The DPM was Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest said among the issues financial services practitioners are contending with is the move to automatic exchange of information, particularly for matters related to taxation in other jurisdictions.
The initial standard in this regard was the Exchange of Information on Request, espoused by the OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes, DPM Turnquest said at the Securities Industry Act, 2011 and Investment Funds Act, 2003 Annual Briefing hosted by the Securities Commission of The Bahamas at the British Colonial Hilton, Thursday, September 14, 2017.
He said The Bahamas implemented a number of key legislative initiatives to ensure the legal and regulatory framework as well as supporting processes and procedures were in place to satisfy the Exchange of Information on Request standard.
“These involved, among other things, ensuring reliable accounting records were maintained and accessible, and that the beneficial owners of entities, structures and legal arrangements were identified and properly maintained.
“The legislative initiatives included the International Tax Cooperation Act, 2010, which facilitated the implementation of international tax agreements and tax information sharing under those agreements. The Government also implemented a series of legislative amendments including amendments to the International Business Companies (IBC) Act, the Partnership Limited Liability Act and the Segregated Companies Act, amongst others, in 2011, and the IBC Accounting Records Order of 2016, to meet the information exchange standards. After having undergone the Global Forum’s most recent review – the Phase 2 review, the jurisdiction is assessed as Largely Compliant.”
The DPM said the Foreign Account Tax Compliance Act or FATCA was adopted by the United States Congress in 2010, and of course, The Bahamas made the necessary legislative and procedural changes to meet the FATCA requirements.
He explained that by September 2014, the G20 and leaders of the Organisation for Economic Cooperation and Development had endorsed the Common Reporting Standard or CRS.
The CRS facilitates automatic exchange of account information, on a confidential basis with information from financial institutions being exchanged annually. According to an OECD June 2017 report, some 101 jurisdictions had committed to implementing this newest standard on tax transparency and undertaking actual information exchanges by 2017 or 2018.
“You would be aware that the Government is committed to adopting the multilateral approach to sharing information under the CRS regime. We simply cannot afford, nor do we wish to have, the reputation of being the ‘last tax haven standing’ as the Head of the OECD’s Global Forum Secretariat on Transparency and Exchange of Information for Tax Purposes, Monica Bhatia, referred to the jurisdiction prior to the Government’s commitment to the Multi-lateral approach.”
DPM Turnquest said, “We must protect our sector from the fallout of blacklisting, and we want to be singled out for markers such as excellence in service, being business friendly, and product innovation--not for being a place to hide or launder illicit funds of any kind. Undoubtedly, this will impact reporting requirements and hence compliance costs in most, if not all, financial institutions.”
By Llonella Gilbert
Bahamas Information Services
