The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Chamber of Commerce's chairman yesterday welcomed the one-month "substance reporting" deadline extension provided to corporate Bahamas but argued that technical challenges remain.

Khrystle Rutherford-Ferguson told Tribune Business that while it was "indeed welcome news" that the Government has extended the Commercial Entities Substance Requirements (CESRA) Act filing to January 31, several obstacles remain to be overcome.

"Notwithstanding the challenges that they had, many companies still tried as best as they could to use the portal and to register. However, there were issues with the portals that presented challenges for them," she said.

"We've been in communication with the Ministry of Finance, we've spoken to the persons concerned and with responsibility for the portal, and expressed some of the challenges that were being faced.”

Mrs Rutherford-Ferguson continued: “One in particular is the tab that's supposed to allow persons to register. What's supposed to happen is if you are a business that is a VAT registrant, you use your VAT portal to register for CESRA.

"Once you go into your VAT portal, there is supposed to be a tab that allows you to register for CESRA as opposed to going through a different mechanism to get an EIN (Employer Identification Number), which would not apply to the Bahamian businesses that are VAT registrants.”

Too often this "substance reporting" registration 'tab' is not present, which businessmen such as Rick Lowe, Nassau Motor Company's director/operations manager, have already complained about to this newspaper.

Accountants last week urged the Government to extend the deadline for corporate Bahamas to meet substance reporting requirements amid a last-minute rush from stunned firms racing to comply. The Government acceded to this within hours of the New Year's start.

Mrs Rutherford-Ferguson said the last-minute rush only added to the confusion for many companies, and this was why the Chamber had pushed for the extension in addition to the technical challenges faced by the private sector.

The Ministry of Finance, in a release dated March 26, 2020, initially said companies with a financial year-end of June 30, 2019, would have 12 months in which to file declarations confirming they have a physical presence in The Bahamas and are conducting active business. This meant a June 30, 2020, "substance reporting" deadline for those companies.

This was subsequently changed to an end-September deadline, and then year-end 2020 before being pushed back again to end-January 2021. "Reports submitted by January 31 will not incur a penalty," the Ministry of Finance said in its latest guidance.

"Sole proprietorships do not need to submit an economic substance report. Companies and partnerships submit their economic substance reports by registering for an entity identification number (EIN) and completing the relevant economic substance form via the economic substance reporting portal: https://substancereporting.revenue.gov.bs.

"The public is reminded that there is no need to request an EIN for a company or partnership that already has a Taxpayer Identification Number. Sole proprietorships do not need to submit an economic substance report."

Penalties for non-compliance range from administrative fines of $150,000, or $1,000 per day for ongoing non-compliance, and these will not be incurred for companies submitting their "economic substance reports" by month's end as the Ministry of Finance sought to unclog the log jam caused by hundreds of companies seeking to file at the last minute this past December.