Bahamas tax system receives favourable OECD review
NASSAU, Bahamas, Thursday April 14, 2011 – The Bahamas tax system has been given a favourable review by the Organisation for Economic Cooperation and Development’s (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes.
However, according to a release issued this Thursday morning by the government of The Bahamas, the territory’s legal and regulatory framework for transparency and effective exchange of tax information was found to be fully compliant with all elements of the Global Forum's standards, except of one – its standards for accounting records.
According to the statement, the OECD Global Forum’s report on the Phase 1 review of The Bahamas tax system called for greater clarity in the law with respect to the obligation on certain legal entities and arrangements to maintain accounting records. It recommended the implementation of express obligations in the law requiring all relevant entities and arrangements, including companies, trusts, partnerships, and foundations, to maintain reliable accounting records, including underlying documentation, for a minimum five-year period.
The government said that it had noted the findings of the report and would be taking “the necessary remedial actions” including amending relevant sections of its legislation to address the matters raised.
Otherwise, the Global Forum determined that The Bahamas had the necessary legal and regulatory framework in place to ensure the availability of ownership, identity and banking information; along with the requisite access to that information by The Bahamas’ Competent Authority.
Importantly, the report also stated that The Bahamas had adequate mechanisms in place to allow for exchange of information with relevant partners given that the territory has entered into 23 new tax information exchange agreements (TIEAs) since September 2009.
Included in its steps to bring all parts of the TIEAs into force, The Bahamas implemented enabling legislation in the form of the International Tax Cooperation Act, which was passed on 1st July 2010.
According to the statement, the Phase 1 review of The Bahamas was undertaken over the period July 2010 to March 2011 with the active cooperation and participation of the Ministries of Finance and Foreign Affairs, the Office of the Attorney-General, the Financial Services Regulators and the Registrar of Companies. The Phase 2 review, which will assess the practical implementation of the standards, is scheduled for July 2012.
Neighbouring international financial centres Barbados and Trinidad and Tobago have yet to advance to the Phase 2 review level having fallen short in some critical areas identified by the Global Forum peer review process. Last month, Barbados amended the regulations to its Income Tax Act to bring it into compliance with the recommendations in its country report by the Global Forum.
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