Barbados will be amending the Barbados Income Tax Act to expand the tax information provisions in the existing double taxation treaties in order to meet the new Organisation for Economic Cooperation and Development (OECD) model.
The announcement was made recently by Prime Minister, Freundel Stuart, who said it would allow Barbados to "unilaterally exchange tax information with countries with whom it has initialed or signed a new treaty or protocol, but such treaty has not yet been ratified by the other contracting state".
He also expressed?? disappointment that despite the island’s success in negotiating tax treaties that reflected the new OECD principles on transparency and tax information exchange, some of them were either not?? ratified or were awaiting signature.
Mr. Stuart added: "For example, although Barbados has concluded treaties with Italy, Spain, Vietnam, the Czech Republic, Panama, Portugal and Belgium over the last 18 months, none of these agreements have entered into force.?? In addition, a protocol has been negotiated with Canada to update the exchange provision and we expect that it will be signed and ratified this year."
He further stated: "As a result of Barbados’ history of exchanging tax information based on double taxation treaties, the just released Global Forum Phase I Assessment on the Barbados jurisdiction has concluded that although Barbados has made excellent progress in expanding and updating its network of tax treaties to reflect the OECD standard, we no longer meet the standard because these treaties are not yet in force."
Mr. Stuart said he was disappointed that the island had been unable to proceed to Phase II despite favourable support from its peers in the Global Forum.
"Since Barbados is one of the few international financial centres that has for over 30 years routinely exchanged tax information with our treaty partners, we are surprised that other countries who have only recently committed to transparency and tax cooperation, are eligible to move on to phase II Assessment, based on the number of tax information exchange agreements they have concluded in the last two years.
Barbados must take steps to ensure that its sovereign right to set its own national policy in the area of international tax, is not frustrated by the pressure brought to bear by a number of OECD members in the Global Forum…," he cautioned.