Minister of International Business and Industry Ronald Toppin today insisted that Barbados has not been blacklisted by the Organization for Economic Cooperation and Development (OECD) over its residence-by-investment programme, in the face of its inclusion among the region’s so-called “golden passport” schemes.
In a report released yesterday, the global forum of the world’s richest nations listed the island among 21 countries whose Citizenship by Investment or Residence by Investment (CBI/RBI) programmes are deemed a threat to efforts to combat tax evasion.
According to the OECD report, Barbados was named because of its provisions for a Special Entry and Residence Permit which allows non-nationals to enter and depart the island as they wish.
Toppin, who is attending the OECD Forum on Harmful Taxation along with officials from the Ministry of International Business said they discussed the matter with OECD officials and were assured that the list was not a blacklist.
“The Ministry was assured that the characterization of the list of jurisdictions as a “blacklist” is completely inaccurate. The Barbados delegation was also informed that a statement of clarification will be forthcoming from the OECD very shortly. Barbados is, therefore, under no obligation to take any measures to change its High Net Worth Individual Special Entry Permit regime,” he said in a statement.
“The OECD report simply provides practical guidance to financial institutions on how to undertake enhanced due diligence on clients that are citizens or residents of the countries with Citizenship By Investment (CBI) or Residence By Investment (RBI) programmes so as to prevent cases of Common Reporting Standard (CRS) avoidance and tax evasion,” he claimed.
While pointing out that Barbados does not have a citizenship by investment programme, the OECD report included Barbados residence-by-investment programme for high net worth individuals, which was promoted by the Freundel Stuart administration.
Said the OECD report: “While residence and citizenship by investment (CBI/RBI) schemes allow individuals to obtain citizenship or residence rights through local investments or against a flat fee for perfectly legitimate reasons, they can also be potentially misused to hide their assets offshore by escaping reporting under the OECD/G20 Common Reporting Standard (CRS).
“In particular, Identity Cards and other documentation obtained through CBI/RBI schemes can potentially be misused to misrepresent an individual’s jurisdiction(s) of tax residence and to endanger the proper operation of the CRS due diligence procedures.”
After the rich nations’ thinktank assessed over 100 CBI/RBI schemes globally, it identified 21 schemes that “potentially pose a high-risk to the integrity of CRS” and listed Barbados.
The report went to say that “potentially high-risk CBI/RBI schemes are those that give access to a low personal income tax rate on offshore financial assets and do not require an individual to spend a significant amount of time in the location offering the scheme.”
But Toppin disclosed that the Director of International Business told the forum of Barbados’ moves to amend its legislative regime and received a positive response.
“The OECD/Forum on Harmful Tax Practices (FHTP) Secretariat accepted the proposals by the Barbados team and urged Barbados to finalize the amendments. Barbados will report again in January 2019.
“These positive outcomes are in line with Barbados’ expectations and our engagement with the FHTP is testimony to Government’s continuing commitment to the adherence of international standards and tax rules that promote transparency and fairness in global trade and commerce for individuals and businesses alike.”
The Government statement said Barbados is a member of the OECD’s Global Forum on Transparency and Exchange of Information and has ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Barbados has also implemented the CRS and is compliant with the international standard for the exchange of information established by the Global Forum.