Invest Barbados

 

Barbados to Seek a Supplementary Review of Recent Rating


2020-04-08 00:00:00

Press Statement following the official publishing on the Global Forum Peer Review Report on Barbados by Minister of International Business and Industry, Ronald Toppin

 

 

On April 6, 2020, the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) officially published on the Global Forum’s website, a peer review report assessing Barbados’ compliance with the Global Forum’s Exchange of Information on Request standard.

 

Basically, this standard stipulates that, in relation to transparency, beneficial ownership information (meaning information as to who an entity’s real shareholders are) must be available for all legal persons and legal arrangements.  This information is to be kept at the company’s registered office.

 

It also further stipulates that, in relation to the exchange of information, a country is only considered to be meeting the standard when reliable information, “foreseeably relevant” to the tax requirements of a requesting jurisdiction is available, or can be made available, in a timely manner and there are legal mechanisms that enable the information to be obtained and exchanged.

 

Also of significance, is the fact that it is not enough to have laws in place but the standard requires that there be a regular and comprehensive system of supervision and oversight to ensure that all entities and arrangements are complying with the obligations of the standard including the requirement to maintain legal and beneficial ownership information at their registered offices.

 

The just concluded review focused on the three-year period, July 1, 2015 to June 30, 2018.  Except for the single month of June 2018, this period preceded the current Administration which took up the reins of government at the very end of May, 2018.

 

Of the ten (10) elements reviewed, three (3) received a Partially Compliant rating, one (1) received a Largely Compliant rating and six (6) were found to be (fully) Compliant.  This resulted in an overall rating of Partially Compliant by the Global Forum. Background information is very relevant here.

 

In 2015, under the last Administration, Barbados was assessed by the Global Forum in relation to the development of its legislation, and regulatory framework, for transparency and the exchange of information as well as its practical monitoring and supervision of the implementation of that framework in compliance with the standard.  It was found to be Partially Compliant. Barbados requested a review in 2016 and was then found to be Largely Compliant.

 

Significantly, however, although Barbados was found to be Largely Compliant, there were some deficiencies that Barbados was made aware of and required to address by June, 2018 if it wanted to maintain that Largely Compliant rating or move even higher to a Compliant rating.  These included the need for legislative changes and for ensuring adequate monitoring of the practical implementation by entities of the requirements of the standard.

 

The last Administration failed to address a number of these issues by June, 2018 and that has resulted in the Partially Compliant rating Barbados just received.

 

And it is important to note that this rating was prescribed despite the best efforts of the current Administration because, during the course of last year, this Administration went to Parliament and amended the Companies Act, the Corporate and Trust Services Providers Act, the Limited Partnerships Act and the Societies with Restricted Liability Act.  It also repealed the Foundations Act.  All of this was to have been done by the last Administration by June, 2018.

 

In addition, and just as, or more, important, we have brought a significant number of companies under the purview of Corporate and Trust Service Providers so that they can be more effectively monitored for compliance with the requirement to have accurate and up-to-date beneficial ownership information.

 

We have also requested, and obtained approval for, additional staff for the International Business Unit to enable that Unit to be able to carry out on-site inspections, and monitor compliance, of the Corporate and Trust Service Providers and their clients with their legal obligations, both in relation to the requirement to have accurate and current beneficial ownership information as well as the need to have reliable accounting records.

 

In addition, the Barbados Revenue Authority has undertaken and completed a review of its internal processes in relation to the effectiveness of its communication with states legitimately requesting information, with the objective of ensuring that the quality of communication is much improved. 

 

The additional staff in the IBU, which is to function as a Compliance Unit, will be working closely with the Barbados Revenue Authority to ensure that information requested by the competent Tax Authorities of other jurisdictions is supplied in a timely manner.

 

In the interim, seven (7) consultants were operationalized last year to conduct on-site inspections with the result that 46 such inspections have been done to date.

 

Despite all of these efforts, which were noted in the OECD’s Report, they still gave Barbados a Partially Compliant rating because the period being reviewed was July 2015 to June 2018 and these actions had not been taken by the previous Administration prior to June, 2018.

 

The Government of Barbados remains committed to the work of the Global Forum relative to international cooperation in the area of taxation and, in light of all that has been done by the current Administration in relation to legislative amendments as well as the significant improvements made to ensure the practical implementation of the relevant laws and rules, Barbados will be seeking a Supplementary Review in accordance with the time stipulated.

 

Source: Barbados Government Information Service