Barbados’ reputation as a home of “serious” business and a “significant” player in international business is being enhanced with the adoption of a United States law which targets non-complaint US taxpayers with foreign accounts, Minister of International Business Donville Inniss has contended.
In fact, Inniss suggested that the Foreign Accounts Tax Compliance Act (FATCA) had its benefits since it allows governments to collect their fair share of taxes, as well as collect information on taxpayers.
FATCA, which was passed by the US Congress in 2010, requires foreign financial institutions to report to the US tax office, the Inland Revenue Service (IRS), information about financial accounts held by US taxpayers, or by foreign entities in which US taxpayers hold a substantial ownership interest.
And Inniss has sought to assure Barbadians that far from being an attempt at witch-hunting, the law has benefits for the country.
“I want to assure Barbadians, as is has to do with FATCA, that these things are not designed as enshrining any witch-hunt on taxpayers either here or abroad.
“And we in Barbados have certainly accepted that we will not do anything that is deemed to be harmful to global taxplanning and particularly our tax policies. And therefore our commitment to working within the global forum arrangement, we believe to be the best possible mechanism for that to happen. This certainly enhances Barbados’ reputation as a domicile of serious business and as a significant player in the international business arena,” Inniss said.
The minister spoke to reporters after witnessing the signing of a multilateral agreement on tax information.
Barbados was among close to a dozen countries which last night signed the Multilateral Competent Authority Agreement under which signatories pledge to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters.
The Convention is a pact developed by the Organization for Economic Cooperation and Development (OECD) and the Council of Europe to regulate information exchange between states regarding tax matters and is based on FATCA implementation agreements.
Inniss said it should help Barbados become more complaint with the automatic exchange of information regime with various countries, especially with regard to FATCA.
“For us in Barbados this fundamentally means that gone are the days when we did bilateral tax exchange of information agreements, hitherto Barbados focused on signing tax exchange agreements with individual countries. With this multilateral arrangement now it is a lot easier because you don’t have to negotiate by bilateral with each country, but we have all signed on within the mechanism having agreed with to the framework. So all of us who have signed on will now be able to share information within the arrangement,” he explained.
Antigua and Barbuda, Belize, Grenada, Japan, Marshall Islands, Samoa, The Cooke Islands, St Lucia, St Vincent and the Grenadines and St Martin were present for last night’s signing. Bulgaria and Niue were absent but they signed the document in France and sent their copies.
Head of the Barbados Revenue Authority (BRA) Margaret Sivers signed on behalf of Barbados, while representatives of agencies that are responsible for tax information from the other jurisdictions signed on behalf of their countries.