The government will be looking at the possibility of introducing income tax in an effort to further comply with the regulations of the Organization for Economic Cooperation and Development ( OECD).
Prime Minister Dr. Hubert Minnis revealed in the House of Assembly yesterday that the Bahamas has been saved from the threat of being blacklisted after The Bahamas was invited to the coordinating body of the (OECD) multi-lateral convention, but this comes with concerns.
“The group advised that the absence of a corporate income tax or a nominal corporate tax structure in The Bahamas is a matter of concern and the lack of substance of some legal arrangements was highlighted,” Dr. Minnis said.
The Prime Minister said those issues were being looked into and a plan of action will be formulated to allow the Bahamas to remain off the OECD blacklist.
Dr. Minnis said the assistance of professionals in the financial sector was solicited in an effort to address the regulatory group’s concerns.
The OECD’s multi-lateral convention is a freestanding multi-lateral agreement aimed at promoting international cooperation for the better operation of tax laws.
Deputy Prime Minister and Minister of Finance Peter Turnquest and Minister Of Financial Services Brent Symonette left the country for Paris, France with the purpose of signing the multilateral convention, but were invited to San Marino where they signed another regulatory convention.
“One of the areas of the European Union’s (EU) Base Erosion and Profit Shifting (BEPS) initiative was that of The Bahamas becoming a signatory to the OECD convention in tax matters (MAC) and the companion multilateral competent authority agreement (MCAA),” Dr. Minnis said.
The Prime Minister stressed that despite the significant progress made to date, there’s still much to be done to mitigate other pending threats to the local financial services sector.
“Following receipt of a letter on November 7th 2017, forwarded to the government from the BEPS Code of Conduct Group, advising that the country had been govern a reprieve from blacklisting by the EU until February 2018, a series of industry briefing meetings were sponsored by the Ministers of Finance and Financial Services and the Office of the Attorney General, with the assistance of the CRS working group, senior officials and regulators, to focus on the issues listed in the letter. A letter was signed on the 11th of December 2017, and issued by the Ministry of Finance to the OECD Code of Conduct Group confirming that the Bahamas commits to complying with the minimum standards,” Dr. Minnis said.
Those minimum standards involved the prevention of the harmful nature of preferential tax regimes and a transparency framework that will apply to tax rulings, an action on treaty abuse, prevention of tax-treaty shopping, country by country reporting and other documentation requirements to give tax administrators a global picture of where multinational enterprises profit.
Just last week, several Caribbean countries were named on the European Union’s blacklist of tax havens including Barbados, Grenada, Panama, Saint Lucia, and Trinidad and Tobago who are all at risk to losing access to EU funds.
