Will Bahamas be removed from the EU tax blacklist?

On 13th of March the European Council released a decision where Bahamas are listed among other jurisdictions with non-cooperative taxation rules. The mentioned above list is a non-obligatory document, but, at the same time, an important guide which makes a huge impact for choosing contractors while doing business.

This year, the US Virgin Islands, Saint Kitts and Nevis were also listed as territories with non-cooperative tax jurisdictions. European Union is concerned about tax policies of offshore territories and welcomes only the ones who support their political position.

At the same time, Bahamas representatives instantly reacted to such inclusion. According to official statement of territory’s Prime Minister Mr. Turnquest, Bahamas are already working with the EU’s Code of Conduct Group. The mentioned EU agency is in charge of recommending jurisdictions to include in the blacklist. Despite the fact that Bahamas are working on implementation in accordance with new rules, this jurisdiction ended up in the list too.

The deadline for implementing all changes is set to December of 2018. Taking into consideration abovementioned, Bahamas will become highly competitive tax jurisdiction de jure only in case they manage to adapt local legislation to new requirements by the stipulated date. This jurisdiction will comply with minimum requirements of the OECD's Base Erosion and Profit Shifting (BEPS) initiative by the end of the year. This means that inclusion of Bahamas to the non-cooperative tax jurisdictions list is premature and as soon as the Prime Minister negotiates removal of the territory from the list, the good name will be restored.

Taking into account the above, before starting business in offshore jurisdiction, it is important to check if its provisions correspond with the BEPS minimum standards. This compliance means absence of harmful tax provisions, tax treaties, work on cross-border dispute resolution and prevention of tax abuse. In this case, Offshorelicense Ltd is aware of all tax regimes in offshore territories and is ready to assist with choosing the right one for you.