The Hon. Peter Turnquest, the Bahamas Deputy Prime Minister and the Minister of Finance, in addressing the regrettable decision by the European Union to place The Bahamas on a list of non-cooperative jurisdictions for tax purposes, has emphasized the country is committed to international tax transparency and cooperation, exchange of information, and international regulatory standards.
"The Government of The Bahamas has a strong and unwavering commitment to the integrity of our financial services industry," said the Deputy Prime Minister. "Business is being conducted in The Bahamas in a fair, transparent and competitive manner, as per the usual and expected standard. As a country we reject the label that we are a tax haven. We are a clean, compliant and cooperative wealth management jurisdiction, providing competitive financial services to high net worth individuals. We compete on the strength of our services and the quality of our professionals."
In the Government's assessment, there was no basis for The Bahamas to be recommended for inclusion on the non-cooperative list. There was a misunderstanding in Brussels about the way communications are handled at the technical level versus the ministerial level in The Bahamas, and a misunderstanding over a fine technical point in the use of contractual language.
Deputy Prime Minister Turnquest has indicated that since the Government's face to face interventions with EU officials in Brussels, it received verbal and written communications stating The Bahamas has no outstanding correspondences or deliverables that should prevent it from being delisted.. Importantly, it should be noted that there were no penalties attached to The Bahamas inclusion on the list. The matter has now been referred to a sub-technical committee of COCG.
Tanya McCartney, CEO and Executive Director, Bahamas Financial Services Board, said "Industry is committed to continued collaboration with the government to ensure that the requisite action is taken to result in our delisting. We know that the government has endeavoured to avoid the current regrettable situation. Nonetheless, we are here and must find a way to strike a balance between the need to address the concerns identified by the EU with the need to remain competitive. We have circulated the Multinational Entities Bill to our members and will be providing feedback to the government as a part of the consultative process. With respect to further initiatives such as the implementation of a corporate tax and the introduction of a beneficial ownership register we stand ready to invest the time and resources to assist with addressing these matters. In all of the current circumstances, we in industry see the opportunity to redefine and position this important sector of the economy for sustainable growth."
The deadline for full compliance with the COCG criteria is December 2018. The Bahamas is completely on schedule to meet that deadline, having already taken concrete steps. In December 2017, The Bahamas signed the Multilateral Competent Authority Agreement (MCAA) and the Multilateral Convention on the Mutual Administrative Assistance in Tax Matters, one of COCG's three main criteria. The Bahamas has already entered the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) and is currently implementing the obligated four minimum standards. We have already adopted the Common Reporting Standard (CRS).
The main outstanding matter is legislation to address Criterion 2.2, which is about ensuring the non-facilitation of offshore structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction. The Government has drafted legislation already and is moving earnestly to satisfy these provisions.
"We realize that our work does not stop here," said the Deputy Prime Minister. "As the industry continues to evolve, The Bahamas will remain vigilant of emerging international standards and best practices on matters that affect its economic, development and financial well-being."
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.