NASSAU, Bahamas, CMC – The Bahamas government has criticized the European Union for relying on outdated information to keep the Caribbean Community (CARICOM)on a list of countries regarded as “non-cooperative jurisdictions for tax purposes.
The EU Tuesday named Belize and Antigua and Barbuda as the latest Caribbean Community (CARICOM) countries to its list. In addition, the EU added Seychelles to the list while simultaneously removing the British Virgin Islands (BVI), Costa Rica, and the Marshall Islands from the list.
The EU said that apart from the new additions, the other Caribbean countries included in its 16 non-cooperative jurisdictions are Anguilla, Bahamas, Trinidad and Tobago, Turks and Caicos Islands.
“The Council regrets that these jurisdictions are not yet cooperative on tax matters and invites them to improve their legal framework to resolve the identified issues,” the EU said in a statement.
But Nassau said the EU’s determination was based on the recommendation of the Organization for Economic Cooperation and Development()OECD) The Forum on Harmful Tax Practices (FHTP) meeting was held in April 2023 before many of its reforms for economic substance were implemented.
The Ministry of Finance statement said the FHTP will meet again at the end of this month and that the government “is cautiously optimistic for a favorable review by the FHTP.
“The EU will consider a favorable review by the FHTP at the end of the month in their February 2024 meeting. The Bahamas government has and continues to do everything it can to address compliance with the economic substance regime.
“The Bahamas government has made considerable progress over the last year, and this is reflected in the non-compliance on the BEPS (base erosion and profit shifting) Action 13 country-by-country reporting being removed from the EU’s determination.”
Attorney General Ryan Pinder had said in August that the government was in the testing phase of its new economic substance reporting portal and has begun onsite inspection of financial firms and other entities within the ambit of substance reporting, having issued fines after 30 or so inspections thus far.
The full launch of the portal was due to take place last month.
Pinder said the government was “rather disappointed but not surprised” that the country was still on the blocklist.
“We fully expect to have a favorable review by the Forum for Harmful Tax Practices and, by the end of this calendar year, will have revised recommendations from the Forum, which the EU will consider in its February meeting.
“I am cautiously optimistic that we have done everything in our power and complied with the recommendations of the Forum on Harmful Tax Practices, and they will have a favorable review of us later this month.”
Pinder said The Bahamas is in contact with the OECD Forum and the EU’s Code of Conduct Group, the latter leading the “non-cooperative jurisdiction” initiative for the European Union.
The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017. It is part of the EU’s external strategy on taxation and aims to contribute to ongoing efforts to promote tax good governance worldwide.
Jurisdictions are assessed based on a set of criteria laid down by the Council. These criteria cover tax transparency, fair taxation, and implementation of international standards to prevent tax base erosion and profit shifting. The chair of the code of conduct group conducts political and procedural dialogues with relevant international organizations and jurisdictions, where necessary.
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