Monday, April 22, 2024

BIBA questions OECD report


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BARBADOS SHOULD NOT be penalized globally for its preference for signing Double Taxation Agreements (DTAs) over Tax Information Exchange Agreements (TIEAs), says the Barbados International Business Association (BIBA).
Reacting to the recent release of the Phase 2 report by the Organization for Economic Cooperation and Development (OECD) Global Forum Peer Review, BIBA President Connie Smith described it as “unreasonable” that Barbados had been found “non-compliant” regarding its ability to exchange information with relevant partners, largely, it would appear, because it had only responded favourably to the requests by two out of five OECD members to negotiate TIEAs, while continuing to express a preference for negotiating DTAs.
“The ability to exchange tax information is enshrined in the provisions of a DTA so the idea that it would somehow be better for Barbados to negotiate TIEAs, which do not create business of substance or provide economic benefit to Barbados in the same way that DTAs can, would frankly be cutting off our nose to spite our face,” said Smith.
She continued, “Barbados’ long-term strategy has been to pursue the negotiation of DTAs that provide significant opportunities for Barbados. To casually depart from this strategy at the initial request to simply exchange tax information would significantly dilute the main differentiator for Barbados amongst international business centres.”
The BIBA head also questioned how the country could have been given an overall rating of only “partially compliant” when, individually, it had been ranked “compliant” in four of the other elements under scrutiny, “largely compliant” in another four, and only “partially compliant” in relation to the timeliness of response to request for tax information.
While acknowledging that it was not best practice for Barbadian tax authorities to take more than three months to respond to requests from treaty partners for information, Smith said this failing should not overshadow the strides made in the other areas under review.
She pointed out that Barbados was compliant in important areas such as, obtaining and exchanging bank account information at the request of relevant tax authorities, and the ability to safeguard the confidentiality of tax information received.
Also, important to Barbados’s global reputation, said Smith, was that the island was largely compliant in having the mechanisms in place to allow for effective exchange of information. However, she acknowledged that the report did offer some important measures against which Barbados is rated internationally and this provided useful feedback on some areas on which the country should focus greater effort. (PR)


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