The Bahamas has avoided being blacklisted as a tax haven by the European Union (EU), escaping inclusion on the damaging list it was placed on last year.
“The Bahamas was not included on the European Union’s list of non-cooperative jurisdictions for tax purposes, which was updated by the EU’s Economic and Financial Affairs Council today,” the Ministry of Finance announced yesterday.
The ministry further advised that dialogue between the government and the EU is ongoing.
“While we were not added to the list, the EU will continue to monitor The Bahamas along with the other jurisdictions as a part of its ongoing assessment of the effectiveness of our measures as time goes on and as its process evolves,” the ministry said.
The Bahamas and other jurisdictions pegged as tax havens were placed on the blacklist last March.
However, since then, the government has been working feverishly to comply with the requests of the EU’s Code of Conduct Group (COCG) in order to realign itself with the demands of the EU with regard to compliance.
While it was initially thought The Bahamas was listed because “its practices were deemed not in line with EU standards”, it was later discovered that the government had simply failed to make commitments at a high political level in response to all of the EU’s concerns.
Prime Minister Dr. Hubert Minnis said yesterday, “The government is very encouraged and pleased by the EU’s decision to not include The Bahamas on its list of non-cooperative jurisdictions.
“The decision is the result of a strategic and comprehensive approach by the government’s team in consultation with stakeholders.
“I would like to thank the private sector for its valuable contribution, and reiterate our government’s commitment to continue to do what is necessary to maintain the standing of The Bahamas as a respected international financial center.”
The government’s statement advised that it participated in a number of bilateral meetings with the EU last year and implemented broad measures to prevent the use of Bahamian corporate vehicles as conduits for tax avoidance and evasion.
Over the last several months, several bills were passed in Parliament to help facilitate the cooperation of The Bahamas as a financial jurisdiction and curb harmful tax practices.
The bills include the Multinational Entities Financial Reporting Act, 2018; the Commercial Entities (Substance Requirements) Act, 2018; the Removal of Preferential Exemptions Act, 2018; and the Beneficial Ownership Act, 2018, among others.
Deputy Prime Minister and Minister of Finance Peter Turnquest said yesterday, “Our ongoing cooperation with the EU and the positive evaluation of the country sends a strong signal to the international community that The Bahamas’ financial services industry is stable and governed by a sound regulatory regime.
“The government will continue to promote engagement with all stakeholders on these issues to ensure The Bahamas remains the preferred jurisdiction of choice for financial services in the region.”
The announcement comes one month after The Bahamas was added to another blacklist by the European Commission due to “strategic deficiencies” in its anti-money laundering (AML) and countering the financing of terrorism (CFT) legislation.
However, the European Union rejected the commission’s blacklist because it “was not established in a transparent and resilient process that actively incentivizes affected countries to take decisive action while also respecting their right to be heard”.