The Bahamas government has criticized the European Union (EU) for relying on what it said is outdated information in order to keep the country on a list of “non-cooperative jurisdictions for tax purposes”.
The EU Tuesday named Belize and Antigua and Barbuda as the latest Caribbean Community (Caricom) countries to its list. In addition, the EU also named Seychelles to the list, while at the same time removing the British Virgin Islands, Costa Rica and Marshall Islands.
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The EU said that apart from the new additions, the other Caribbean countries included in its 16 non-cooperative jurisdictions are Anguilla, The Bahamas, Trinidad and Tobago, Turks and Caicos Islands.
“The Council regrets that these jurisdictions are not yet cooperative on tax matters and invites them to improve their legal framework in order to resolve the identified issues,” the EU said in a statement.
But Nassau said the EU’s determination was based on the recommendation of the Organization for Economic Cooperation and Development Forum on Harmful Tax Practices (FHTP) meeting held in April 2023 before many of its reforms for economic substance were implemented.
The Ministry of Finance statement said the FHTP will meet again at the end of this month and that the government “is cautiously optimistic for a favorable review by the FHTP.
“A favorable review by the FHTP at the end of the month will be considered by the EU in their February 2024 meeting. The government of The Bahamas has and continues to do everything in its power to address the compliance with the economic substance regime,” the government statement said.
“The government of The Bahamas has made considerable progress over the last year and this is reflected in the non-compliance on the BEPS (base erosion and profit shifting) Action 13 country-by-country reporting being removed from the EU’s determination,” the statement added.
Attorney General Ryan Pinder had said in August that the government was in the testing phase of its new economic substance reporting portal and has begun onsite inspection of financial firms and other entities within the ambit of substance reporting, having issued fines after 30 or so inspections thus far.
The full launch of the portal was due to take place last month.
Pinder said the government was “rather disappointed but not surprised” that the country was still included on the blacklist.
“We fully expect to have a favorable review by the Forum for Harmful Tax Practices and, by the end of this calendar year, will have revised recommendations from the Forum which the EU will take into account in its February meeting,” Pinder noted. CMC
