Table Of ContentGlobal Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 2: THE BAHAMAS
This report contains a “Phase 2: Implementation of the Standard in Practice” review, as well
as revised version of the “Phase 1: Legal and Regulatory Framework” review already released
for this jurisdiction. Peer Review Report
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of Phase 2
information is carried out by 120 jurisdictions, which participate in the Global Forum on an
equal footing. Implementation of the Standard
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the international standards of transparency and exchange of information for tax purposes. in Practice
These standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange
of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model
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Tax Convention on Income and on Capital and its commentary as updated in 2004. The ee THE BAHAMAS
standards have also been incorporated into the UN Model Tax Convention. r R
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The standards provide for international exchange on request of foreseeably relevant ie
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information for the administration or enforcement of the domestic tax laws of a requesting R
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party. Fishing expeditions are not authorised but all foreseeably relevant information must be p
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provided, including bank information and information held by fi duciaries, regardless of the rt P
existence of a domestic tax interest or the application of a dual criminality standard. h
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as 2
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 Im
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reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange le
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of information, while Phase 2 reviews look at the practical implementation of that framework.
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The Global Forum has also put in place a process for supplementary reports to follow-up tio
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on recommendations, as well as for the ongoing monitoring of jurisdictions following the o
conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the f th
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All review reports are published once approved by the Global Forum and they thus represent nd
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For more information on the work of the Global Forum on Transparency and Exchange of in P
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ISBN 978-92-64-20278-8 -:HSTCQE=WUW\]]:
23 2013 37 1 P
Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
The Bahamas 2013
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
November 2013
(reflecting the legal and regulatory framework
as at March 2013)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
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thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
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Pleasecitethispublicationas:
OECD(2013),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:TheBahamas2013:Phase2:ImplementationoftheStandardinPractice,OECD
Publishing.
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ISBN978-92-64-20279-5(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum 5
Executive Summary 7
Introduction 11
Information and methodology used for the peer review of The Bahamas 11
Overview of The Bahamas 13
Recent developments 15
Compliance with the Standards 17
A. Availability of Information 17
Overview 17
A1 Ownership and identity information 19
A2 Accounting records 61
A3 Banking information 72
B. Access to Information 77
Overview 77
B1 Competent Authority’s ability to obtain and provide information 78
B2 Notification requirements and rights and safeguards 86
C. Exchanging Information 89
Overview 89
C1 Exchange-of-information mechanisms 91
C2 Exchange-of-information mechanisms with all relevant partners 99
C3 Confidentiality 101
C4 Rights and safeguards of taxpayers and third parties 106
C5 Timeliness of responses to requests for information 107
PEER REVIEW REPORT – PHASE 2 – THE BAHAMAS © OECD 2013
4 – TABLE OF CONTENTS
Summary of Determinations and Factors Underlying Recommendations 117
Annex 1: Jurisdiction’s Response to the Review Report 121
Annex 2: List of All Exchange of Information Mechanisms in Effect 122
Annex 3: List of All Laws, Regulations and Other Material Received 124
Annex 4: Persons Interviewed During the Onsite Visit 127
PEER REVIEW REPORT – PHASE 2 – THE BAHAMAS © OECD 2013
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for Tax
Purposes is the multilateral framework within which work in the area of tax
transparency and exchange of information is carried out by over 120 jurisdic-
tions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer review of
the implementation of the international standards of transparency and exchange
of information for tax purposes These standards are primarily reflected in the
2002 OECD Model Agreement on Exchange of Information on Tax Matters
and its commentary, and in Article 26 of the OECD Model Tax Convention on
Income and on Capital and its commentary as updated in 2004 The standards
have also been incorporated into the UN Model Tax Convention
The standards provide for international exchange on request of foreseeably
relevant information for the administration or enforcement of the domestic tax
laws of a requesting party Fishing expeditions are not authorised but all fore-
seeably relevant information must be provided, including bank information
and information held by fiduciaries, regardless of the existence of a domestic
tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by the
Global Forum as relevant to its work, are being reviewed This process is under-
taken in two phases Phase 1 reviews assess the quality of a jurisdiction’s legal
and regulatory framework for the exchange of information, while Phase 2 reviews
look at the practical implementation of that framework Some Global Forum
members are undergoing combined – Phase 1 and Phase 2 – reviews The Global
Forum has also put in place a process for supplementary reports to follow-up on
recommendations, as well as for the ongoing monitoring of jurisdictions following
the conclusion of a review The ultimate goal is to help jurisdictions to effectively
implement the international standards of transparency and exchange of informa-
tion for tax purposes
All review reports are published once approved by the Global Forum and
they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency and
Exchange of Information for Tax Purposes, and for copies of the published review
reports, please refer to wwwoecdorg/tax/transparency and wwweoi-taxorg
PEER REVIEW REPORT – PHASE 2 – THE BAHAMAS © OECD 2013
EXECUTIVE SUMMARY – 7
Executive Summary
1 This report summarises the legal and regulatory framework for
transparency and exchange of information in The Bahamas as well as the
practical implementation of that framework The assessment of effectiveness
in practice has been performed in relation to a three year period (1 July 2009
through 30 June 2012)
2 The international standard which is set out in the Global Forum’s
Terms of Reference to Monitor and Review Progress Towards Transparency
and Exchange of Information, is concerned with the availability of relevant
information within a jurisdiction, the competent authority’s ability to gain
timely access to that information, and in turn, whether that information can
be effectively exchanged with its exchange of information (EOI) partners
3 The Bahamas has worked with the OECD in respect of tax infor-
mation exchange since 2002 when it committed to implementing the
international standards of transparency and information exchange The
Bahamas does not have direct taxation and consequently the usual framework
for tax authorities to have access to information for income tax purposes is
not in place In 2009, The Bahamas renewed its commitment which it then
worked quickly to implement and by March 2010 it had concluded more than
12 tax information exchange agreements (TIEAs) As at March 2013, The
Bahamas has an exchange of information (EOI) network covering 29 juris-
dictions; 26 of these agreements are presently in force, and The Bahamas has
taken all steps for its part which are necessary to bring the remaining agree-
ments into force Recently concluded, these agreements, with the exception of
its TIEA with the US, are based on the OECD’s 2002 Model TIEA
4 In respect of the availability of ownership and identity information,
as well as banking information for account holders, there are obligations in
place to ensure the availability of this information These obligations are
accompanied by appropriate penalties for non-compliance The obligations
imposed directly on entities and arrangements are complemented by regu-
latory laws, including AML obligations, imposed on a person conducting
certain businesses such as banking, trust services, insurance, investment and
company management Ownership and identity information has generally
PEER REVIEW REPORT – PHASE 2 – THE BAHAMAS © OECD 2013
8 – EXECUTIVE SUMMARY
been available where this was requested However, the lack of monitoring and
enforcement of penalties by the Registrar and the scope of the supervision by
the regulators may not ensure that complete ownership information is being
maintained in respect of all legal entities
5 In respect of the availability of accounting information, all entities
are subject to comprehensive obligations to retain accounting records and
underlying documentation for a minimum 5 year period Effective sanctions
will also apply to any entity that fails to keep accounting records as required
As these obligations only came into force in 2011, 2012 and 2013, they are
largely untested in practice and the implementation of these amendments
and compliance with these obligations should be strictly monitored by The
Bahamas
6 In respect of access to information, the competent authority of The
Bahamas is invested with broad powers to gather relevant information These
consist of a power to issue a notice to require the production of relevant
information and are complemented by powers to search premises and seize
information under court supervision as well as obtaining relevant information
by way of witness deposition Enforcement of these provisions is secured by
the existence of significant penalties for non-compliance Secrecy provisions
in The Bahamas are overridden where information is required for EOI pur-
poses, and a domestic tax interest does not exist in The Bahamas
7 The Bahamas has been exchanging information in accordance
with the international standards since 2007 During the review period, The
Bahamas received 48 requests from 8 different jurisdictions, with a clear
increase in the numbers of requests and EOI partners year on year Including
the time taken by the requesting jurisdiction to respond to clarifications from
The Bahamas which occurred in 27% of cases, the requested information was
provided within 90 days in 25% of the requests, between 91 and 180 days in
50% of the requests, between 181 days and one year in 10% of the requests
with two requests still outstanding from the review period The Bahamas
is considered by its partners as a reliable EOI partner and maintains clear
lines of communication with its EOI partners throughout the processing of
a request
8 The Bahamas has been assigned a rating 1 for each of the 10 essential
elements as well as an overall rating The ratings for the essential elements
are based on the analysis in the text of the report, taking into account the
Phase 1 determinations and any recommendations made in respect of The
Bahamas’ legal and regulatory framework and the effectiveness of its
1 This report reflects the legal and regulatory framework as at the date indicated
on page 1 of this publication Any material changes to the circumstances affect-
ing the ratings may be included in Annex 1 to this report
PEER REVIEW REPORT – PHASE 2 – THE BAHAMAS © OECD 2013
