Bahamas set to sign OECD taxpayer data sharing convention
The Bahamas is planning to sign the OECD treaty agreement to share information on taxpayer details to curb tax evasion, which would give tax authorities more tax transparency over the offshore financial centre
2 Jun 2017
Minister of finance, Kevin P Turnquest MP has confirmed that the islands are now likely to sign up to the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters, after strong lobbying from the OECD to participate in the global information exchange programme.
There are already 111 countries signed up to the convention, which was extended in 2010 to respond to the growing problem of cross-border tax evasion and use of letter box companies. Attempts to sign up more countries were accelerated after the series of leaks of tax abuse and offshore evasion detailed in the documents revealed in the LuxLeaks and the Panama Papers, which detailed extensive use of abusive and evasive tax behaviour.
The Convention provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. This co-operation ranges from exchange of information, including automatic exchanges, to the recovery of foreign tax claims.
The Bahamas is the latest UK Overseas Territory to agree to sign up to the convention, which is designed to improve transparency and close down tax loopholes which allow countries to be used for aggressive offshore tax planning. The country's economy is heavily reliant upon tourism, tourism-driven construction and the offshore financial sector.
‘Signing and ratifying the Convention will be a very significant step forward in implementing its [Bahamas] commitment to tax transparency and effective exchange of information, in particular under the OECD/G20 Common Reporting Standard,’ said Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration.
After the Panama Papers scandal, Panama also started the process to sign up to the protocol last October with local rules set to come into effect from 1 July 2017.
The OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters is available here
A list of current signatories to the OECD Convention is available here