The Netherlands is demanding that The Bahamas implement a corporate income tax at nine per cent or higher, as the price to escape tax non-cooperation “blacklist”.
This, according to The Bahamas Deputy Prime Minister, Peter Turnquest, who told Tribune Business newspaper that The Bahamas “will not be dictated to by any foreign state” as to its taxation policy and structure. He was responding to the demand from the Netherlands’ Ministry of Finance.
His comments came after a Dutch finance official, responding to the Tribune Business inquiries, said its tax blacklist criteria is “made up differently” from that of the 27-nation European Union (EU), of which it is a member. The Bahamas was this week removed from the bloc’s monitoring ‘grey list’ after being deemed to have fully implemented all the reforms required to address its demands.
“The Bahamas will consider that and, if we wish to adjust our system, to reflect that. But to this point we are willing, and we have demonstrated that we co-operate with all international partners on tax matters.”– The Bahamas Deputy Prime Minister, Peter Turnquest
However, The Bahamas remains on blacklists of both France and the Netherlands, and is unlikely to be removed from the latter’s any time soon. The Dutch official said: “A country/jurisdiction gets a place on the Dutch list when there either is no corporation tax or a corporation tax rate that is lower than nine per cent.
“This is the case in The Bahamas, and therefore The Bahamas is – and stays on – the Dutch list. We make up this list every year and the end of a year. A country/jurisdiction can only get from the list if the corporation tax rate is a nine per cent or above,” the Dutch official explained.
The Dutch position adds to the building pressure on The Bahamas and other low or zero-rates tax international financial centres to consider introducing a low-rate corporate income tax. The Organisation for Economic Co-Operation and Development (OECD) is pushing for a “minimum level of” taxation to combat tax evasion by multinationals.
Turnquest, acknowledging such pressures yesterday, told Tribune Business: “We are a sovereign territory and, as a result, we have the right to determine our tax structure, and we will consider international standards.”
To the extent that the international community rises to a minimum tax rate, he said, “The Bahamas will consider that and, if we wish to adjust our system, to reflect that. But to this point we are willing, and we have demonstrated that we co-operate with all international partners on tax matters. We will not be dictated to by any foreign state.”
The Bahamas Deputy Prime Minister said the country’s Attorney General, the government’s chief legal advisor, is requesting a bilateral with the Netherlands today to discuss areas of mutual understanding and consensus. He noted that The Bahamas has demonstrated its commitment and co-operation with the EU and the OECD, committing to continue working towards meeting all of the FATF (Financial Action Task Force) criteria.