Bahamas and OECD in tax agreement

The Bahamas was among the states to appear on the OECD’s blacklist in June 2000 that named 35 jurisdictions as ‘tax havens’.

The Bahamas government said agreement had been reached based on ‘the application of a level playing field in relation to all jurisdictions with which The Bahamas is materially in competition in the provision of cross-border financial services’.

The Bahamas finance minister Sir William Allen stressed settlement had been made on the assumptions that other countries would also settle. He said: ‘The government of The Bahamas believes strongly that the success of this OECD initiative rests on the adherence to the principle of parity in the obligations assumed by all jurisdictions, OECD and non-OECD member countries, in relation to standards and timelines in the move to greater transparency and information exchange.

‘Clearly, if this principle is not observed, financial services business will migrate from one financial services centre to another and the stated objectives of the OECD initiative will, thereby be defeated.’

The agreement will further boost the OECD campaign. It comes after news earlier this month that the Caribbean islands of Grenada & St. Vincent and the Grenadines have committed to ending harmful tax practices. The Channel Islands of Guernsey and Jersey also committed themselves to improving the transparency of their tax and regulatory systems and to establishing effective exchange of information with OECD countries by 31 December 2005.

However the island of Vanuatu in the South Pacific has refused to cooperate.

An OECD statement said: ‘The OECD is pleased to announce that The Bahamas has made a commitment to improve the transparency of its tax and regulatory systems and establish effective exchange of information for tax matters with OECDcountries by 31 December 2005.’