Determined to clear Barbados??? name as an alleged tax haven, Minister of International Business, Donville Inniss, has taken the fight ???to the next level???, by recently heading to Brussels, Belgium, to engage with representatives of the European Union (EU) Commission.
This recent action comes against the backdrop of several protests over the last few months by the Ministry of International Business regarding Barbados and 29 other jurisdictions being blacklisted by members of the EU who deem them as being non-cooperative tax jurisdictions.
Speaking on his return with the Barbados Government Information Service, Mr. Inniss discussed his recent trip and his intentions to ensure that this country???s reputation was not further jeopardised.
???Barbados protested the creation of this list on the basis that it was seriously flawed in the criteria being used to create the list, and secondly, even the criteria being used should not have been on the list. We felt it was unfair and very high-handed and one-sided by EU member states, and we obviously dispatched correspondence to most of the countries involved,??? he explained.
He stated that most of the 30 countries that had Barbados on their blacklist objected, and that since then, Spain had removed Barbados from their blacklist and Estonia had indicated that it was an error for everyone involved. The Minister also noted that subsequently, Barbados signed a Double Taxation Agreement with Italy.
???So, we felt very strongly then and still feel that Barbados is a treaty-based jurisdiction; we are indeed a very cooperative country. We indicated that we signed on to the multi-lateral Convention for the Automatic Exchange of Information and we just signed on to the Foreign Account Tax Compliance Act (FATCA) in the Governmental Agreement in the U.S.A. So, we have done everything that we need to do to be as compliant as possible,??? Mr. Inniss confirmed.
Illustrating his further commitment to the cause, the Minister, along with London-based consultant to the Ministry of International Business, Francois Hendy Yarde, met with Head of the European Commission on Tax and the Customs Unit, Valere Moutarlier, and some senior staff in his office.??It was a necessary step, he stated, ???to meet with the EU and voice our concerns but, more importantly, chart a way forward for this particular matter???.??The Minister further explained that there was common understanding and agreement in the creation of the list and there was no mal intent on the part of the EU commission itself.
???This is more a list put out by member states of the EU but going forward, we have agreed that Barbados will continue to engage at a bilateral level with the respective countries. We should also be more engaging with the EU, as they ought to be more engaging with us, and that engagement is going to take place by way of us sharing information with the EU in a timely basis as to what we are doing in our jurisdiction.
???We have invited them to come into the Caribbean and engage us in discussions around our International Financial Services Sector. We will wish to be appraised of any formation of any new criteria for the creation of lists for tax planning purposes. I have also invited them to have a far greater appreciation as to how we do things, and why we do things the way we do in the Caribbean, and Barbados in particular,??? he disclosed.
Reiterating that Barbados was not a tax haven, the Minister stated that the country had ???a pretty high rate of tax???, but it also had some exceptions that effectively brought it down to a lower rate of tax.??However, he continued to underscore that this country was a well regulated jurisdiction supported by laws and treaty based.
???We are not therefore a jurisdiction that you can consider to be a tax haven. I have invited the EU to come sit and work with us, so from meeting them I am satisfied that we will get a higher level of cooperation out of the EU, and they will be more amenable and we have worked out the framework for cooperating going forward for the EU tax department and us. Our embassy in Brussels will have some follow up work to do to take it forward to the next point.???
Adding that they also had the opportunity to meet with the Office of the EU Commissioner for Financial Stability, Financial Services and Capital Markets, Mr. Inniss disclosed that they met with the Head of his Cabinet, Matthew Baldwin, and talks were ???useful as it helped to emphasise the fact that there is a great deal of misunderstanding within the EU as to what we do and how we do it???.
Highlighting that they also met with the Principal Legal adviser in the EU President???s office, Antoine Kasel, Mr. Inniss said it was agreed that he would write directly to the EU President emphasising the errors in the blacklisting and for the EU and the Organisation for Economic Co-operation and Development (OECD) to cooperate more.
He further explained that one of the matters that arose was the fact that the OECD, of which most of the EU countries are members, have a different set of criteria and methodologies for assessing countries when it comes to tax policy issues, enforcement and also the level of technical support they provide.
In the next feature, Minister Inniss will reveal further insight into the EU meetings he and his team attended, and their subsequent trip to Paris to meet with the Head of Tax for the OECD and the Head of the Global Forum.