Barbados Government Reviewing US Tax Treaty Proposals

by Amanda Banks, Tax-News.com, London

25 September 2002

The Barbados government is reviewing proposals put forward during high-levels talks with the US government last week, according to a Barbados Daily Nation report.

The talks, which began last Monday, were designed to re-examine some of the provisions contained within the Barbados-United States double taxation agreement in the light of the recent furore over 'corporate inversions' performed by American companies to lower tax jurisdictions. However, even as the talks began, it was clear that the Barbadian authorities had some grave concerns about the way in which the jurisdiction has been presented in the US media:

'This does not make sense when the same Bush administration was the one which determined that Barbados was not a tax haven when the Organisation for Economic Cooperation and Development blacklisted us,' an un-named source close to the Barbadian government told the local newspaper. 'That's why we have been very proactive on this issue.'

Following the meeting, however, both sides have played their cards pretty close to their chests.

'The Barbados Government told the United States Treasury that it would review the proposals and provide the Bush administration with a response as quickly as possible. The discussions are extremely sensitive but it's fair to say that the Treasury wants Barbados' help in revising the terms of the treaty to satisy many of the concerns expressed in the United States House of Representatives and the Senate,' the Daily Nation was told by another un-named source.

Reports circulating following the conclusion of the first round of discussions have suggested that the Barbadian government has taken a pragmatic approach to the US proposals, recognising that some changes must be made in order to avoid incurring the wrath of US lawmakers, but wary that America is seeking to essentially 'gut' the bilateral double tax agreement.

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