Remarks by Minister Inniss at the IBFS 2016 Conference
Opening Remarks by the Honourable Donville Inniss at the Occasion of the 2016 IBFS Conference
New Global Forum peer reviews highlight ever-increasing compliance with tax transparency standards
14//03/2016 – The world’s leading forum on tax transparency published 10 new peer review reports today, pointing to ever-increasing compliance with the internationally-recognised standards to curb tax evasion through the exchange of information. The new reporting from the Global Forum on Transparency and Exchange of Information for Tax Purposes demonstrates growing worldwide compliance with the international standard for exchange of information on request and deep engagement to push forward transparency objectives of the group, which brings together 132 countries and jurisdictions on an equal footing to tackle offshore tax evasion. The Global Forum published Phase 1 reports on Croatia and Tunisia, which assessed their legal and regulatory frameworks for transparency and exchange of information on request. These countries were assessed to have legal frameworks in place to enable them to move to Phase 2 of the review process, which will assess exchange of information practices. Eight new Phase 2 reviews of exchange of information practices – for Botswana, El Salvador, Georgia, Kenya, Mauritania, Nigeria, Niue and Saudi Arabia – were also published by the Global Forum. It allocated ratings for compliance with the individual elements of the international standard, as well as an overall rating for each jurisdiction which is “Largely Compliant.” The Global Forum has now completed 225 peer reviews and assigned compliance ratings to 94 jurisdictions that have undergone Phase 2 reviews. The first round of reviews for all member jurisdictions will be completed by the end of 2016, as required under a 2009 mandate that governs the peer review process. In a demonstration of the increasing relevance of its work and its reach, three new members joined the Global Forum in 2016 – Guyana, Chad and Maldives. For further information, journalists should contact Monica Bhatia, Head of the Global Forum Secretariat (+33 1 6 10 14 04 22) or the OECD Media Office (+33 1 4524 9700). Compliments OECD.org
EU, Canada Revise Investment Protections in Trade Deal
The EU and Canada announced on Monday that they have revised the investment protection terms in their bilateral trade pact, with the new version now including an investment court system that Brussels is hoping to pursue in other trade agreements – including with the US. “We have responded to Canadians, EU citizens, and businesses with a fairer, more transparent system,” said EU Trade Commissioner Cecilia Malmström and Canadian Trade Minister Chrystia Freeland in a joint statement. The changes were made during the “legal scrub” of the trade deal, which is known as the Comprehensive Economic and Trade Agreement (CETA). The original negotiations for the pact were completed in 2014, following over six years of talks. “With the changes we have agreed we bring CETA fully in line with our new approach on investment protection in trade agreements. In particular, we demonstrate our determination to protect governments’ right to regulate, and to ensure that investment disputes will be adjudicated in full accordance with the rule of law,” said the European Commission’s First Vice President, Frans Timmermans. Eyes on international investment court Under the terms of the revised investment chapter, the EU and Canada will now put in place a 15-member, permanent tribunal to adjudicate investment-related disputes, with five EU nationals, five Canadian nationals, and five nationals of third countries. The court’s members will be appointed by country governments, with three people judging a given case – one from Canada, one from the EU, and one from elsewhere. There will also be an appellate mechanism – rather than just potential plans to create one, as had been originally agreed – from the start of the deal’s entry into force. The appellate tribunal will be able to make changes to the earlier tribunal’s award on the grounds of errors or application in law; “manifest errors” regarding facts; and also Article 52(1) of the ICSID convention, which involves issues on how the tribunal was constituted, whether it exceeded its powers or if an individual member showed corruption, or if the reasons for the award were not stated or procedures were not upheld. ICSID refers to the International Centre for Settlement of Investment Disputes, an independent institution set up under the World Bank Group to provide arbitration and conciliation in complaints between governments and investors. Notably, Canada has agreed that it shares the EU’s goal of setting up an international version of this court system, one that will eventually replace the one in CETA if agreed. “The Parties shall pursue with other trading partners the establishment of a multilateral investment tribunal and appellate mechanism for the resolution of investment disputes. Upon establishment of such a multilateral mechanism, the CETA Joint Committee shall adopt a decision providing that investment disputes under this Section will be decided pursuant to the multilateral mechanism and make appropriate transitional arrangements,” says Article 8.29 of the trade pact. Right to regulate Another revision touted by the two sides involves the terms used to describe each party’s right to regulate, which officials say provides stronger guarantees than what was in the original version. “For the purpose of this Chapter, the Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, safety, the environment or public morals, social or consumer protection or the promotion and protection of cultural diversity,” the agreement reads under Article 8.9. The agreement continues on to say that “the mere fact that a Party regulates, including through a modification to its laws” such that it has adverse implications for either an investor or their expectations does not mean that the party has violated its commitments under the CETA investment chapter. The document also outlines terms regarding whether a country’s decision to maintain, renew, or end a subsidy would constitute a breach. Whether such terms will indeed be viewed by sceptics as providing the necessary assurances that governments will have the right to continue adopting domestic policies geared toward the public interest remains to be seen. Some advocacy groups have already come out against the changes, warning that they are insufficient to address the past problems seen under investor-state dispute settlement. “The Investment Court System is nothing but private arbitration under another name, keeping VIP rights for foreign investors fully alive and allowing them to sideline the legal system in Europe,” said Natacha Cingotti, trade campaigner for Friends of the Earth Europe, in a statement. Other quarters have, however, expressed interest in the result, noting that it marks an effort to improve. “Congrats EU & Canada negotiators on concluding CETA legal review bringing on board the new investment protection system EP called for,” said European Parliament President Martin Schulz via social media site Twitter. “CETA shows EU’s capacity to safeguard and set standards, open up markets to keep EU competitive in a world of trading giants.” The European Parliament will have to sign off on the final deal, once it is tabled. Coming up With the legal scrub now behind them, the difficult hurdles of ratification still remain. The two sides say that they aim to see the deal signed this year and in force in 2017. The EU is Canada’s second largest trading partner, while the North American country is the EU’s twelfth largest trading partner. According to the European Commission, bilateral goods trade reached €59.1 billion in 2014, with services trade at €27.2 billion. Regarding investment, Canadian investors in 2013 had nearly €117 billion in direct investment stocks, while European investors had over €225 billion in Canada. Meanwhile, the EU is continuing to push for this type of court system in other trade deals it is negotiating. Having already worked it into its recently-concluded pact with Vietnam, Brussels is pushing for such a system to be incorporated into the Transatlantic Trade and Investment Partnership (TTIP) with the United States – a task that is widely expected to be difficult, given the scepticism expressed by top US trade officials over the need for this level of changes. (For more on TTIP, see related story, this edition) ICTSD reporting. (March 3, 2016, Compliments Bridges Weekly)
Talking Tax in Shanghai
In Shanghai, Wolfgang Schäuble is urging his fellow G20 countries to put new rules to tackle tax avoidance into law. Back home, business leaders worry that German companies could be left exposed by the new rules if they are introduced unilaterally or go too far. The finance ministers of the largest industrialized countries and emerging economies, the G20, along with those countries’ central bankers have gathered in the Chinese city of Shanghai. And while the Chinese economy, the global economic doldrums and the role of central banks in stimulating economies were the main issues up for discussion on Friday, taxation, and specifically efforts to shut down tax avoidance by big corporations, is also high on their agenda during the two-day meeting. When it comes to tackling the way multinationals are able to dodge paying tax, Germany’s finance minister, Wolfgang Schäuble, is likely to be admonishing his counterparts with one of his mottos: “It’s the implementation, stupid.” The G20 nations adopted international rules last year which would allow them to jointly take action against the practices of shifting profits and tax dumping by international corporations – the so-called BEPS project, which stands for “base erosion and profit shifting.” The project, which aims at closing various tax loopholes and increasing transparency, was initiated by Mr. Schäuble and his British counterpart, Chancellor of the Exchequer George Osborne. Mr. Schäuble himself has been ambitious when it comes to implementation, and he hopes to present the national BEPS implementation law to the German cabinet as soon as this May. “Country-by-country reporting will be the most important point,” said officials with his ministry. This rule is expected to provide transparency: International corporations must report their sales figures, number of employees and taxes paid in individual countries to the tax authorities in the country where they have their headquarters. In Germany, the Federal Central Tax Office forwards these figures to the authorities in all countries where the corporation is active, provided they also implement the BEPS rules. It is precisely this transparency that is encountering opposition, however. “The international harmonization of corporate tax law that has been introduced must be achieved with a sense of proportion,” said Wolfgang Steiger, general secretary of the Economic Council, a business organization with close ties to Mr. Schäuble’s conservative Christian Democrats. “Under no circumstances may the competitiveness of German companies be compromised,” Mr. Steiger said. The Federal of German Industry, the BDI, has also voiced concerns. It fears that in emerging markets like India and China, the information could be use to demand a larger slice of the corporation’s tax pie. The German treasury will likely get the short end of the stick, BDI tax expert Berthold Welling, argues. The Economic Council has drafted a 35-page position paper, which Handelsblatt has obtained. It contains recommendations on the BEPS implementation, both as pertains to German and European law. The heads of the tax departments of many corporations, from Deutsche Bank to Daimler to Siemens, contributed to the document. It initially states that business leaders expressly welcome the BEPS action plan. However, it continues, a “non-reflective or one-sided application of the results to German tax law is not desirable.” The Economic Council task force wants the G20 measures to be viewed as an “uppermost limit.” “If it were exceeded, the consequence would be double taxation, which is harmful to the economy,” the document reads. Corporate representatives are especially alarmed, because the European Commission is developing plans to issue stronger rules against tax dumping than the BEPS ones and to publish the results of the country-by-country reporting. Germany will not agree to that, said officials in Mr. Schäuble’s ministry, who added: “We are interested in the one-to-one implementation of BEPS.” According to the German finance ministry, international corporate tax rules provide corporations with more legal certainty than a world in which every country decides what it wants. BEPS also commits the emerging economies to these rules, Mr. Schäuble’s officials stressed, noting that this is a benefit in itself. Whether this affects German tax revenues is difficult to assess, they added. Credit: Handelsblatt Compliments: offshorenewsflash
Barbados 7th Least Complex Country for Managing Corporate Compliance
Barbados has been ranked as the 7th least complex country in the world as it relates to regulation and compliance in conducting business on the island. This is according to the TMF Group’s Benchmark Complexity Index 2015. Now in its 3rd year, the index ranks 95 countries across Europe, the Middle East, Africa, Asia-Pacific and the Americas, and is based on the relative ease in doing business from a regulatory and compliance perspective. Barbados’ position improved significantly over the last year when it was ranked as the 22nd least complex country in the world. Its 2015 ranking is also impressive when compared to countries within the Americas, ranking among the top three. The report indicated that the two main factors driving complexity and regulation are the demand for “more comprehensive information on corporate structures and activities of companies” and the increased sharing of information between governments to combat money laundering and other evasive tax practices. The uncertain environment coupled with the increasing complexity continues to impact negatively on doing business across countries. Therefore, the index is a useful indicator when companies, including multinationals, are considering expansion, as it can be used to determine the countries to consider carefully due to their high ranking as being complicated jurisdictions for doing business. The top five most complicated jurisdictions for doing business were Argentina, Indonesia, Colombia, UAE and China, while the top five least complicated jurisdictions were Ireland, BVI, Latvia, Trinidad & Tobago and New Zealand. Half of the ten most complex jurisdictions are reported to be in the Americas. Compliments Invest Barbados
Joint Government Interpretation of Investment Treaties
Public debate about investment treaties often focuses on whether treaties are being well-interpreted in investor-state arbitration cases in accordance with governments’ intent. Governments at the OECD have considered the role governments can play in the interpretation of investment treaties through joint government interpretations and other forms of government “voice”. Shared government interpretations of investment treaties are increasingly recognised as a way to help improve treaty interpretation. The 2001 joint interpretation of the NAFTA agreement by the three NAFTA governments has had a decisive influence on the interpretation of key aspects of that treaty. Along with Canada, Chile, Mexico, the United States and other governments, the European Commission has included in its treaties express provisions allowing for binding joint government interpretations of the treaty. Major recent treaties such as the TPP, the ACIA treaty between ASEAN members, CETA or the Pacific Alliance contain such provisions. Intergovernmental discussions at the OECD have focused in particular on how joint interpretations might be used for the many existing treaties that do not expressly contemplate them. Vague provisions in many older treaties leave broad scope for interpretation. The existing treaty text may thus frequently allow sufficient scope to achieve a jointly-desired interpretation. A growing range of governments now perceive those treaties to be outdated. Joint interpretations can be issued at any time and can be a simpler and faster device than renegotiation to address some aspects of treaty policy. They may also allow governments to address unwanted interpretations that could otherwise lead governments to consider terminating treaties. Discussions and exchanges of views with treaty partners about proposed joint interpretations in advance of treaty renewal dates can also help inform future negotiations and decisions about treaties. At the same time, joint interpretations may be less certain in their effects than formal treaty amendments. It may also be difficult to achieve common views on particular issues and some governments may prefer the flexibility of making submissions as a non-disputing party in particular disputes rather than agreeing to joint interpretations. The evolving views of many governments about treaty policy may, however, provide new opportunities for joint interpretive agreements. Joint interpretations can help treaties to achieve a better balance between stability and flexibility in order to provide a solid policy framework for investment decisions while allowing for adaptation to changing circumstances. They may help governments to better balance foreign investor protection and the right to regulate because it can be difficult to fully build this balance into treaties in advance. Joint interpretive agreements are also likely to be an increasingly important tool for ensuring that treaties are interpreted in accordance with the treaty parties’ intent and achieve their purposes. Such agreements could allow a substantial range of older treaties to be at least harmonised if not made identical in the short term. A new OECD paper considers key questions such as the binding nature of joint interpretations or the scope for joint agreements in light of existing treaty language. It identifies a number of empirical and policy questions of interest. An earlier paper addresses the range of options for government voice with regard to investment treaties. As part of its broad range of work on investment treaties, the OECD offers evidence-based analytical materials and a forum to governments for sustained exchanges on these issues. G20, OECD and other jurisdictions gather bi-annually to discuss investment treaty policy at an OECD-hosted inter-governmental investment roundtable known as the Freedom of Investment (FOI) Roundtable. Non-OECD countries including Brazil, People’s Republic of China, India, Indonesia and South Africa are actively involved. Since 2011, the FOI Roundtable has addressed investor-state dispute settlement (ISDS) and investment treaties at its regular meetings. Summaries of these discussions are available on the OECD website. In October 2015, the OECD launched a broader government-led dialogue about investment treaties. The FOI Roundtable is addressing issues at the centre of public debate over investment treaties such as the quest for balance between investor protection and governments’ right to regulate, which will be the focus of the OECD’s annual conference on investment treaties on 14 March 2016. These conferences provide opportunities for governments to discuss their policies and work, and to exchange views with stakeholders and experts. Article Compliments David Gaukrodger, Senior Legal Advisor, OECD Investment Division
Barbados Signs Double Taxation Agreement with Slovak Republic
Barbados has expanded its treaty network by adding the Slovak Republic to the number of jurisdictions with which Barbados currently has Double Taxation Agreements (DTAs). On October 28th 2015, Barbados’ Minister of International Business, Donville Inniss and Elena Pekarova of Slovakia’s Ministry of Finance were signatories to the agreement at the Barbados Hilton Resort. Speaking at the signing Mr. Inniss said “Whilst other jurisdictions may focus quite a bit on a tax rate and related issues, Barbados has historically focused on building out our international business and financial services (IBFS) sector that is based on investment treaties and DTAs”. Mr. Inniss stated that once the DTA enters into force, there will be 37 DTAs in Barbados’ network of treaties which he added represented a significant number for a small domicile like Barbados. Minister Inniss said that he expected the signing would see both Barbados and the Slovak Republic, commencing investments across the globe through their respective private sectors. He said that Barbados should now be able to attract companies from the Slovak Republic into Barbados to invest or to invest via Barbados into the other 36 jurisdictions with which Barbados has Double Taxation Agreements. The Minister said “we firmly believe that Barbados can continue to be an excellent conduit through which International Business and Financial Services will flow and grow. And, it is treaties and agreements like these that certainly send the right signal to the international arena that we are a jurisdiction of substance and serious business”.
Barbados Signs Multilateral Convention and Multilateral Competent Authority Agreement
On the 28th of October 2015, Barbados became a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention). This Convention is the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance developed by the Organisation for Economic Cooperation and Development (OECD) and the Council of Europe. The Minister of International Business, Donville Inniss signed the Convention on behalf of the Barbados Government, at the Hilton Barbados Resort making Barbados one of 74 signatories to the agreement. On the 29th of October, Barbados also signed the Multilateral Competent Authority Agreement(MCAA). The MCAA implements the OECD’s Standard for Automatic Exchange of Financial Information and is based on Article 6 of the Multilateral Convention. These signings coincided with Barbados’ hosting of the 8th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes, which took place October 28th to 30th 2015. The meeting saw some 200 delegates converge on the island. The signing of the Multilateral Competent Authority Agreement implements the new international standards on automatic exchange of information. Speaking to the media after the signing, Minister of International Business, Donville Inniss explained what the signing of the agreement meant for Barbados. “What we just witnessed here is the signing of the Competent Authorities, which will be the agencies in each country that will be responsible for collecting information on tax and sharing it across the world. So, for example, I would have signed on behalf of Barbados the Convention that will allow Barbados to in principle agree to sharing information on tax affairs across borders within the Global Forum arrangement.” Mr. Inniss went on to explain that the Competent Authority in Barbados is the Barbados Revenue Authority (BRA), and the Commissioner of Revenue Margaret Sivers, signed the agreement on the country’s behalf. Mr. Inniss pointed out that the multilateral arrangement made things easier as there was no longer a need to negotiate bilateral agreements for each country, as information could now be shared through the multilateral mechanism. Deputy Director of Legal Affairs at the Organisation for Economic Cooperation and Development (OECD) Madame Josee Secteau, said the event represented “the remarkable recent progress made in international tax transparency”. The Deputy Director said “The signatories can be proud to be part of this change”.
Barbados Attends 2014 Rims Canada Conference
Barbados will be highlighted as a premier domicile for international insurance at the 2014 RIMS Canada Conference, which will be held from September 14-17 in Winnipeg, Manitoba. This year, the Barbados delegation will comprise a total of 12 delegates from both the private and public sector, including three representatives from Invest Barbados. A number of service providers from captive insurance management companies and international banking will be represented, along with Barbados’ international business umbrella body, the Barbados International Business Association (BIBA). Leading the delegation will be; Mr. Randy Graham, Chief Executive Officer of the Financial Services Commission. Mr. Ricardo O. Knight, President and Chief Executive Officer of JLT Barbados will participate in the panel dicussion titled, Captives as an Integral Part of the Risk Manager’s Toolkit. This session will discuss the changing landscape for captive insurers, how they manage volatility and address new risk areas such as cyber risk. The session will also address alternative captive formats, captive successes, current trends in Canada and captive risk related flexibility. The other 10 delegates are: Amphora Captive Insurance Managers: Mr. M. Scott Stollmeyer (Vice President) AON Insurance Managers (B’dos) Limited: Mr. Vinston Hampden (Managing Director) BIBA: Mr. Henderson Holmes (Executive Director) Brookfield International Bank Inc.: Mr. Gregory Mc Connie (President & CEO), Mrs. Terry Gittens (Chief Financial Officer), DGM Captive Management Inc.: Mr. Marlon Waldron (Vice President, Management Services) Invest Barbados: Ms. Emeline Taitt (Chief Executive Officer), Mrs. Ann Mellows (Senior Business Development Officer), Mr. Neil Weekes (Business Development Officer) JLT Barbados: Mr. Kirk Cyrus (Vice President) During the RIMS Canada Conference, the Barbados showcase will be located at booth #29. The members of the Barbados delegation will share with prospective investors why Barbados is an attractive domicile for captive insurance business. Barbados has been attracting international insurance companies to its shores for decades and is ranked among the top ten captive domiciles. Click here to view the advantages of locating an international insurance company in Barbados. As of January 31, 2014, there were 179 active Exempt Insurance Companies and 45 active Qualifying Insurance Companies in Barbados. Of the total number of active companies, approximately 54% originated from Canada.
BARBADOS COMPLETES FATCA REVIEW
Barbados says it has completed a review of the Foreign Account Tax Compliance Act (FATCA) Inter-Governmental Agreement with the United States. The Special FATCA Negotiating Team, chaired by the Secretary of the Central Bank of Barbados, Elson Gaskin, has submitted a detailed report to the Minister responsible for International Business, Donville Inniss. “In the interim, however, the Team has signaled to the USA that Barbados is ready to proceed to initial the Agreement once the approval of Cabinet is obtained,” according to an official statement issued here. The statement said during the negotiation process, the team made several enquiries of the USA along with suggested amendments but the USA, while acknowledging these suggestions, declined to make them, citing the need to have uniformity in their documentation. “In addition, detailed issues raised by the Special Negotiating Team received comprehensive responses from the USA which may be utilised to assist Barbados’ financial institutions should these matters arise in the coming months as they seek to ensure FATCA compliance. “ Last week, Washington indicated that it would confirm its readiness to Barbados this week and “thereafter the agreement will be finalised and initialed by both parties”. “The Treasury Department of the USA has indicated that once Barbados initials the documents and Barbados consents, Barbados’ name will be placed on the published list of countries with which a FATCA IGA is deemed to be in place. The formal execution will take place at a subsequent date,” the statement said. In February, Inniss indicated that Barbados would be ready to execute the inter-governmental agreement y April 30. “This deadline was largely complied with. While some intervening time has been expended on the formalities of the execution process, it is expected that the same will be completed well in time for the June 30 deadline,” the statement added. The FATCA requires nationals of the United states, including who live outside the United States to report their financial accounts held outside of the country and requires foreign financial institutions to report to the Internal revenue Service (IRS) about their American clients. Congress enacted FATCA to make it more difficult for U.S. taxpayers to conceal assets held in offshore accounts and shell corporations.
This country’s foreign exchange reserves have been stabilised. Word of this has come from Minister of Finance and Economic Affairs, Christopher Sinckler, in the House of Assembly yesterday morning as he led off the debate on a resolution to increase the amount to be raised by the issue of treasury bills and tax refund certificates and tax reserve certificates to $4 billion. The Government’s chief spokesman on finance and economic matters told the House of Assembly that while they have had some assistance by way of foreign borrowing last year and in the early part of this year to help bring the reserves back up; outside of those loans, Government has seen “a levelling off and a plateauing” of the significant decline in the country’s reserves. The Finance and Economic Affairs Minister is adamant that those significant and steep declines have now been halted; disclosing also that in some weeks, they have actually seen small growth. “We are cautiously optimistic, Mr. Speaker, that that condition will continue throughout the course of this year, even though we are not predicting great economic growth for this year. And why we are confident about that? Because we are now seeing that we have returned to a situation, due to the measures that we are implementing, that constrict the demand for foreign exchange by reducing the level of imports, Mr. Speaker Sir, for goods and services,” he said. With that in mind, he said the ultimate goal is to grow the foreign exchange so that they have more of a surplus, which can then be fed into the reserves, so that the reserves can start to rebuild and get back to normal levels. Mr. Sinckler indicated that the Medium Term Growth and Development Strategy has a trajectory of getting the reserves back up to 19 weeks of imports by the end of 2016, and beyond that, to move it up to $2.6 billion overall two years after. “Our principal goal in the context of what we are dealing with now, as it has been over the last couple of years, is to ensure the stability of the Barbados economy by ensuring that we maintain adequate levels of reserves [and] that we have adequate levels, or enough levels of fx [foreign exchange] earnings to be able to carry out our transactions and do what we have to do from the earnings, so our reserves can remain at a certain level that would give us the import cover that we require,” the minister stated. To that end, he said that over the last four years Government has done a reasonably good job in that regard. Meanwhile, speaking specifically to the resolution, the minister said that as long as Government continues to run a fiscal deficit that is too high, they will have to increase the limit in relation to the debt that can be incurred, so that they can finance the operations of Government.
Entrepreneurship to Drive the Barbadian Economy
Small and medium size businesses employ over 90% of the workforce internationally and the same holds true for Barbados. Indeed, most Governments and Industry leaders believe that start up companies will play a significant role in turning the current global economic crisis around. To this end, the Barbados Entrepreneurship Foundation (BEF), in pursuit of its goal to make Barbados the #1 Hub for Entrepreneurship in the world by 2020, spent 2013 continuing its work of advocating and facilitating an entrepreneurship culture and ecosystem in Barbados. In early 2014 BEF engaged an international expert to assist in establishing a Barbados based Angel Investor Network. The preliminary work has been completed and based on the recommendations received and subsequent engagement with stakeholders, BEF is moving forward immediately with the creation of ‘Trident Angels‘ the first ever Caribbean Angel Investor Network. Early meetings with potential angels and enthusiastic entrepreneurs were heartening, informative and will guide the next steps. Angel Investing is high risk but a critical source of finance for Start-up enterprises. It is very exciting to see many local start-ups getting qualified and identified as ready for angel investing and to have a large group of local Angel Investors willing to participate in this opportunity to grow high potential Barbadian enterprises. The plans to forge ahead are timely given the urgent need for economic growth and employment generation and the recognition by Governments and Business Leaders worldwide that Entrepreneurship is a major driver of economic and social transformation. Entrepreneurship is now at the top of the National Economic Transformation Agenda. Business Facilitation has been identified as key to investment generation and job creation and to enabling high growth potential entrepreneurs. Several members of the BEF’s board are new, having been elected over the last few months. Board Chairman Peter Boos, is pleased with the team, “these new members of the Board are all passionate leaders in their own right and bring new ideas and energy to the Board. We are all committed to working together to help Barbados realize its full potential as a world class entrepreneurship hub for both domestic and international investors. Helping identify and grow indigenous business with global marketplace potential is our focus. Engaging and partnering with international investors will be important to help facilitate that dream of creating a very competitive and innovative economy” Mr.Boos confirmed that BEF is working on several other innovative initiatives to transform the Barbados entrepreneurship ecosystem.
Barbados and Canada Sign Protocol Amending Double Taxation Agreement
Barbados says the protocol amending the agreement with Canada for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital has gone into effect. It said the protocol took effect from December 17 (2013) last year. “Under the provisions of this protocol, for the purposes of the agreement, the tax residency of a company that is resident in both Barbados and Canada under both countries’ domestic laws, commonly referred to as a dually resident company, will be determined based on the place of incorporation,” said the Director of International Business, Kaeron Venner: He said as a result, a Barbados incorporated vehicle that is deemed to be dually resident would be regarded as resident solely in Barbados for the purposes of the agreement and would be liable to tax in Barbados. “Where Canada wishes to make a claim to tax that same entity, the rule is that such a vehicle may only be taxed in Canada on certain types of income derived from Canadian sources, such as income derived from activities that it carries in Canada through a permanent establishment (PE). “This new tie breaker rule removes the need to have recourse to the Mutual Agreement Procedure to determine the residence of a dually resident company.” Canada and Barbados signed the Double Taxation Agreement (DTA) on January 22, 1980 which excluded companies that were subject to a special tax benefit under the international financial services regime from all of the provisions of the Treaty. Venner said that on November 8, 2011, Canada and Barbados signed a protocol to amend the 1980 DTA. “This Protocol, among other things, now allows entities operating in the international financial services sector to benefit from a number of provisions in the Treaty, including the provisions on residency. In addition, such entities will now be covered under the new comprehensive exchange of information provisions which now meet the OECD (Organisation for economic Cooperation and Development) standard.” A government statement said that Barbados values the “mutually beneficial and long standing relationship with Canada and welcomes this development as it will further concretise Barbados’ principles of transparency and substance. “Through our network of tax treaties, it will further solidify Barbados’ commitment to international best practices on the exchange of information,” the statement added.