‘Our track record is excellent’
Monday February 21 2011 | 01:44 AM

FRANCOISE Hendy, the outgoing Director of International Business, is very confident that Barbados will overcome a recent Global Forum assessment which suggests the country does not meet OECD Tax standard.

The Global Forum revealed that while Barbados has an excellent track record in transparency, it does not currently meet an OECD tax standard.

In an interview with Business Monday, Ms. Hendy stated that Barbados has a good product – it has a good reputation for attracting businesses of substance, and there is transparency in what the country does.

She said that all of these things, along with the proposed measures to amend the Income Tax Act as promised, will go towards strengthening our international reputation.

In the assessment, the Global Forum concluded that while Barbados has made excellent progress in meeting OECD tax standard, technically the country does not currently meet it.

It brought a sharp reaction from Prime Minister Freundel Stuart, who, while taking issue with the report, said the Income Tax Act will be amended to provide a domestic law basis for exchanging tax information with existing Double Taxation Agreement treaty partners.

Ms. Hendy, who will next month take up an appointment with Invest Barbados, Government’s major investment promotion agency, said the challenges facing this country are borne out of a principled position it has always maintained in this business.

She maintained that since Barbados does “things differently, we will always be by ourselves to some extent”.

According to her, “We have a taxation system and do attract tax. So our ability to attract investment is not saying you won’t be taxed in Barbados, because you will be taxed. There is an environment and an infrastructure that supports taxation of all residents in Barbados. So we can only offer you a competitive business environment using a number of instruments, the principle one of which is a Double Taxation Treaty (DTT).”

She said that because Barbados is interested in attracting businesses of substance, this country provides that investor with access to other places.

Hendy maintained that it is incumbent on Barbados to make sure it is able to negotiate tax treaties. “We cannot say forget tax treaties and do just treaties that just provide for information exchange, which is what the rest of the world basically is doing,” she remarked.

“If we do that, then we won’t be able to offer these instruments to our business clients and which makes no sense,” she said.

Noting that Barbados’ tax treaties do include provisions for information exchange, the Director stated: “So we are always going to be challenged because what we have said is that unlike other small countries who have said dispense with taxation, provide them with an environment where there is no taxation and attract businesses that way.

However, Hendy said that Barbados has gone the other route and the harder way by going after businesses with substance that will provide employment for Barbadians along with other benefits.

“We have had tax treaties that include information exchange from the 1970s with the UK, USA, and Canada, our principal trading partners,” she said.

“So we have never sought to use secrecy as a mean to pull investments into Barbados,” she added.