The Bahamas government hosted an Industry Briefing Session on Base Erosion and Profit Shifting (BEPS) and other International Initiatives facing the financial services sector. Remarks were brought by the Deputy Prime Minister and Minister of Finance, Hon. K. Peter Turnquest, The Attorney General, Hon. Carl Wilshire Bethel Q.C. and The Minister of Financial Services, Trade, industry and Immigration – Hon. T. Brent Symonette.
Deputy Prime Minister and Minister of Finance, Hon. Peter Turnquest in opening the briefing session indicated that the government was proactively dealing with matters relative to the financial services to avoid The Bahamas being in a reactive mode. He outlined that as a matter of priority we must determine our position on Base Erosion and Profit Shifting (BEPS).
Hon. T. Brent Symonette indicated that efforts are well underway with respect to improving efficiencies in Immigration processes, implementation of the Common Reporting Standards, Arbitration, Centre for Excellence, Enhancement of government agencies to facilitate ease of process and the ease of doing business as we seek to reposition the industry for growth.
The Attorney General, Hon. Carl Bethel, gave a legislative update on items that would impact the industry including the Proceeds of Crime Bill 2017 and the Financial Transactions Reporting Bill 2017. Attorney General Bethel stressed that embracing change was key to the growth of the sector. The Honourable Attorney General shared that the legislative changes are being made to some extent to address opportunities identified during the Bahamas’ recent Caribbean Action Task Force (CFATF) Mutual Evaluation which took place in 2016. However, the ultimate objective is proactively address emerging identified risks facing the sector.
Base Erosion and Profit Shifting (BEPS) A presentation on BEPS what BEPS is, what is driving the initiatives and the steps that must be taken by the Bahamas to implement BEPS minimum standards were outlined.
Base Erosion and Profit shifting (BEPS) has been defined by the OECD as tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS. The Bahamas will have to indicate a definitive position on BEPS by December 2017. The BEPS Package consisting of reports on 15 actions designed to be implemented globally into domestic legislation and through tax treaty provisions. In committing to BEPS, countries can select to commit to 4 minimum standards:
(Action 5): Countering Harmful Tax Practices (Action 6): Treaty Shopping (Action 13) Transfer Pricing Documentation and Country-by-Country Reporting (Action 14) Dispute Resolution
An update was also provided on The Common Reporting Standard.
The CEO & Executive Director of BFSB, Miss Tanya McCartney in response to the industry briefing stated that: “Since the new administration came to office we have been in dialogue on the key priorities for the financial services sector. We have shared a strategic plan with the government which highlights the key levers that must be addressed as we seek to reposition this important pillar of our economy. We are pleased that ease of doing business and immigration policy and process reform are being given focused attention. We also see the need for a review of The Bahamas’ tax system with the objective of rationalizing it, enabling the Bahamas to enter into bilateral investment agreement and tax treaties that are beneficial tothe overall economy. Further, it is imperative that we get ahead of the regulatory initiatives that face our sector.”