• Email to friend
  • The Nassau Guardian Facebook Page
  • RSS Feed
  • Pinterest

Banner


sub_save_img

Bahamas on Colombia ‘tax haven’ black list

Minister says Bahamas is assessing response
ALISON LOWE
Guardian Business Editor
alison@nasguard.com

Published: Oct 15, 2013

  • Share This:

    Share on Facebook Share on Twitter Email to friend Share

  • Rate this article:

The Colombian government has placed The Bahamas on a list of global tax havens along with 43 other jurisdictions, applying a penalty tax rate of 33 percent on all assets moved into these countries as it seeks to cut back on what its tax authority has estimated is at least $10.6 billion in lost tax revenue annually.

In a statement issued last week, Minister of Finance for Colombia Mauricio Cardenas said the “party is over” for those who use tax havens, of which The Bahamas has been identified as one.

On Friday, Minister of Financial Services Ryan Pinder told Guardian Business that the government will be assessing the way forward with respect to the “blacklisting” through engaging with the financial services sector to ascertain how much business the industry currently conducts with Colombia and how it may hope to grow those financial flows going forward.

Speaking with Guardian Business from Montevideo, Uruguay, where he has been attending a STEP LatAm conference along with representatives from the Bahamas Financial Services Board (BFSB) and the financial sector, Pinder said attention will now turn to whether The Bahamas wants to negotiate and sign a tax information exchange agreement (TIEA) with

Colombia in order to be removed from the list.

A TIEA creates an official system for the sharing of tax information between two countries.

Cardenas has identified the signing of a TIEA as one way to be removed from the list.  However, a decree issued by the government indicates that the government will only add or exclude countries from the list once a review has occurred a year from now.

“What they did is designate countries tax havens for tax purposes that they don’t have a TIEA with; they list it as a tax haven with the result being certain withholding rates and transfer rates on cross border transfers are imposed,” said Pinder.

“We are aware of it, and we are discussing with the industry and internally to see whether, given the level of business that exists, it’s advisable that we advance TIEA negotiations with them or not.”

Pinder said that “current indications” are that there is not a significant amount of business coming from Colombia into The Bahamas, but developments such as the Foreign Account Tax Compliance Act (FATCA) might make it sensible for The Bahamas to seek to negotiate with the Latin American country in order to protect future business streams.

The Bahamas has for some time been identifying Latin America as a major new market for financial services, in light of clampdowns on the shifting of citizens’ assets abroad by countries such as the UK, the U.S., France and others.

Such a shifting focus explains why Pinder and others have traveled to Uruguay to attend the STEP conference, where Pinder suggested his ministry and the sector are seeking to identify new source markets for financial services clients coming into The Bahamas.

“We do believe that with FATCA coming into play and more and more Latin American countries doing reciprocal FATCA agreements, that this might be an opportunity to get those assets that are historically banked in the U.S. to be mobile capital, and The Bahamas may be a jurisdiction that might want to bank those assets, so we’re looking at it in context of growth,” said Pinder.

The minister said it is not unusual for non-Organisation for Economic Co-operation and Development (OECD) countries to seek to address issues of tax evasion.

“Mexico has had a tax haven list; we’re off that.  Argentina had a tax haven list; we signed a TIEA with them.  So Latin American countries have historically had these lists for these purposes.  Certainly, no area of the world is immune to evaluating whether they have true revenue loss from illegal tax practices, but we always make the argument that we are a country of legitimacy and substance and tax competition is valid.”

The Bahamas has signed over 28 to date, since the OECD announced in 2009 that it would add this country to a “grey-list” of nations deemed “non-cooperative” in matters of tax information exchange transparency until such time as the jurisdiction signed a minimum of 12 TIEAs.


This content has been locked. You can no longer post any comment.

 

Caribe 2016 Cleveland

  • http://www.ansbacher.bs
  • http://www.walkinclinicbahamas.com
  • http://www.cfal.com
  • http://www.colinageneral.com
  • http://www.Colina.com
Banner