The European Union on Monday took Barbados off its blacklist of non-cooperative tax jurisdictions, triggering celebrations in Bridgetown’s international business community.
But in a twist of fate that continues to engulf the Caribbean in a saga of charge and counter-charge over compliance, Dominica has been blacklisted just as Barbados has been removed from the list, according to the Council of the EU in a press statement.
Barbados was added to the list in October 2020 after it received a ‘partially compliant’ rating from the Global Forum. It has now been granted a supplementary review by the Global Forum and has therefore been moved to a state-of-play document (Annex II of the Council conclusions) pending the outcome of this review.
The EU said: “The Council today adopted conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes, deciding to add Dominica to the EU list of non-cooperative jurisdictions (Annex I of the conclusions) and to remove Barbados from that list.
“The list includes jurisdictions worldwide that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the reforms necessary to comply with a set of objective tax good governance criteria. These criteria relate to tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.”
The changes to the list take into consideration the ratings recently released by OECD Global Forum for Transparency and Exchange of Information (Global Forum) as regards exchange of information on request. For the purposes of the list, the EU requires jurisdictions to be at least ‘largely compliant’ with the international standard on transparency and exchange of information on request (EOIR).
Minister of International Business Ronald Toppin welcomed the news from Brussels, declaring it the result of the administration’s hard work.
He said: “Over the period July 2015 to June 2018 Barbados was required to meet certain obligations and those obligations were not met. In fact, there were ten things Barbados had to do to put it in simple terms and of the ten Barbados did seven and failed to do the other three. This is what resulted in Barbados being rated as partially compliant by the OECD in April last year.
“This administration, therefore, had to set about to do in a very short period of time what really should have been done over a three-year period, but we stuck to the task and the outcome today is very, very pleasing.”
The Barbados International Business Association (BIBA) said in a statement it is relieved the EU had corrected its “flawed stance” and praised the Ministry of International Business for its efforts in getting Barbados off the list.
The body claimed that Barbados would have lost “tremendous earning potential” as a result of the blacklist.
It said: “BIBA, the Association for Global Business joins with the Government and people of Barbados in celebrating this landmark on our continued journey as a leading international financial centre. Barbados has now been placed on the state-of-play document (Annex II) and granted a supplementary review by the Global Forum.
“While the global business and financial services sector has been a stable source of employment and earner of foreign currency for the economy as represented in the recent economic report from the Central Bank of Barbados, Barbados would have lost tremendous earning potential as a result of being blacklisted because of the implied risk associated with investing in a blacklisted country.”
BIBA said it was important Barbados remained off the list.
“Now we must work not just to remain off this list, but also to be upgraded from Annex II, thereby evidencing to all that Barbados has a functioning tax regime that is by any definition, fair and transparent,” BIBA said.
“Our expectation is that this will be possible as long as the goal post is not shifted. We say this as we are all aware of the constant crusades of the likes of OXFAM to seemingly keep small international financial centres like Barbados under the thumb of large developed nations.”