BRIDGETOWN, Barbados, May 6, 2011 /PRNewswire/ -- The British Government has advised the Government of Barbados that it will upgrade that country's status with respect to the UK's legislation on offshore non-compliance by U.K taxpayers.
Barbados has been notified that Her Majesty's Revenue and Customs will promote Barbados to Category 2 status when a revised UK Statutory Instrument is made in a few months' time.
This significant upgrade of Barbados from Category 3 status was a direct result of its 2011 Income Tax (Exchange of Information) Regulations which provides for the unilateral exchange of tax information according to the 2008 OECD standard with Barbados' new and existing tax treaty partners, including the UK, who are now unable to exchange tax information consistent with international standards.
The British Government has also signaled its support for a revised OECD Global Forum Phase I report on Barbados' transparency and tax information exchange credentials based on the 2011 regulations noting that "there is a strong case for a supplementary report to be presented [by Barbados] to the Peer Review Group of the Global Forum on the Transparency and Exchange of Information for Tax Purposes as soon as possible."
The Global Forum is the multilateral framework for dealing with issues of transparency and exchange of information by both OECD and non-OECD economies. In order to carry out in-depth monitoring and review of implementation of OECD tax standards, the Global Forum has established a Peer Review Group (PRG).
"This swift and decisive response by the British Government is most welcome, and underscores the long history of tax cooperation our countries have enjoyed since 1970 when the Barbados-UK tax treaty came into force," said Prime Minister Freundel Stuart.
The Prime Minister noted that like the OECD Global Forum, Barbados believes information exchange should be grounded in the provisions of a bilateral agreement and is pleased that during the week of May 16, this year, a protocol to our tax treaty with the UK will be negotiated to update, among other things, the existing provision on exchange of information.
In its Phase I report, the PRG cited Barbados' inability to exchange tax information with relevant partners because existing treaties, although providing for information exchange, did not contain the 2008 standard and new treaties reflecting the standard had not yet been ratified. The PRG did however acknowledge that Barbados had done all within its power to update existing treaties and to bring its new treaties into force but nonetheless determined that Barbados would not be eligible for a Phase II evaluation of its administrative policies and practices supporting tax information for 12 months.
"Barbados has already informed the OECD Global Forum of the 2011 Income Tax Regulations and our intention to request a supplementary report on our legal and regulatory transparency and tax information exchange regime based on these regulations once the Forum adopts its draft revised methodology to provide for supplementary reporting," said Prime Minister Stuart.
The Prime Minister reiterated his Government's disappointment with the Global Forum's Phase I findings noting the highly prejudicial consequences of the PRG's determination that Barbados was not eligible for advancement to a Phase II evaluation. "The assessment was particularly egregious given that the OECD itself has since 2002 endorsed Barbados as a transparent jurisdiction that has never relied on secrecy to attract investment. A policy demonstrated by our long history of codifying international transparency and information exchange norms through our aggressive and longstanding policy of tax treaty negotiation. This settled policy again received endorsement in 2009 by the G-20 and the OECD when Barbados found itself the only independent Caribbean country on their "white-list" of jurisdictions found to be in substantial compliance with international standard on transparency and tax information exchange. Indeed, this explains the currency of our standing despite the Phase I conclusion", stated Prime Minister Stuart.
"We look forward, now, to working with our partners in the Global Forum and the United National Expert Committee on International Tax and call for the speedy adoption of the OECD Global Forum's revised methodology to secure an outcome that serves the best interests of the people of Barbados and the wider international community."
About Invest Barbados
Invest Barbados (IB) is an economic development agency of the Government of Barbados. IB is responsible for attracting, winning and sustaining investment for Barbados. The agency is also responsible for promoting the export of indigenous services and goods while managing and developing the Barbados business brand.
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SOURCE Invest Barbados