Japandouble taxation deal
Although the Tax Information Exchange Agreement(TIEA)signed with Japan yesterday is the twenty-third for The Bahamas, for this jurisdiction, it is the first of its kind as it includes double taxation relief.
The signing ceremony took place at the Ministry of Foreign Affairs with Deputy Prime Minister and Minister of Foreign Affairs Brent Symonette signing for The Bahamas and His Excellency Hiroshi Yamaguchi, Japan’s ambassador to Jamaica and non-resident ambassador to The Bahamas, signing for Japan.
“[This TIEA]is a first, but by no means the last, of its kind for The Bahamas. It demonstrates the range and diversity of tax cooperation that countries have the opportunity to engage in, bilaterally, for their mutual economic benefits,”said Symonette.
Previous TIEAs allowed for cooperation on tax matters at internationally-accepted standards, but this TIEA goes further. It spells out certain exclusive taxing rights between the two nations on income for designated groups of students, pensioners and government employees.
“This is indeed epoch-making, because this is the first agreement which requires ratification procedures at Japan’s National Diet,”said Yamaguchi. The National Diet of Japan refers to its two legislative bodies, the lower and upper houses.
The ambassador said it took 11 past non-resident ambassadors to allow him–the twelfth–to sign the historic agreement. He said he hoped the agreement would be ratified soon.
The TIEA with Japan brings The Bahamas to a total of 17 agreements with OECD member nations and nine with G-20 members.
In addition to the implications for The Bahamas’reputation as a jurisdiction for international financial services, the deputy prime minister said that the greater level of engagement with Japan may increase tourism opportunities from the country, including high net worth and ultra-high net worth individuals.
He said they could use The Bahamas as their base in this part of the world for depositing and managing wealth.
The cooperation represented in this TIEA may also lead to maritime opportunities as The Bahamas is seeking to become a category C member of the International Maritime Organization and Japan is seeking to put one of its nationals in the seat of the secretary general. The ambassador said he hoped the
panese candidate would have the general support of The Bahamas.
According to Yamaguchi, there were many things supported by the TIEA, including anything related to the sea, such as tourism and shipping.
He also said that research was being done to see how the Japanese private sector could participate in infrastructure development in the country, of which he said there were”very high level prospects”.
In September of last year, Japan and CARICOM reached an agreement in Tokyo to strengthen partnerships and collaboration on a number of issues. The ambassador said that there should be action plans coming out of that meeting to develop areas of common interest.