Minister of State for Finance the Hon. Michael Halkitis said, on February 9, 2017, that The Bahamas and Japan concluded a Tax Information Exchange Agreement in January 2011 and the signing of the Protocol that day -- six years later -- with Japan was another step towards The Bahamas demonstrating its commitment to maintaining high levels of conduct and International Standards with respect to tax co-operation and tax transparency.
"The Bahamas and Japan will also sign a Competent Authority Agreement in the near future," Minister Halkitis said, during the signing ceremony of the Protocol to amend the Tax Information Exchange Agreement between The Government of the Commonwealth of The Bahamas and the Government of Japan for the exchange of information for the purpose of the prevention of fiscal evasion and the allocation of rights of taxation with respect to income of individuals.
Minister Halkitis welcomed Ambassador of Japan His Excellency Masanori Nakano and Second Secretary Hideki Shinozaki, both of the Embassy of Japan to The Bahamas, for the signing ceremony.
Minister Halkitis said that in 2014 The Bahamas committed to implement the OECD’s Global Forum Common Reporting Standard (CRS) for the automatic exchange of financial account information.
"The Bahamas chose the Bilateral approach, which is a bonafide one sanctioned by the OECD Global Forum’s Automatic Exchange of Information Working Group," he said.
Minister Halkitis pointed out that under the bilateral approach, the legal basis for automatic exchange is found in an income tax treaty with another country containing the standard OECD Model; or Tax Information Exchange Agreements (TIEAs) which provide for the automatic exchange of information.
"Your Excellency, I am pleased to inform you that The Bahamas will continue its co-operation with our Global Forum Partners as well as the G7 and G20 countries to tackle and deter cross-boarder tax evasion," he said.
Minister Halkitis noted that it is recognized that cross-boarder tax evasion is a problem faced by jurisdictions all over the world. Persons who do not comply with the tax obligations of their jurisdictions undermined the integrity of tax systems worldwide, he added.
"The Bahamas’ Automatic Exchange of Financial Account legislation -- together with Agreements and Protocols which allow for the Automatic Exchange of Information -- ensure for greater transparency and an improvement to the integrity of our financial center system," Minister Halkitis said.
The Bahamas has committed to exchanges commencing in September 2018 and, as Japan is the first Global Forum Partner with which The Bahamas had signed a Protocol, The Bahamas anticipated an effective exchange of information, he stated.
"However, this will not be the only Protocol that The Bahamas will sign," he added. "We are striving to have as many Protocols and Agreements in place with other interested Global Forum Partners."
Minister Halkitis told Ambassador Nakano that, by the signing of the Protocol, it was evident that The Bahamas was complying with the rules set by the OECD as they related to transparency in tax matters.
"The Bahamas remains a regulated, compliant and legitimate International Financial Center with a strong Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regime," Minister Halkitis said. "The Bahamas looks forward to our continued relationship with Japan in respect to co-operation in tax matters."
Minister of State for Finance the Hon. Michael Halkitis, left, shakes hands with Ambassador of Japan His Excellency Masanori Nakano, on February 9, 2017, during the signing ceremony of the Protocol to Amend the Tax Information Exchange Agreement between The Government of the Commonwealth of The Bahamas and the Government of Japan for the exchange of information for the purpose of the prevention of fiscal evasion and the allocation of rights of taxation with respect to income of individuals, at the Ministry of Finance. (BIS Photo/Raymond A. Bethel, Sr.)
By Eric Rose
Bahamas Information Services
