Thursday, July 30, 2009

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Tax network to expand By CANDIA DAMES ~ Guardian News Editor ~ candia@nasguard.com: Amid ongoing concerns that The Bahamas could once again be blacklisted by the powerful bloc of industrialized nations, the government announced last evening that it is negotiating tax information exchange agreements (TIEAs) with 14 countries. The minimum number of TIEAs required by a jurisdiction to satisfy the standard set by the Organization for Economic Cooperation and Development (OECD) is 12. The government advised that negotiations have commenced with Canada, the United Kingdom, Australia, Spain, Germany, France, Turkey and the Nordic countries (Norway, Sweden, Finland, Denmark, Iceland, Greenland and the Faroe Islands). "It is the intention of The Bahamas to conclude negotiations on these agreements by the end of this year," said Minister of State for Finance Zhivargo Laing in a press statement. The government also announced that it has initiated discussions for an agreement on tax information exchange with the People's Republic of China, and proposes to initiate discussions with Mexico, Brazil, Japan, Ireland, South Africa and India. "In addition to a new legislative framework to support the expanded network of tax information exchange agreements, it is proposed that the Criminal Justice (International Cooperation) Act will be amended to enable cooperation with all countries in relation to tax offenses," the statement said. "The government is confident that these activities will allow The Bahamas to meet the Exchange of Information standards that have been set by both the G-20 and the OECD on the shortest possible timetable and within the given time frames, while avoiding any potential adverse listing." The statement from the government came nearly four months after the OECD named The Bahamas on a list of 38 jurisdictions that have failed to substantially implement the internationally agreed tax standard. Global leaders also vowed at that time to crack down on so-called tax havens while declaring an end to bank secrecy. There have been growing concerns that tax havens have substantially contributed to the global economic crisis that is still unraveling. The OECD progress report in April noted that The Bahamas committed in 2002 to the internationally agreed tax standard, which was developed by the OECD in cooperation with non-OECD countries. It requires "exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes. It also provides for extensive safeguards to protect the confidentiality of the information exchanged." Speaking in the House of Assembly in March, Prime Minister Hubert Ingraham said The Bahamas reaffirms its commitment recorded in the March 2002 agreement with the OECD and recognizes significant advances in commitments to broader application of OECD standards of transparency. The prime minister said greater standards of transparency and exchange of information are evolving to become the international standards applicable to all countries. He noted that many countries have now indicated their adoption of the standards being required and soon to be applied by the OECD for transparency and exchange of information. Ingraham said at the time that there are a number of outstanding requests for The Bahamas to enter into TIEAs and each request will be considered on an individual basis. The government's statement yesterday noted that all significant financial centers that were formerly opposed have now declared their commitment to the internationally agreed standards, and are all engaged in implementing the standards to accommodate the sharing of tax information. The Bahamas government signed a TIEA with the United States government nearly a decade ago. Thursday, July 30, 2009