Wednesday, April 24, 2024

No urgency on exchange of information

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Barbados’ transparency and exchange of information (EOI) for tax purposes regime has been deemed “largely compliant”.

The problem, says the Organisation for Economic Cooperation and Development, is that the island is not sharing the information fast enough.

Last October, Minister of International Business Donville Inniss reported the improved ranking and said it would likely improve Barbados’ chances of attracting more investment.

However, in its Supplementary Peer Review Report (Phase 2), while commending the improvements, the OECD’s Global Forum On Transparency and Exchange of Information For Tax Purposes gave Barbados’ EOI a “partially compliant” grade.

The 117-page report also said that Barbados had to provide the Peer Review Group with a report on how it had addressed most recent recommendations. That report has to be submitted by June.

“Although Barbados has taken significant efforts to improve its [exchange of information] practice by creating a dedicated EOI unit, many of the same problems identified in Phase 2 are recurring at the time of the present review,” the report said.

“It is acknowledged that, similar to the time of the Phase 2 review, Barbados underwent another restructuring of its EOI unit (this time as part of a larger restructuring of the tax authority itself), which resulted in some disorganisation and negatively impacted EOI.

“However, issues relating to the EOI unit’s internal procedures and practices also undermined Barbados’ ability to exchange information in a timely fashion. Some procedures relating to resolving taxpayer disputes or with respect to gathering information from certain third party information-holders (such as commercial banks) also resulted in significant delays,” it added.

The report said “in none of the cases described did the competent authority take any steps to expedite the process of obtaining the required information”.

“In general, it did not seem as if Barbados feels a sense of urgency in fulfilling EOI requests, including those that have been outstanding for a significant amount of time,” it said.

“Therefore, the rating…remains at partially compliant and Barbados is still recommended to ensure that it can answer EOI requests in a timely manner and that it provides status updates where it cannot.”

The OECD said that “in practice, Barbados received 11 requests for information during the period from 1 July 2012 to 30 June 2015 from two partners, Canada and the United Kingdom.

Of the 11 requests, Barbados answered one within 90 days (representing nine per cent of all requests), two within 180 days (cumulatively, 18.2 per cent of responses), three between three months and a year (27.3 per cent) and four only after one year (cumulatively, 36.4 per cent).

It added: “One response (eight per cent) is still outstanding at the time of the current review. Although Barbados’ EOI practice improved towards the end of the review period, with the operationalisation of its new EOI unit, organisational issues towards the beginning of the review period resulted in significant delays, which have not been entirely resolved.”

“Therefore…Barbados is recommended to ensure that answers to EOI requests are made in a timely manner and systematically provide status updates where needed.”

The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes.

Inniss previously said that although Barbados was “not perfect yet” improvements would be made continuously.

“We have to take it within ourselves as leaders, as administrators and as Barbadians and ask ourselves what can we do to get a better ranking or rating going forward,” he said. (SC)

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