Invest Barbados

Invest Barbados

February 03, 2011 13:22 ET

Barbados Government Amends Country's Income Tax Act to Demonstrate Continued Commitment to G-20 Endorsed OECD Tax Exchange Information Standard

Barbados Government Expresses Disappointment With OECD Conclusions on Phase 1 Assessment

BRIDGETOWN, BARBADOS--(Marketwire - Feb. 3, 2011) - The Prime Minister of Barbados announced today that in order to fully implement Barbados' national policy on transparency and demonstrate its commitment to the G-20 endorsed OECD standard on the exchange of information for tax purposes, the Government will amend the Barbados Income Tax Act.

The amendment will expand the scope of the tax information exchange provisions in our existing double taxation treaties to meet the new OECD standard as expressed in article 26 of the OECD model. In addition, the amendment will enable 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.

According to the Prime Minister, the Honourable Freundel Stuart, Q.C., M.P, the Government of Barbados is concerned that despite its highly successful and aggressive programme of negotiating tax treaties reflecting the new OECD standard on transparency and tax information exchange, some of these treaties are still awaiting signature and in some cases ratification by the other treaty partner.

"For example, although Barbados has concluded new treaties with Italy, Spain, Vietnam, the Czech Republic, Panama, Portugal and Belgium over the last eighteen months, none of these agreements have entered into force. In addition, a protocol has been negotiated with Canada to update the exchange of information provision, and we expect that it will be signed and ratified this year. As a result, despite 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 while 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."

"Barbados is disappointed that the application of the Global Forum's methodology has given rise to such a finding. In particular we are concerned that despite the acknowledgement by our peers in the Global Forum that Barbados has done all it can to apply the standard vis-a-vis its existing and new treaty partners, our legal and regulatory environment is still deemed to be insufficient to warrant our unconditional and immediate progress to a Phase II Assessment of the practice of information exchange. Moreover, since Barbados is one of the few international financial centres that has for over thirty 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 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 who are intent on forcing the proliferation of TIEAs rather than full double taxation treaties which can benefit both parties and encourage trade and investment. To this end the Income Tax Act will be amended over the coming weeks to provide a domestic law basis for exchanging tax information with existing treaty partners with whom we are yet to conclude protocols reflecting the 2008 OECD standard, and also with those partners with whom we have concluded treaty negotiations, but the agreements are awaiting ratification. Once new protocols and new agreements enter into force the domestic law basis for the exchange of information will cease to apply and legal basis for the exchange of information will be grounded in the provisions of the tax agreements.

About Invest Barbados

Invest Barbados (IB) is an economic development agency of the government of Barbados. IB is responsible for attracting, winning and sustaining international investment for Barbados. The corporation is also responsible for promoting the export of indigenous services and helping to develop and manage the Barbados Business brand.

Contact Information

  • For more information or to contact a spokesperson,
    please contact:
    Mansfield Communications Inc.
    Karen Nussbaum
    416 301-3193
    karen@mcipr.com