auction on June 24, 2025.

Among the properties listed for sale in the notice published on May 12, 2025, are five properties in Exuma all labelled as “Farmers Hill, Sandals Beach Units”. The values of the parcels range from $1.15m to $2.7m, collectively totalling nearly $9.3m.

Last year, Sandals was in a dispute with the DIR following assertions by the tax authorities that its Emerald Bay resort only reported 40 percent of revenues earned.

Melissa John, the Exuma hotel’s financial controller, in a September 8, 2023, letter to the Department of Inland Revenue (DIR) denied the property had failed to properly disclose “the true nature of transactions” which have sparked demands for $30.844m in allegedly unpaid VAT and Business Licence fees combined.

The Department’s audit findings, which covered six years between 2017 and 2022, claimed the tax arrears had arisen because Sandals Emerald Bay and its operator, Clearview Management Ltd, had under-reported gross revenue income for the period by more than $284m.

The dispute, according to documents filed with the Supreme Court, appears to result from the Sandals’ corporate structure and business model. All guest bookings and payments are made to the resort chain’s corporate parent, Sandals Resorts International 2000, and its third-party booking platform and sales agent, Unique Travel Corporation. Both these entities are domiciled in Panama.

Rather than funds flow up the corporate chain, from subsidiaries to parent company, in Sandals’ case the money trail appears to move in the opposite direction - from Sandals Resorts International 2000 to the resort where the relevant guest has booked their vacation.

The crux of the Department of Inland Revenue’s assessment, and eight-figure tax demand, is that Sandals Emerald Bay over that six-year period only declared the net income received from its parent and not the gross sum collectively paid by tourists to stay at the Exuma property. As a result, the resort both under-reported and underpaid VAT and Business Licence fees for that period.

Arguing that Sandals Emerald Bay had breached the VAT Act by making “a false or misleading statement” in filing incorrect returns, the Department of Inland Revenue added: “In filing the returns for Clearview Management, you have reported taxable supplies of $190.768m compared to the calculated revenue of $474.919m.

During a press briefing at the Office of the Prime Minister in August, acting director Shunda Strachan revealed there were large enterprises like Sandals that owe government in taxes, but could not say how much is owed. However, she maintained the plan is to still pursue the resort for $30.8m in back taxes.