THE Income Tax Act will be amended over the coming weeks to enable the country to unilaterally exchange tax information with countries with whom it has initialled or signed a new treaty or protocol, but such a treaty has not yet been ratified by the other contracting state.
Prime Minister Freundel Stuart said this was an effort to fully implement Barbados’ national policy on transparency and demonstrate its commitment to the G 20-endorsed Organisation for Economic Co-operation and Development (OECD) standard on the exchange of information for tax purposes.
He said once new protocols and new agreements entered into force, the domestic law basis for the exchange of information would cease to apply and the legal basis for exchange of information would be grounded in the provisions of the tax agreements.
Stuart said that the Government was concerned that despite its highly successful and aggressive programme of negotiating tax treaties reflecting the new standard, some of these treaties were still awaiting signature and in some cases ratification by the other treaty partner.
He noted that the just released Global Forum Phase I Assessment On Barbados had concluded that while the country had made excellent progress in expanding and updating its network of tax treaties to reflect the OECD standard, the country no longer met the standard because these treaties were not yet in force.
“. . . We are concerned that despite the acknowledgement by our peers in the Global Forum that Barbados has done all it can to apply the standard vis-a-vis its existing and new treaty partners, our legal and regulatory environment is still deemed to be insufficient to warrant our unconditional and immediate progress to a Phase II Assessment of the practice of information exchange,” he said.