Bahamas Meets Tax Exchange Deadlines
The ministry of finance last night said The Bahamas had met the September 30 deadline to begin automatic tax information exchange (AEOI) with some 35 partner jurisdictions.
Revealing that the first such exchange with another country had already occurred, the ministry said this further demonstrated The Bahamas’ commitment to meet the benchmark established by the Organisation for Economic Co-Operation and Development’s (OECD) Common Reporting Standard (CRS).
K Peter Turnquest, pictured, deputy prime minister, said: “As we look holistically at the global tax landscape, The Bahamas continues to enhance its competitiveness by implementing best practices for the promotion of transparency. This is also part of the ongoing work to safeguard the financial sector from external threats such as blacklistings.
“To support this work, the Government has also undertaken an extremely aggressive legislative agenda. Just in the past year, we achieved major reforms to strengthen the Bahamian position to combat money laundering and the threat of terrorism financing. And our legislative docket is currently packed for the rest of the year with additional financial sector legislation to enhance our global positioning as a well-regulated offshore financial centre.”
The Bahamas first participated in automatic tax information exchange in 2015 with the US, after the latter implemented its Foreign Account Tax Compliance Act (FATCA). FATCA also has an end-September reporting deadline, which The Bahamas has successfully met every year.
FATCA has helped The Bahamas meet the demands of the OECD’s CRS standard, which now requires it to exchange tax information automatically with multiple jurisdictions – not just the US. Some 35 jurisdictions were thus activated as The Bahamas’ automatic exchange partners on August 1, 2018.
“Once again, The Bahamas has demonstrated we have the technical competencies necessary – legal, regulatory, technological – to ensure we meet our obligations under the various international frameworks for tax transparency,” Mr Turnquest said.
“Meeting the September 30 deadline required many moving parts to come together with urgency, including the adoption of new technology by the entire industry.”
The Bahamas earlier this year selected Vizor Software to create an integrated application to manage both FATCA and CRS – AeoI reporting. All Bahamian financial institutions (FIs) and the Competent Authority supervising the information exchange, the ministry of finance, had to adopt this new reporting platform to submit and process the tax compliance data.
Mr Turnquest said: “The transition was not without its challenges, but that was expected given all of the moving parts. The Compliance Commission organised training sessions and prepared online resource material to assist financial institutions in the changeover. We worked diligently with Visor to iron out the various challenges with the online portal.
“They committed all of their resources to ensure we met the deadline, including sending technical advisors from Ireland to The Bahamas. The cooperation of all our financial institutions is also commendable; their co-operation and commitment to fulfilling their reporting obligations speaks volumes about the high standards we maintain in the jurisdiction.”
To prepare for compliance with the CRS and its deadlines, The Bahamas signed the Convention on Mutual Administrative Assistance in Tax Matters (MAC) and the Multilateral Competent Authority Agreement in December 2017, enabling the exchange of financial account information on foreign-owned accounts.
The September 30 reporting deadline, set out by the Convention, represents the first reporting cycle in what will now be an annual reporting obligation.