The Ministry of Finance is pleased to announce The Bahamas' removal from Annex 1 of the European Union's ("EU") list of non-cooperative jurisdictions for tax purposes.
The Bahamas' official removal from the list follows the publishing of the adopted conclusions of the Economic and Financial Affairs Council of the European Union today.
The removal of The Bahamas from the EU's list clearly underscores the significant progress made over the past year by The Bahamas in addressing the concerns identified by the OECD's Forum on Harmful Tax Practices ("FHTP") and the EU last year.
The Bahamas undertook the following steps to ensure removal from the EU's list:
- substantial investment in a new and dedicated Economic Substance reporting portal was launched on 8th September, 2023 to ensure the proper collection and exchange of information on the activities of companies and partnerships in The Bahamas;
- strengthening of the regulatory regime by the implementation of the Commercial Entities (Substance Requirements) Act, 2023 and subsequent amendments together with the Commercial Entities (Substance Requirements) Regulations, 2023 and Guidance Notes;
- increased focused compliance and monitoring activities to ensure strict adherence to the regulatory regime and international standards;
- extensive training of the financial services industry with respect to regulatory framework, compliance and use of the Economic Substance reporting portal; and
- exchanges of all relevant information for the years 2020 to 2022 to interested jurisdictions who have agreed to receive Economic Substance data from The
It is noteworthy to mention that for the 2022 exchange period The Bahamas conducted a total of 133 exchanges with relevant exchange partners. This is a considerable increase, as compared with the year 2020 where a total of 9 exchanges was conducted and the year 2021 where a total of 10 exchanges was with relevant partners.
The Bahamas will continue to remain aggressive in its approach to exchanges of information and take proactive measures with the FHTP to:
- secure a Fully Equipped Monitoring Mechanism designation ("FEMM"); and
- remain off the EU's list with respect to OECD initiatives and exchange of
The Bahamas is a leading premier international financial center committed to following best practices and adhering to international standards. In September of last year, The Bahamas addressed its concerns to the United Nations regarding the view and inequitable treatment of The Bahamas by the OECD and EU. The Bahamas will not remain silent on issues of grave importance that affects the reputation of the country and livelihood of its people.
The achievement of today's result is reflective of the hard work and efforts of the Ministry of Finance's Legal and Regulatory Affairs Unit together with the support and collaboration of the Office of the Attorney General, Financial Services Industry and Department of Inland Revenue.
The Bahamas will continue to remain a responsible international exchange partner demonstrating and maintaining cooperation and standards in the area of transparency and exchange of information for tax purposes in order to safeguard the Forum on Harmful Tax Practices' ("FHTP") rating of "Not Harmful".
