Since 1998, the Organisation for Economic Cooperation and
Development ("OECD") has led a charge against
"harmful tax practices", with a primary emphasis on the
promotion of the exchange of information on economic matters,
including financial and tax matters. In affirming its commitment to
improving cross-border cooperation, the government of The Bahamas
on 4 August 2011 signed a Tax Information Exchange Agreement
("TIEA") with the Republic of Korea ("The Bahamas-
Korea TIEA"). This brings the amount of TIEAs to which the
Bahamas is party to twenty-five (25). The Bahamas-Korea TIEA marks
The Bahamas' fourth with a major Asian economy, with the first
three being the Republic of China, India, and Japan.
The Bahamas now has TIEAs with eighteen (18) OECD member
countries (i.e. Finland, Denmark, Sweden, Belgium, New Zealand,
Iceland, Norway, Germany, the United States, the United Kingdom,
Canada, the Republic of China, Japan, Australia, Argentina, France,
Mexico, and Korea) and ten (10) with members of the G-20 (i.e. the
United States, the United Kingdom, Canada, the Republic of China,
Japan, Australia, Argentina, France, Mexico, and Korea).
The Bahamas-Korea TIEA applies to existing taxes of every kind
and description imposed on behalf of either country. It does not
apply to taxes imposes by states, municipalities, or other
political subdivisions or possessions of the Republic of Korea.
Nonetheless The Bahamas-Korea TIEA is not an automatic information
exchange between the two, and like other TIEAs entered into by The
Bahamas, is by request only. Information will never be exchanged
aimlessly or arbitrarily. Specific guidelines and criteria by which
Korea must submit a request for information to the Bahamas are
provided for in the TIEA. These guidelines and criteria provide
expressly that all requests must be validly made and relevant to
the matter at hand. All requests must be set forth with
specificity, detailing the nature of the information being
requested and the substance of the evidence to support the
The signing ceremony took place in Washington, DC with
Ambassador CA Smith, United States Ambassador for The Bahamas to
the United States, and Ambassador Duck-soo Han, Ambassador for the
Republic of Korea to the United States and The Bahamas. By signing
the TIEA, the government of The Bahamas has shown its willingness
to meet evolving OECD standards with respect to transparency of tax
affairs and the exchange of information.
TIEAs are also expected to be signed between The Bahamas and
Aruba and The Bahamas and the States of Guernsey.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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