By KHRISNA RUSSELL
Deputy Chief Reporter
FINANCE Minister K Peter Turnquest suggested the government was blindsided by the European Union’s decision to blacklist the country for being a tax haven, adding it was “disappointed” to learn of the move in light of having been engaged with the European Union on listing criteria as late as last week.
He said last December, the Bahamas signed onto the inclusive framework for the implementation of the Base Erosion Profit Shifting initiative with the the Organisation for Economic Co-operation and Development (OECD).
This was to solidify the Bahamas’ international commitment to comply with measures to avoid tax planning strategies used by multinational companies to exploit gaps and mismatched in tax rules to artificially shift profits to jurisdictions where there is low or now actual economic activity.
The decision, taken by EU tax experts, is expected to be endorsed by EU finance ministers at a regular monthly meeting on Tuesday, when the 28 EU governments are also expected to delist Bahrain, the Marshall Islands and Saint Lucia, CNBC has reported.
“The Bahamas is disappointed to have learned that the EU Code of Conduct Group (COCG) will be making a recommendation to the Council of the European Union next week to include The Bahamas on the EU List of non-cooperative jurisdictions for tax purposes,” the deputy prime minister said this evening in a press statement. “Throughout this process, The Bahamas has consistently been engaged with the OECD and the COCG on the EU listing criteria – including as late as last week. Therefore, this latest move is particularly surprising to us.
“In December 2017, The Bahamas signed onto the Inclusive Framework for the implementation of the Base Erosion Profit Shifting (BEPS) initiative with the OECD. This solidified our international commitment to comply with measures to avoid tax planning strategies used by multinational companies to exploit gaps and mismatches in tax rules to artificially shift profits to jurisdictions where there is low, or no actual economic activity. As of March 2018, a total of 113 countries and territories have joined the BEPS inclusive framework.”
The statement continued: “The Bahamas has taken immediate steps to reiterate its commitment to the European Union with respect to the non-facilitation of offshore structures and arrangements in the jurisdiction aimed at attracting profits without real economic substance for the purpose of profit shifting. Legislation is currently being drafted to give effect to the implementation of the BEPS minimum standards and to address gaps in our current regulatory regime identified by the COCG. We anticipate that this legislation will be laid in the House of Assembly by April 2018.
“Discussions were held today with the COCG represented by the Chair supported by the General Secretariat of the Council and assisted by the EU Commission, responding to their specific concerns, followed by formal letter. We believe the discussions were positive and remain hopeful that our efforts to address their concerns will result in the favourable consideration of The Bahamas as a cooperative tax jurisdiction.”
He said the government will continue to demonstrate its commitment to international regulatory standards and initiatives thereby ensuring that the Bahamas remains a clean, compliant and cooperative jurisdiction.
This comes after a CNBC report circulated that the Bahamas along with the US Virgin Islands and St Kitts and Nevis are set to be added next week to an EU blacklist of tax havens.
The decision, taken by EU tax experts, is expected to be endorsed by EU finance ministers at a regular monthly meeting on Tuesday, when the 28 EU governments are also expected to delist Bahrain, the Marshall Islands and Saint Lucia, CNBC said.
As a result of both moves, the news agency said, the blacklist would maintain nine jurisdictions deemed to facilitate tax avoidance. The other six are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.