On October 16th, 2017 the Organisation for Economic Cooperation and Development’s (OECD’s) Forum on Harmful Tax Practices (FHTP) published its Harmful Tax Practices – 2017 Progress Report on Preferential Regimes which specifically deals with Action 5, one of the 15 initiatives listed in the OECD’s Action Plan to curb Base Erosion and Profit Shifting (BEPS) worldwide. The report has implications for the ongoing use of Barbados’ suite of international business vehicles as well as for current corporate tax rates applicable to them. As a result, the existing incentive framework for these entities will need to be adjusted; and new requirements on which the ongoing use of low tax rates are conditioned, must be carefully analysed – both, in order to properly conceptualise and implement the new iteration of Barbados’ international business sector. The Barbados International Business Association (BIBA) wishes to acknowledge and address the speculations, rumours and misinformed statements that the Barbados International Business Companies are being “closed down”. It is true that the OECD has established global standards to achieve tax transparency and fairness in tax systems which will require Barbados to make some revisions to its international business regime.
It is understood that the pending revisions will create some uncertainty for service providers and investors in the Barbados international business sector. However, these revisions are intended to satisfy the requirements of the OECD while ensuring the viability of the Barbados international business sector.
Over the past few months, the government has engaged and continues to engage BIBA, other strategic partners, and stakeholders soliciting feedback and comments on the regimes’ revisions. BIBA has been given the assurance that a team representing the international business sector will have the opportunity to engage in the critical discussions needed to determine the nature of the proposed amendments and to review and comment on associated legislative drafting.
BIBA is committed to ensuring that the international business sector remains sustainable and competitive and we aim to keep you updated on developments as the process moves forward.
Regards, The President, the Board of Directors and the Executive Director of BIBA