Barbados is hoping for a favourable outcome when the Peer Review of the Global Forum on Transparency and Exchange of Information meets in Brazil from February 27 to March 2.
This was confirmed by Director of International Business, Kaeron Venner, who further explained that the upcoming meeting will review the Supplementary Report on Barbados as well as that on Bermuda and Qatar, and other Phase 1 Reports.
In accordance with the methodology adopted by the Global Forum, the reviewed jurisdiction is invited to participate in the discussion of the draft report which focuses on Barbados’ response to recommendations of the Peer Review Group to improve its legal and regulatory framework.?? Once satisfactorily met, it should allow the country to move to Phase 2 which ??involves an assessment of the effective implementation of exchange of information in practice.
Mr. Venner explained the sector was presently going through challenging times largely surrounding concerns about Barbados’ position with the Global Forum and its labelling as a tax haven, among other important developments which could potentially impact the country’s competitiveness as an international business and financial services centre.
"The International Business Division has been working hard to address the Global Forum issue to ensure that Barbados’ longstanding image as a transparent, credible and well-regulated low tax, and not a tax jurisdiction," he said.
Mr. Venner further explained that officials in the Ministry ????were in consultation with the
Global Forum Assessors in connection with the finalisation of Barbados’ Supplementary Report.
The Global Forum Peer Review Group had concluded that two elements related to legal and regulatory framework critical for a jurisdiction to progress to a Phase 2 Review were not in place in Barbados’ case.?? These focused on exchange of information mechanisms allowing for effective exchange of information and the jurisdiction’s network of information exchange covering all relevant partners.
Mr. Venner stated that in order to address these issues and recommendations, Barbados sought to further expand and update its treaty network.???? As a result , double Taxation Agreements (DTAs) with Luxembourg and Spain entered into force on August 8, 2011 and October 14, 2011 respectively; a DTA was signed with the Czech Republic on October 26, 2011; and a DTA was signed with Iceland on November 3, 2011. Protocols to existing DTAs with Finland, Norway and Sweden were also signed on November 3, 2011; a protocol to existing DTA with Canada was signed on November 8, 2011; three Tax Information Exchange Agreements (TIEAs) were signed with Denmark and its administrative regions of Greenland and the Faroe Islands on November 3, 2011.
Mr. Venner said that with respect to the above Barbados has now concluded its constitutional requirements for entry into force and now awaits its partners to do the same.???? A new DTA was initialed with the U.K. on May 19, 2011, and TIEAs were initialed with Germany and France on November 30, 2011 and January 2012 respectively.
He further informed that legislative action in the form of Proclamation of the Money Laundering and Financing of Terrorism (Prevention and Control) Act 2011, and the International Corporate and Trust Service Providers Act, 2011, were done to address, in part, certain elements that were considered in place but required improvement.??
The Director pointed out that in some cases with the playing field leveled in terms of tax arrangements, competition would be based largely on the ability of a jurisdiction to deliver service in an efficient, effective and timely manner – business facilitation became of paramount importance.?? "If your tax arrangements are on the same level as other jurisdictions what you need to ensure is that you have systems and processes in place that would allow for efficient and timely service delivery," he said.
Mr. Venner, who assumed office on September 15 last year, stated that companies choose Barbados not only because of its tax efficient vehicles and network of DTAs, but because of a number of infrastructural and lifestyle factors that overall made it cost-effective and globally competitive for them to structure their business operations from here.
As a result, he indicated that Barbados needed to ensure that a favourable environment was in place and maintained if the country was to compete successfully, especially in the current global circumstances.?? He noted that Barbados was putting in place legislation to make provision for Private Trust Companies and Foundations to widen its suite of products as well as updating existing legislation to ensure that they met the needs of investors.?? "We have also been seeking to continue expansion of our
DTA network which is the bedrock of our international business and financial services sector," he said.
Mr. Venner noted that the international business sector had great potential and all stakeholders and the wider public needed to work together constructively to ensure that Barbados maintained its status as a jurisdiction of choice for investors.
The director said the Strategic Plan for the international business sector for 2007-2012 had run its course and would be replaced following discussion between the Ministry of International Business, its Joint Policy Working Group, the Treaty Negotiating Team and other government and private sector stakeholders.?? He indicated, however, that the Ministry of International Business had put a Short and Medium-Term Action Plan (2009-2011) in place to address the global economic downturn and financial crisis.
This, he said, had been overtaken by Government’s Medium-Term Development Strategy, which runs from 2010 to 2014, and gives support to the country’s long -term vision of becoming "A Fully Developed and People-centered Society through New Development Pathways".