The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The deputy prime minister yesterday hailed the “great progress” The Bahamas is making in playing its part to fight corruption, financial crimes and tax evasion.

K Peter Turnquest told the House of Assembly that this nation had to continue demonstrating its commitment to tax transparency and co-operation, along with tax information exchange.

Addressing Parliament on changes to the Automatic Exchange of Financial Account Act and the Multinational Entities Financial Reporting Act, he said The Bahamas must continue to pay attention to both “shifting goal posts” and recommendations from bodies such as the Organisation for Economic Co-Operation and Development (OECD).

“We must bear in mind that our legislation will always come under scrutiny and assessment via international organisations and, in circumstances where The Bahamas is required or recommended to amend its laws to provide an enhanced regulatory framework for the country’s financial services industry, I am of the view that we should do so,” Mr Turnquest said.

“This would demonstrate that The Bahamas, as a well-renowned, regulated international financial centre, understands and is able to adapt to the ever-changing global landscape in which it operates.”

Mr Turnquest added: “The Bahamas has always co-operated with its international partners in the area of tax transparency and the exchange of information for tax purposes via MLATs (Mutual Legal Assistance Treaties) and Tax Information Exchange Agreements (TIEAs).

“The Bahamas intends to continue co-operating in this manner, showing that it will not be a place where persons or entities can evade taxes and or hide illegal or illicitly-gained wealth. The amendments to the Acts will not have a grave impact on the financial institutions and entities operating in The Bahamas.”

“We are aware of the G-20’s mandate with respect to tax transparency and exchange of information for tax purposes; we are aware of the challenges adhering to international standards places on a country’s resources. However, the positive aspects of co-operating with international partners and implementing international best practices will be reflected in The Bahamas’ effective financial regulatory regime and securing its seat as the major premier international financial centre.”

Referencing the Automatic Exchange of Information Act reforms, Mr Turnquest said yesterday’s Bill enables The Bahamas’ Competent Authority to automatically exchange financial account Information with counterparts in a partner country.

He added that the Automatic Exchange of Information Act (Amendment) Bill 2019 is intended to amend Section seven of the existing Act to change the period of time for which a reporting financial institution is required to keep records from a minimum five to six years to bring The Bahamas into line with the OECD’s Common Reporting Standard (CRS).

“At present, the current legislation is aligned with the FATF (Financial Action Task Force) requirement, but not in compliance with the Common Reporting Standard,” Mr Turnquest said. “The Bahamas is now in its second year of reporting under the Common Reporting Standard and the Automatic Exchange of Information Act, and we are under an obligation to ensure that The Bahamas’ legislation is consistent with the Common Reporting Standard and, secondly, The Bahamas’ reporting financial Iinstitutions are in full compliance with the Common Reporting Standard.”

Turning to the Multinational Entities (MNEs) Financial Reporting Act 2018, Mr Turnquest said it provides for Bahamian entities that are a part of such a group to report to the Competent Authority (the Ministry of Finance) on aggregated accounting information.

“Section 5 of the principal Act sets out the finite details of the contents of the country-by-country Report in which MNEs are to report to the Competent Authority. Under Section 5(3) of the Act, the report shall be filed no later than 31 March, 2019, with respect to the reporting fiscal year that began on or before 31 May, 2018. This means that, for certain fiscal years, MNE groups may not be in a position to file a report since their fiscal year would not yet have ended,” Mr Turnquest explained.

“The Multinational Entities Financial Reporting Amendment Bill 2019 seeks to amend the restrictive timeframe for the filing of a country-by-country report... By removing [a] portion of Section 5(3), all companies will be allowed to file the country-by-country report 12 months after their fiscal year end regardless of when the fiscal year ends, thus allowing equal footing under the law.”