Barbados under OECD pressure
Barbados has suffered another setback in its long-running battle with the Organisation for Economic Cooperation and Development (OECD). The Paris-based OECD has told the Freundel Stuart administration that it is only “partially compliant” with “the legal and regulatory framework for the exchange of information” it has signed onto as one of the Global Forum On Transparency And Exchange Of Information For Tax Purposes’ 122 members.
BARBADOS BUSINESS AUTHORITY learnt that Government was informed that the decision followed complaints from some Global Forum members that Barbados was dragging its feet on signing tax information exchange agreements (TIEAs) because of its stated preference for double taxation agreements – also called double tax conventions (DTCs).
This was confirmed in a 122-page Peer Review Phase 2 Implementation Of The Standard In Practice Barbados report, in which the OECD body told Government: “An intermediary follow-up report on the steps undertaken by Barbados to answer the recommendations made in this report should be provided to the [Peer Review Group] within six months after the adoption of this report.”
The OECD was concerned that while “Barbados has continued revising its existing DTCs where they do not meet the standard”, “the pace of concluded new TIEAs has slowed, with only one signature over the last two years”. Its assessment officially covered the period July 2009 through June 2012, but it also commented on aspects of the process in 2013.
“Five Global Forum members have indicated that they have approached Barbados for negotiatiosn on a TIEA or EOI protocol to existing DTCs in 2011 to 2013 without success. Some progress was made during the Phase 2 review, with positive answers sent to two peers, to negotiate a TIEA and a protocol. No answers were provided to three other peers,” the report said.
“It is therefore considered that Barbados is deficient with these three peers, especially with the one which made the request two years ago. The non signature of the two TIEA initialed in 2011 is also unsatisfactory, and the Barbadian authorities declared that they are ready to sign these TIEAs in 2014.
Up to February, Barbados had “exchange of information instruments with 42 partners, 29 which the OECD said “meet the standard”, while “another six will meet the standard once in force”.