The House of Representatives of Belize has recently passed three bills to organize offshore regulations in order to be compliant with European Standards. The bills scheduled at the session included amendments to the International Business Companies Amendment Act, the Income and Business tax Amendment Act, and the Stamp Duties Amendment Act.

During the last few years Belize had tense relations dealing with European institutions and other offshore counterparts. These issues resulted in a risk for the country to get blacklisted by the European Union (EU) and the Organization of Economic Co-operation and Development (OECD) with regards to transparent and accountable tax standards. A deadline has been set for the end of December 2018 to make the necessary law amendments.

Prime Minister Dean Barrow in his address at the House Sitting stated:

“The reason for the rush is that this is a consequence of the pressures that have been brought to bear on our jurisdiction by the industrialized countries, and in this case, by the EU, and by OECD. In its analysis of information on areas of tax transparency, fair taxation and implementation of anti-base erosion and profit sharing measures, the so-called ‘Code of Conduct group’, which is really an agency of the aforementioned OECD/EU axis, that group found that Belize’s Export Processing Zone and our International Business Companies Regimes are both considered to be carrying out harmful tax practices,”

Some highlights of the amendments that are being discussed the most. In accordance with the latest changes to the Acts

• the International Business Companies regime will be extended to Belize residents, and will also allow for ownership of International Business Companies (IBC) by Belizeans;
• as of January the restrictions that an International Business Company cannot carry on business with Belize residence shall be removed;
• the Belize IBC will have the right to purchase and own land within the country;
• Belizean companies will be subject to Income tax if income will be sourced from Belize;
• local companies will face new filling requirements;
• physical presence will be a mandatory requirement for licensees, hence any formation having any license will be obliged to maintain an office and other required items within the country;
• optional audit may be required by the Commissioner of Income Tax if annual receipts of the subject company are higher than US$6 million.

A transition period of at least 12 months shall be endorsed, prior to the full enforcement of some of the mentioned requirements, such as tax compliance, audit and physical presence conditions.

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