Barbados has not been caught off guard by the global minimum corporate tax rate of 15 per cent put forward primarily by the United States at the recent meeting of the G7 group of countries.
Minister of Industry and International Business Ronald Toppin told the House of Assembly yesterday: “We have known about this for some time and this is engaging the attention of the top financial and tax brains of this country, and also those stationed overseas who are all playing a part in looking at this issue to mount a response as best as we can.”
He cited the action as “one of those instances where might tends to be right”, to the detriment of small states, while describing the proposal in the case of Barbados as “one of the greatest contradictions there could ever be”.
“When countries like Barbados became low-tax jurisdictions, the very thing that they (the OECD) said was: ‘That was okay, you can be a low-tax jurisdiction, but to maintain that status, we will leave you alone if you enact economic substance legislation’. That was their creature.”
However, he said the matter was “not yet finalised”, adding that the current position appeared to be that if the international business stuck to the tax rate of 5.55 per cent, as had been agreed upon in the case of Barbados, the international business would have to pay the difference in tax in its country of citizenship.
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