Barbados under fire from OECD on tax information exchange

31 January 2011

The OECD Global Forum has published reports on ten more jurisdictions' commitment or otherwise to tax information exchange. Four of them - including, surprisingly, Barbados - were ruled to have failed the first stage of the OECD's examinations.

Barbados was criticised for failing to sign tax information exchange agreements (TIEAs) with other jurisdictions that had requested them. The TIEAs that it has signed include restrictions unacceptable to the OECD, while the jurisdiction also has secrecy provisions that limits tax authorities' access to information on some trusts.

The three other jurisdictions to fail the so-called "Phase One review" were San Marino, the Seychelles, and Trinidad and Tobago. They have been told to deal with the OECD's criticisms before they will be allowed to move on to Phase Two of their evaluations.

San Marino is still over-protective of banking secrecy, though has recently enacted some legislation that may improve its compliance marks, said the Forum. The Seychelles fails to supply beneficial ownership information on offshore entities, while the TIEAs signed by Trinidad do not allow full access to information by its tax authorities.

Guernsey also had a mixed Phase One result. The Forum team recognised that its legal framework is satisfactory, but some accounting issues remain to be addressed: "The domestic laws do not consistently require the retention of reliable accounting information that includes underlying documentation in all instances", said the OECD report. 

The other five jurisdictions being assessed all underwent a joint Phase One & Two examination. Australia, Denmark, Ireland and Norway all passed, but Mauritius was found wanting in its continuing protection of banking secrecy against foreign tax authorities.

The Mauritius-India tax treaty came in for particular criticism. The Forum decided that it could easily be abused to allow individuals to move funds between the two countries to avoid domestic tax. Mauritius also allows companies to be registered by nominees without checking whether the named shareholders are beneficial owners.

The Forum also complained that Mauritius has not exchanged tax information with India in the last three years, despite the treaty.

• This is the second tranche of compliance reports to be released by the Forum. The first eight reports were published in September last year (see STEP story at the time).

 

Sources

 

OECD

Times of India

Domain-B

 

 


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