By Llonella Gilbert
Bahamas Information Services
The Bahamas has no choice but to comply with international tax information exchange standards if it is to avoid 'blacklistings' and other negative impacts for the financial services sector.
K P Turnquest, the Deputy Prime Minister, told a Securities Commission industry briefing that the Bahamas had implemented numerous legislative reforms to ensure it kept pace with global standards.
"We must protect our sector from the fall-out of blacklisting, and we want to be singled out for markers such as excellence in service, being business friendly, and product innovation - not for being a place to hide or launder illicit funds of any kind. Undoubtedly, this will impact reporting requirements and hence compliance costs in most, if not all, financial institutions,"he acknowledged.
As the Bahamas moves to comply with the multilateral approach to automatic tax information exchange under the Common Reporting Standard (CRS), Mr Turnquest added: "We simply cannot afford, nor do we wish to have, the reputation of being the 'last tax haven standing', as the head of the OECD's Global Forum Secretariat on transparency and exchange of information for tax purposes, Monica Bhatia, referred to the jurisdiction prior to the Government's commitment to the multilateral approach."
According to an OECD report in June 2017, some 101 jurisdictions have committed to implementing automatic tax information exchange by 2017 or 2018.
The initial standard was exchange of information upon request, Mr Turnquest, which the Bahamas facilitated through Tax Information Exchange Agreements (TIEAs).
"These involved, among other things, ensuring reliable accounting records were maintained and accessible, and that the beneficial owners of entities, structures and legal arrangements were identified and properly maintained," he added.
"The legislative initiatives included the International Tax Cooperation Act 2010, which facilitated the implementation of international tax agreements and tax information sharing under those agreements.
"The Government also implemented a series of legislative amendments, including amendments to the International Business Companies (IBC) Act, the Partnership Limited Liability Act and the Segregated Companies Act, amongst others, in 2011, and the IBC Accounting Records Order of 2016, to meet the information exchange standards. After having undergone the Global Forum's most recent review - the Phase 2 review, the jurisdiction is assessed as largely compliant."