There’s another way
Wednesday January 11 2012 | 02:12 PM

It is time to re-evaluate the strategy on pursuing Double Taxation Agreements (DTAs), advised President of the Institute of Chartered Accountants of Barbados (ICAB), Andrew Braithwaite.

He spoke yesterday at the Faculty of Law and ICAB Regional Tax Treaties and Tax Information Exchange Agreements (TIEAs) and OECD standards function in the Moot Court at UWI.

Braithwaite said that while other jurisdictions have rushed to sign Tax Information Exchange Agreements (TIEAs) in order to satisfy the international community, Barbados’ initial strategy was to refuse to sign TIEAs and insist on DTAs.

“This refusal to sign TIEAS as a first resort was viewed as unco-operative and viewed as problematic. This is a good time for us to re-evaluate our strategy on actively pursuing DTAs,” he told the event.

He explained that the global forum on transparency and exchange of information has completed phase one of a peer review of Barbados and that the island’s framework for the exchange of tax information was found to be deficient in a number of areas. 

“One of the recommendation of the review team is that Barbados should agree to all request from other jurisdictions to sign TIEAs,” he said.

“In doing so we should give due consideration to any estimate of the volume of international business that has been directly generated as a result of each of our existing DTAs,” said the ICAB President.

The President added, “We need to consider whether we need to vigorously market the island as an international business jurisdiction, we should also consider the sustainability of our current international business regime which grants preferential tax rates to such entities.”

He reasoned that as a result of global forum peer review “we will now need to make a number of amendments to existing legislation, and this should be a reminder of our weakness in our area of legislative drafting, and it is fair to say we can do a lot better in the area of developing and amending legislation.”

He insisted that Barbados must address this “if we are to compete successfully in international business”.

The OECD challenge has become a pressing issue for Barbados as an international financial centre, and the question of whether the international community wants to shut down Barbados as an international tax jurisdiction has been an area of concern .

Braithwaite indicated, “ICAB has proposed the establishment of a joint public private sector working group on law reform which will continuously review legislation and recommend changes. We believe that initial proprieties should be given to commercial law areas including the modernisation of the companies act.

“We hope that both those in the Faculty of Law at University of the West Indies and Barbadian International Business Association (BIBA) agree with this recommendation and lend their expertise,” he said.

George Huston, Minister of International Business said that Barbados is making significant progress.

According to him, “The Phase Two review when we proceed to that will focus more on the practical application on the legislative framework. We expect once we reach phase two the process should move swiftly along which should happen in first half of 2013, so we have approximately a year to ensure that we are in shape. We are in the process of updating our various tax treaties.”