In an important move, the UK government has responded to recent amendments of Barbados's income tax regulations with an announcement that it is to upgrade Barbados's country status, with respect to legislation on offshore non-compliance by UK taxpayers.
The Barbadian government was notified of the change on May 6, which lifts the country from Category 3 to Category 2 status. The date the upgrade will come into force has not yet been made known. Categories are assigned for the purpose of imposing penalties on those found to have avoided due payment of tax. A Category 3 jurisdiction is classed as having either no existing information sharing arrangements, or arrangements of insufficient quality. Raising Barbados to Category 2 recognises that the jurisdiction has in place arrangements providing for the exchange of tax information with the UK, upon request.
The decision, according to Invest Barbados, came as a result of Barbados's 2011 Income Tax (Exchange of Information) Regulations, which provide for the unilateral exchange of tax information in accordance with Organization for Economic Co-operation and Development (OECD) standards set down in 2008.
Commenting on the development, Prime Minister Freundel Stuart said that: "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".
Stuart also stated that over the coming weeks, Barbados is to negotiate an updated protocol to its tax treaty with the UK, designed to amend existing provisions on the exchange of information.
According to the Barbadian government, the UK is also backing the publication of a revised OECD Global Forum Phase I report on Barbados’ transparency and tax information exchange credentials, based on the 2011 regulations. The existing Phase I report criticized Barbados's treaty network for failing to reflect the 2008 standards, findings Stuart calls disappointing.
He argued that: "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".
However, Stuart stresses that the OECD has been informed of the newly implemented regime, and of the Barbadian intention to request a supplementary report. “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”, he added.
The Barbadian government was notified of the change on May 6, which lifts the country from Category 3 to Category 2 status. The date the upgrade will come into force has not yet been made known. Categories are assigned for the purpose of imposing penalties on those found to have avoided due payment of tax. A Category 3 jurisdiction is classed as having either no existing information sharing arrangements, or arrangements of insufficient quality. Raising Barbados to Category 2 recognises that the jurisdiction has in place arrangements providing for the exchange of tax information with the UK, upon request.
The decision, according to Invest Barbados, came as a result of Barbados's 2011 Income Tax (Exchange of Information) Regulations, which provide for the unilateral exchange of tax information in accordance with Organization for Economic Co-operation and Development (OECD) standards set down in 2008.
Commenting on the development, Prime Minister Freundel Stuart said that: "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".
Stuart also stated that over the coming weeks, Barbados is to negotiate an updated protocol to its tax treaty with the UK, designed to amend existing provisions on the exchange of information.
According to the Barbadian government, the UK is also backing the publication of a revised OECD Global Forum Phase I report on Barbados’ transparency and tax information exchange credentials, based on the 2011 regulations. The existing Phase I report criticized Barbados's treaty network for failing to reflect the 2008 standards, findings Stuart calls disappointing.
He argued that: "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".
However, Stuart stresses that the OECD has been informed of the newly implemented regime, and of the Barbadian intention to request a supplementary report. “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”, he added.
