The Organization for Economic Co-operation and Development (OECD) is preparing for a peer review process with The Bahamas next month that involves this country’s tax treaty dispute resolution process, which the global financial watchdog calls a “top priority” for its base erosion and profit shifting (BEPS) initiative, according to a release from the organization.
The OECD’s assessment schedule includes a footnote on The Bahamas that states, “If Turks and Caicos Islands and The Bahamas do not have any tax treaties by August 2019, their peer review will be deferred.”
Guardian Business has sought clarity from government on the state of the tax treaties required by the OECD in order for the peer review to be carried out, but is still awaiting a formal response.
“The Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the BEPS Action Plan was launched in December 2016, with the peer-review process of the first eight batches now well underway,” the OECD release states.
“The peer-review process is conducted in two stages. Under stage one, implementation of the Action 14 minimum standard is evaluated for Inclusive Framework members according to the schedule of reviews. Stage two focuses on monitoring the follow-up of any recommendations resulting from jurisdictions’ stage one report.
“The OECD is now gathering input for the stage one peer reviews of Andorra, Anguilla, The Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Faroe Islands, Macau (China), Morocco and Tunisia, and invites taxpayers to submit input on specific issues relating to access to MAP, clarity and availability of MAP guidance and the timely implementation of MAP agreements for each of these jurisdictions using the taxpayer input questionnaire.”
BEPS was one of those initiatives the Bahamian government scrambled to come into compliance with in order to avoid being greylisted or blacklisted.
While the OECD release does not talk about the consequences of having the peer review deferred, the organization has been strict and swift in its rebuff of international financial centers like The Bahamas.