Disclosure 'deluge': Over 17,500 meet substance demand


Philip Galanis


Tribune Business Editor


Corporate Bahamas faces a "deluge" of disclosure demands, an accountant is warning, with thousands of companies yet to meet "substance reporting" demands imposed by the Government.

Philip Galanis, the HLB Galanis managing partner, told Tribune Business the Bahamian private sector is "in a new era of extremely extensive disclosure" as the Ministry of Finance last night confirmed more than 17,500 corporate entities had met the previous year-end deadline imposed by the Commercial Entities (Substance Requirements) Act 2018.

"It's amazing," he said. "We've entered into a new period of extensive disclosure by companies and non-profits. A few weeks ago we had the situation with non-profits having to file a declaration, and now we have the same situation with companies.

"They're being faced with this deluge of information filing. We seem to be in a new era where companies have to keep records up-to-date, and be aware of what the requirements are for this annual event."

Mr Galanis said he had spoken to his HLB accounting colleagues in the British Virgin Islands on New Year's Eve, who had also been "working feverishly" to ensure their corporate clients in the UK overseas territory also met the year-end deadline for its version of the Commercial Entities (Substance Requirements) Act.

The Bahamian law, passed as part of legislation to meet the European Union's (EU) demands that Bahamas-based companies have a physical presence and conduct real business, earning income and making expenditures in this nation, requires all incorporated entities and legal partnerships to complete a so-called "substance reporting form" and obtain an "entity identification number" (EIN).

The Ministry of Finance, in its statement last night, said much of corporate Bahamas has work to do to meet the extended end-January 2021 deadline for completion of this filing. It added that the penalties for non-compliance have also been suspended.

"Over 17,500 entities have successfully completed their 2019 reporting under the new Act, which was due at the end of 2020. However, that leaves thousands of companies and other entities that still must meet their reporting obligations under the new legislation," the Ministry said, adding that the Department of Inland Revenue has added "dedicated staff" to process filings.

Kwasi Thompson, minister of state for finance, said: "We all know that COVID-19 has been a very disruptive year, and this is the first reporting cycle for the new regulations. The deadline caught some companies off guard for various reasons, and the Government is working with stakeholders to facilitate compliance.

"We will continue to monitor the situation. However, we urge businesses to take advantage this opportunity to comply with the new requirements."


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