Finance Minister K Peter Turnquest.
By YOURI KEMP
Tribune Business Reporter
ykemp@tribunemedia.net
The Netherlands yesterday demanded that The Bahamas implement a corporate income tax at 9 percent or higher as the price to escape tax non-cooperation “blacklist”.
K Peter Turnquest, deputy prime minister, told Tribune Business in response to the demand from the Netherlands’ ministry of finance that The Bahamas “will not be dictated to be any foreign state” as to its taxation policy and structure.
His comments came after a Dutch finance official, responding to this newspaper’s inquiries, said its tax blacklist criteria is “made up differently” from that of the 27-nation European Union (EU), of which it is a member. The Bahamas was this week removed from the bloc’s monitoring ‘grey list’ after being deemed to have fully implemented all the reforms required to address its demands.
However, The Bahamas remains on the national blacklists of both France and the Netherlands, and is unlikely to be removed from the latter’s any time soon. The Dutch official said: “A country/jurisdiction gets a place on the Dutch list when there either is no corporation tax or a corporation tax rate that is lower than 9 percent.
“This is the case in The Bahamas, and therefore The Bahamas is - and stays on - the Dutch list. We make up this list every year and the end of a year. A country/jurisdiction can only get from the list if the corporation tax rate is a 9 percent or above.”
The Dutch position adds to the building pressure on The Bahamas and other low or zero-rate tax international financial centres (IFCs) to consider introducing a low-rate corporate income tax. The Organisation for Economic Co-Operation and Development (OECD) is pushing for a “minimum level of” taxation to combat tax evasion by multinationals - a corporate tax in all but name.
Mr Turnquest, acknowledging such pressures yesterday, told Tribune Business: “We are a sovereign territory and, as a result, we have the right to determine our tax structure, and we will consider international standards.
“To the extent that the international community rises to a minimum tax rate, we will consider that and, if we wish to adjust our system, to reflect that. But to this point we are willing, and we have demonstrated that we co-operate with all international partners on tax matters. We will not be dictated to by any foreign state.”
Mr Turnquest added: “To be clear, the AG (Carl Bethel, the attorney general) is requesting a bilateral with the Netherlands today to discuss areas of mutual understanding and consensus. While the international community seems to be moving towards a minimum global corporate tax rate, that is not the current standard and, as such, ought not be the standard by which any country blacklist and thereby harms the reputation and economy of another sovereign state.
“The Bahamas, as demonstrated by its commitment and co-operation with the EU and the OECD, and the continued work towards meeting all of the FATF (Financial Action Task Force) criteria, shows that it is a partner in the global fight against anti-money laundering and counter-terrorism financing and harmful tax practices.
“We invite all of our partners to engage in fulsome discussion with The Bahamas in respect to their individual concerns, which we are eager to address within the confines of our sovereign right to determine our tax structure, which has been deemed to not be harmful by the Global Tax Forum and now the OECD.”
National blacklists, such as those of France and the Netherlands, are not as harmful as initiatives launched by the likes of the FATF and OECD. However, they do pose a potential reputational risk and deterrent to their citizens and companies doing business with this nation. They also risk encouraging other nations to do likewise.
Comments
proudloudandfnm 4 years, 1 month ago
Tell that little piddly country to mind they own damned business....
Well_mudda_take_sic 4 years, 1 month ago
This 9% income tax rate is being floated by Minnis and Turnquest for public reaction under the guise of the Bahamas all of a sudden needing to somehow get off of a Dutch blacklist that it has been on for many years. The reality of the situation is that Minnis and Turnquest want to introduce this 9% income tax across the board (on all Bahamians and foreigners resident in the Bahamas) because the very corrupt and most incompetent Minnis-led FNM government's modus operandi of governing is: BORROW BORROW BORROW - SPEND SPEND SPEND - THEN TAX TAX TAX.
shonkai 4 years, 1 month ago
As long as the new tax will be an income tax and not a payroll tax as was suggested in the past.
RB242F 4 years, 1 month ago
Can we talk about their Dutch Sandwich tax scheme?
shonkai 4 years, 1 month ago
Just for the heck of it, look up "netherlands tax haven starbucks" on Google.
watcher 4 years, 1 month ago
Just off the top of my head - Netherlands, Ireland, Malta, Luxemburg are all well-known tax havens.
What the heck, just for the fun of it, here's a quick Google search that brings up the Top 10
https://www.investopedia.com/articles...">https://www.investopedia.com/articles...
proudloudandfnm 4 years, 1 month ago
Why do we even care what the Dutch want? Just LOL them and hang up...
bogart 4 years, 1 month ago
Repeared continuous battling....repeated continuous battling...one country after another...years of battling....while banking industry shrinkng many other reasons...200 billion dollars plus exited ....600 plus jobs no more....foreign banks closing right under noses...!!!!
Seems obvious trying to win battle for years...and losing the war...!!!
Banking industry needs to reorganize to grow in light of rapid changes in industry rebranding...instead of other nations and european organizations tying country up knowingly following them....trying to beat existing old horse.
TalRussell 4 years, 1 month ago
The Colony's prime minister just said yesterday that he does not have an issue with the massive increase in the government's globe trotting travel expenses.
Growing numbers China's State and Privately Owned Sectors - among them - Business,Tourism, Industries, Airlines, Banking, Manufacturing and Tech are already experiencing record high free falls of up 92% from the Coronavirus. The Colony's government and businesses - better start NOW taking serious notice - how dangerously close Homeland's economy is edging towards a category 8 free fall?
geostorm 4 years, 1 month ago
Who the hell do they think they are! I don't blame you KB, we will not be dictated to by the Dutch or anyone else for that matter. Nice try though!
joeblow 4 years, 1 month ago
… the EU and OECD have been dictating for more than a decade and we have been jumping through the hoops to please them, that's why they feel bold enough to make demands. Our leaders are idiots!! We need to do what is in our best interest now!
Sickened 4 years, 1 month ago
I will NOT be traveling there this year - just for this.
Millennial242 4 years, 1 month ago
Wow that's such a specific request by the Dutch...hmmm....The Netherlands / The Bahamas....Quick Google Search...
Soooo hmmm, I would be very wary of The Netherlands and anything related to our country's tax regime. Their suggestions would significantly impact a major company in our country, that also has significant interests in their country. What's this really about?
Proguing 4 years, 1 month ago
I will never drink again an Heineken. Sands is much better anyway
Proguing 4 years, 1 month ago
What will they demand next? That our PM runs naked down Bay Street?
Any simple google search will reveal that the Netherlands has been used as the place of choice for multinationals to avoid taxes and that their banks have been used for some massive money laundering. Here is a sample of the headlines:
EU opens in-depth probe of Nike's tax deals in the Netherlands
How the Netherlands Built One of the World’s Worst Tax Havens
Bermuda? Guess again. Turns out Holland is the tax haven of choice for US companies
ABN Amro hit by Dutch money laundering investigation
Dutch bank ING fined $900 million for failing to spot money laundering
Criminals launder €13bn a year in the Netherlands
etc.
joeblow 4 years, 1 month ago
… so when will we begin to ban the import of products from their country?? Personally, I despise French wines anyway!
concerned799 4 years, 1 month ago
What about all the Dutch tax haven activities?
If all the past co-operation has only brought us black lists, perhaps its time to review past regulations and agreements with a view to dialing them back and clearly the promise of "do this and you will not get a blacklist" was clearly a promise that was never kept.
stocktonfuller 4 years, 1 month ago
answer simple: The Bahamas should put the Dutch on a black list.
Porcupine 4 years, 1 month ago
I think we're missing the point. No government, ours included especially, has the interests of its people has a priority. They want to get into power, stay in power, and enrich themselves. If this is not the case, show me how the Bahamian people have truly benefited by any party or politician who has "served" us. Served us, before serving themselves, their families, their political cronies.
banker 4 years, 1 month ago
We could have a corporate income tax rate of 4% and stay out of a lot of trouble with the rest of the world. It is currently at 5.5% in Barbados, and half of the Canadian top 100 companies have an office there. Plus it would add a lot of money to the coffers, and maybe stay the exit of Canadian banks from the Bahamas.
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