On October 29-30th, Barbados hosted the 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes. Present at the meeting were 250 delegates from 88 jurisdictions and 11 international organisations and regional groups. Barbados is the second Caribbean country (after Bermuda) to have hosted a meeting of the Global Forum and is a Vice Chair of the Global Forum’s Steering Group.
The Global Forum is the leading multilateral forum on international cooperation on transparency and the exchange of tax and financial information. Comprising both OECD and non-OECD countries, the Global Forum undertakes peer reviews as well as provides technical assistance to members. A noted initiative is the recently launched Automatic Exchange of Information (AEOI) Portal.
The international business sector is an important sector and development strategy for Caribbean offshore financial jurisdictions (OFCs). In an impassioned opening address, Prime Minister of Barbados, the Hon Freundel Stuart, stressed the significance of this plenary to Caribbean offshore financial centres in helping to shape the future of the world’s tax agenda. He highlighted Barbados’ competitive advantage in international business and the country’s continuous efforts at seeking to comply with internationally agreed standards on tax transparency and the exchange of tax information. Among several actions undertaken in an effort to move from ‘partially compliant’ to ‘largely compliant’ status, this week Barbados signed the Multilateral Convention on Mutual Administrative Assistance on Tax Matters and the Multilateral Competent Authority Agreement. According to the Statement of Outcomes, there are now 89 jurisdictions covered by the MAC and 74 by the MCAA.
Prime Minister Stuart reiterated Barbados’ commitment to the work of the Global Forum. He spoke critically about Caribbean OFCs’ inclusion on arbitrary blacklists by some OECD member countries, including the recent EU and District of Columbia lists, which were published without regard to Caribbean countries’ compliance on tax matters and the reputational and development implications of such blacklists. In this vein, he reiterated the need for a clear position by the Global Forum on blacklists. Happily, one of the stated outcomes of the Global Forum was the acknowledgement that the Global Forum is currently the key global body competent to assess jurisdictions on their cooperation on matters of transparency and exchange of information for tax purposes, and that the findings in the Global Forum peer reviews should be taken into account as appropriate in any lists pertaining to non-cooperative jurisdictions in this area.
Prime Minister Stuart also condemned financial institutions’ use of the Global Forum’s ratings of countries without communicating with the Global Forum to ascertain those countries’ actual progress on the implementation of measures. He noted that this practice has penalised some countries which are ranked as “partially compliant” or lower. Noting that this could compromise countries’ development goals, he emphasised the need for such financial institutions to communicate with the Global Forum on those countries’ progress on implementation so they are not unfairly penalised. Additionally, he also mentioned the need for consideration of the possible role of the Global Forum on tax matters of importance to small vulnerable states.
In regards to the Exchange of Tax Information, the Global Forum published its 2015 Annual Report “Tax Transparency 2015: Report on Progress”, which includes details on the progress of the peer reviews and ratings.
Among the key outcomes of the 8th Global Forum meeting were:
- Reiteration of the resolve to meet the commitments to implement automatic exchange of information within the agreed timelines of first exchanges in 2017 or 2018.
- Recognition of changes made by several Global Forum members to their legal framework or practices on exchange of information on request to address Global Forum recommendations which led to the adoption of several supplementary peer reviews.
- Acknowledgement that the Global Forum is currently the key global body competent to assess jurisdictions as regards their cooperation on matters of transparency and exchange of information for tax purposes, and that the findings in the Global Forum peer reviews should be taken into account as appropriate in any lists pertaining to non-cooperative jurisdictions in this area.
- Agreement on the detailed framework for a second Round of peer reviews of the standard of exchange of information on request to be launched in the second half of 2016.
- Intensification of efforts to ensure developing countries benefit from the recent gains made in international tax transparency.
The full Statement of Outcomes may be accessed here, while the press release on the conclusion of the meeting is available here.
Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade.