What steps have been taken by The Bahamas to meet international standards for transparency and tax cooperation?

Category: International Cooperation

Answer:

A. The following steps have been taken by The Bahamas:

i) The Bahamas has entered into 33 Tax Information Exchange Agreements

On March 20, 2010, The Bahamas achieved the G20 standard on Transparency and Cooperation in Tax Matters. This standard was first promulgated by the Organisation for Economic Cooperation and Development ("OECD") in the 1990s. In 1998, the OECD sought to have 40 plus countries, including The Bahamas, adopt this standard. The Bahamas, in a 1999 presentation to the OECD, insisted on a level playing field. This principle was formally accepted by the OECD in 2002 and represented in a communiqué issued by The Bahamas in 2002.

For more than 10 years, The Government of The Bahamas held firm to this principle and kept faith with the industry; likewise in 2009, The Bahamas, as an integrated member of the international community, moved to implement the standard immediately following global consensus and the achievement of its key pre-condition.

Over a 12 month period culminating in March 2010, The Bahamas successfully concluded 19 agreements to achieve the standard.

To date (April 2016) the Bahamas has signed over 30 Tax Information Exchange Agreements.

ii) The Bahamas is FATCA Compliant

On 3 November 2014, The Bahamas and the US signed their Intergovernmental Agreement (IGA) to Improve International Tax Compliance (the Agreement) and to Implement FATCA based on the Model I IGA. To accommodate the non-direct tax system in The Bahamas, the IGA is a model 1B (non-reciprocal) IGA. As an IGA partner jurisdiction, Bahamas-based Financial Institutions will not be subject to a 30 percent withholding tax on US source income, unless they fail to meet the requirements set out in the IGA and in Bahamas domestic implementing legislation.

Under the terms of the Agreement, Bahamas Financial Institutions will provide the Bahamas Competent Authority with the required information. The Bahamas Competent Authority will forward that information to the Competent Authority in the US. The Agreement is an international instrument for exchange of information for tax purposes between The Bahamas and the US.

iii) The Bahamas is committed to the Automatic Exchange of Information/Common Reporting Standard:

The government has restated commitment to the bi-lateral approach. Industry and government are collaborating on the implementation strategy. Industry has made recommendations to the government on the approach to take to effectively implement AEOI/CRS.

Cooperative & Responsible Jurisdiction

Generally, The Bahamas is well regulated with processes for reporting where money laundering or terrorist financing is suspected. There is strong regulatory oversight. We are a cooperative and responsible jurisdiction and we are committed to transparency through the Automatic Exchange of Information.