The government will table proposed amendments to the Commercial Entities (Substance Requirements) Act when the House of Assembly meets today.
The Commercial Entities (Substance Requirements) Act, 2018 was among a package of legislation passed in December 2018 aimed at implementing measures to ensure compliance with international standards on tax governance and transparency.
Under the act, commercial entities must prove that they have a substantial economic presence in The Bahamas by having income-generating activities. They must also show management and control over the business entity locally.
The Commercial Entities (Substance Requirements) (Amendment) Bill, 2019 expands and clarifies various definitions, and substance and reporting requirements.
The bill also includes proposed changes related to holding companies and resident criteria.
The amendments follow the latest round of high-level discussions between senior government officials and the European Commission, and take into account feedback received from the commission following an assessment of the legislation.
The government worked closely with key stakeholders in the financial services sector in preparing the amendments to the Commercial Entities (Substance Requirements) Act. International advisors were also consulted.
A meeting was held on Monday, February 11, 2019 with members of the wider financial services industry to outline the proposed amendments and invite feedback.
The government has also met with the opposition to discuss the proposed changes.
The amendments reinforce the government’s intent to take all necessary steps to safeguard the financial services sector and maintain the industry’s competitive edge, and ensure the removal of The Bahamas from all watch lists in the shortest timeframe possible.