The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Attorney General has slammed France’s decision to keep The Bahamas on its national tax blacklist as “complete and utter foolishness”.

Ryan Pinder KC told the Society of Trust and Estate Practitioners (Bahamas) conference that he had conveyed such sentiments to the French ambassador when they and a delegation were visiting The Bahamas last week.

He questioned the logic in France’s decision to keep The Bahamas on its list of non-cooperative jurisdictions for tax purposes when it was a member of the same European Union (EU), that just three days later, delisted this nation from the 27-country bloc’s separate blacklist after determining it had remedied deficiencies in its economic substance reporting regime.

Mr Pinder said France’s decision to keep The Bahamas on its blacklist was a “policy decision” that a minister could reverse if they saw fit. “The French were at the meeting. They are members of the OECD. The FHTP (OECD Forum on Harmful Tax Practices) unanimously agreed to the process,” he added. “They are members of the European Union. The European Union agreed to the process.

They were very much aware on January 1 that we had completed our obligations of exchanging [economic substance] information. Yet they say because they decided at their meeting, which was two weeks prior to the EU’s, they won’t follow the EU’s directive.

“I told them this is complete and utter foolishness. This is a policy decision by their government. They can go right back right now and have a minister change that policy decision and remove us from their list. Otherwise, I have no more time to speak about this.”

France decided on February 17, 2024, to maintain The Bahamas as one of five jurisdictions subject to full defensive measures - including punitive withholding taxes on payments such as interest, dividends and royalties - for the whole of this year with that move to only be reviewed come 2025. The French decision came just three days before the EU resolved to delist The Bahamas on February 20, 2024.

Mr Pinder has previously called for the abolition of blacklists on the basis that they lack objectivity and fairness, and are used by developed countries to inflict economic damage on small developing countries by crippling their ability to participate in the international economy and financial services industry.

The Attorney General said France’s decision is an “attack” on The Bahamas, and he intends to raise the matter before the United Nations (UN) as it is a “breach of our fundamental human rights of development and opportunities”.

He added: “When I speak about blacklists, and when I speak about how these countries do this in a unilateral and unethical fashion to countries like The Bahamas, this is exactly what I speak about.

“It is wrong. It is not the right procedure. It is not genuine. It is an attack on our countries, and it’s not fair and we’ll be taking this to the United Nations because we believe it’s a breach of our fundamental human rights of development and opportunities.”

The Netherlands, too, has decided to maintain The Bahamas’ on its own national blacklist for another whole year with the move taken on December 29, 2023.

“Inclusion of a jurisdiction on the Dutch blacklist applies for the entire calendar year 2024 with an annual revisit of the list effective the following calendar year,” one Dutch accounting firm said. Those jurisdictions targeted are ones with no or a low rate corporate income tax of 9 percent or less, which means The Bahamas’ plan to implement the 15 percent minimum global corporate tax rate may be of some help.

However, in the meantime, The Netherlands will impose similar measures to France via withholding taxes at a 25.8 percent rate, controlled foreign company rules and other strictures designed to discourage business with The Bahamas and other low-tax states.

While national blacklistings are less comprehensive and impactful than those imposed by multinationals, such as the EU and Organisation for Economic Co-Operation and Development (OECD), they nevertheless pose a reputational risk and undermine the ‘ease of doing business’ with entities and individuals from those nations by adding to the cost and time associated with financial transactions.