Sunday, June 20, 2021
HomeREGIONALBARBADOS STAYS ON EUROPEAN UNION’S ‘BLACKLIST’

BARBADOS STAYS ON EUROPEAN UNION’S ‘BLACKLIST’

Despite outcry from the Barbados Government, the European Union (EU) Council has kept the island on its list of non-cooperative jurisdictions for tax purposes released Tuesday.

- Advertisement -

Explaining the decision, the EU Council said the move followed peer review reports published by the Organization for Economic Cooperation and Development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes.

It pointed out that the Global Forum Secretariat had “downgraded” Barbados’ ratings to “partially compliant” with the international standard on transparency and exchange of information on request.

A September 28, 2020 note to the Council on the EU list of non-cooperative tax jurisdictions stated that Barbados did not have a rating of at least “largely compliant” by the Global Forum and has not yet resolved the issue.

Barbados was required to implement several changes to its tax exchange framework between July 2015 and June 2018 in order to become fully or largely compliant. The changes were completed by December 2019, seven months after the current administration came to office, but that was not done within the stipulated time frame for the review which was completed in March of this year.

However, local authorities are insisting that placing and keeping Barbados on the list of non-cooperative tax jurisdictions was an unfair move by the EU at this point, given that the changes have been made.

Special Advisor to the Prime Minister on International Business, Ben Arrindell, argued that it was nothing more than a “competitiveness issue” by the EU, which had decided to implement measures to eliminate competition in the EU bloc and to subject other jurisdictions to the same measures.

Being placed on the EU’s blacklist could have a deterrent effect on setting up business in Barbados and could also serve as a reason for banks to impose certain restrictions.

Arrindell said it was important for the island to be able to attract new international business firms without hindrance
so it could benefit from the taxes, job creation and overall business activity.

Meanwhile, Director of International Business Kevin Hunte explained that the “partially complaint” rating given to Barbados by the OECD’s Global Forum, which triggered the island being placed on the EU’s non-cooperative jurisdiction list, was because the island was not given enough time to be observed after the necessary changes came into effect.

“This is what makes it so grievous for us, because the EU is fully aware of that fact, fully aware that we have no deficiencies in our law and it is just a matter of time to observe us for our effectiveness,” he said.

Pointing out that the EU’s sanction came at a time when the island was struggling with the impact of the COVID-19 pandemic, Hunte added that could have severe consequences for the country, including impeding its ability to attract foreign direct investment and international business companies.

Minister of International Business Ronald Toppin has already indicated that it was his intention to submit a formal request
to the OECD Global Forum for a supplementary review by the beginning of December.

Once that is done, it is expected that at the next EU Council meeting in February 2021, Barbados would be removed
from the list.

Despite the sanctions, both Arrindell and Hunte, who were speaking on the Tuesday edition of Down to Brass Tacks, said they were seeing an increased interest among companies in setting up operations in Barbados.

They also reported that the corporation tax haul had increased since the change in the corporate tax regime two years ago.

Arrindell said with Barbados’ corporate tax rates of between 1 and 5.5 per cent, the jurisdiction remained competitive due to its population size, highly skilled and educated workforce, and because it was overall “more affordable to set up a business”.

The EU Council’s list of non-cooperative jurisdictions for tax purposes was established in December 2017 to tackle illegal non-payment or underpayment of tax, the use of legal means to minimise tax liability and concealment of origins of illegally obtained money.

Jurisdictions are assessed on the basis of a set of criteria laid down by the EU Council in 2016, concerning tax transparency, fair taxation and implementation of international standards against tax base erosion and profit shifting.

The Council’s decisions are prepared by its Code of Conduct Group which is also responsible for monitoring tax measures in the EU member states.

A total of 12 countries remain on Tuesday’s list. The others are Anguilla, Trinidad and Tobago, the US Virgin Islands, Panama, Guam, Fiji, American Samoa, Palau, Samoa, Vanuatu and Seychelles. The Cayman Islands and Oman were removed.

- Advertisement -spot_img
- Advertisement -

Most Popular

- Advertisement -
Advertisement

Get new posts by email

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Related News

You cannot copy content of this page