Minister of International Business and International Transport, George Hutson, and China’s Ambassador to Barbados, Wei Qiang, congratulate each other on the signing of the Double Taxation Agrreement. (Image BGIS/C.Pitt)
The Protocol to the Double Taxation Agreement (DTA), between the People’s Republic of China and Barbados, provides opportunities ripe for the taking by Barbadian enterprises.
This assurance has come from Director of International Business, Francoise Hendy, who was today highlighting the economic benefits of the agreement shortly after it was initialled by Minister of International Business and International Transport, George Hutson, and China’s Ambassador to Barbados, Wei Qiang.
"I think the importance of the Chinese market is clear for Barbadian enterprises, as it is for enterprises around the world. So, having a relationship that has been codified by a treaty and a protocol, means that the opportunities are there to be seized and that would be the [obvious] benefit," Ms. Hendy explained.
In highlighting changes to the original agreement, she said the first major one was the incorporation of the Organisation for Economic Co-operation and Development
(OECD) standard for information exchange, to replace an old formulation of the information exchange standard.
Noting that the incorporation of this standard in Barbados’ treaty network had resulted the island being placed on the OECD’s white list for the 20/20 Summit, Ms. Hendy stated: "So we thought we would take the opportunity to include that provision in the protocol. China is not a member of the OECD, but it has observer status, and it is important for Barbados to make sure that our treaty network reflects our policy and practice, when it comes to tax information exchange."
The Director of International Business identified the second major development as one reflective of changes in China’s domestic laws in relation to the taxation of companies, which according, to her, mainly affected the advantageous capital gains provision within the previous accord.
"The capital gains provision was very beneficial to Barbados and to businesses around the world, but of course when a treaty partner makes changes in their domestic law, naturally, the partner has to reflect those changes in the treaty relationship," she pointed out noting that China had been conducting a systematic review of all of its treaties.
Ms. Hendy described the other amendments as "very inconsequential, in so far as they just reflect the movement forward in terms of how tax treaties are crafted." ??She maintained that the importance of the Protocol was that it reflected a long-standing relationship between Barbados and China, the fact that China’s economy had "grown by leaps and bounds" since 2000, and the whole concept of the movement of international taxation.
"So the treaty just reflects a new circumstance. It?? [primarily] reflects?? the ongoing?? relationship between Barbados and China, and it really is a good indication when you have a treaty that is 10 years old and you?? can sit down and renegotiate key aspects of it, and come up with?? a new protocol that is still?? full of benefit and full of opportunity," ??Ms. Hendy disclosed.
As to whether the new Protocol in any way altered Barbados’ position as a beachhead for the launch of Chinese businesses into other jurisdictions, Ms. Hendy spoke to the contrary.
"I don’t think so, because the idea is that we have a relationship with China, which compared to other jurisdictions is second to none. It is in the same model and in the same vein as our relationship with Canada. Therefore, I think we will continue to be a very important beachhead for Chinese outward investment and investment into China.
That has been our policy thrust for the last 10 years. So it will be different, but I think it will be improved," she opined.
The Agreement between the Government of the People’s Republic of China and Barbados for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, was signed in Beijing on May 15, 2000.