Barbados Wants To Add Japan To Tax Treaty Network

by Amanda Banks, Tax-News.com, London

30 August 2006

The possibility of a double taxation avoidance agreement has recently discussed by representatives of the Barbadian and Japanese governments.

According to report by the Barbados Advocate, the idea was the product of a meeting between Acting Prime Minister and Minister of Economic Affairs and Development, Mia Mottley, and the new Ambassador to Barbados, Koichiro Seki, who is based in Trinidad.

Mottley argued that such an agreement would be beneficial for both countries in terms of increased investment opportunities.

Noting that his country has a relatively small double tax treaty network, Ambassador Seki announced that he would raise the issue of a Japan-Barbados DTA with his own government.

As of 2006, Barbados has 14 tax treaties with the following regions and countries: The Caribbean Common Market (CARICOM), the United States, Canada, United Kingdom, Finland, Norway, Malta, Sweden, Switzerland, Cuba, Venezuela, China, Mauritius and Botswana. Negotiations towards DTAs have also been concluded with Austria and the Netherlands.

However, the most significant treaty is the one that Barbados signed with the US in 1984, which was accompanied by an exchange of tax information agreement.

The treaty creates opportunities for 3rd country investors in US real estate, and is also attractive to US manufacturers. Many US investors are exempted from US accumulated earnings tax on Barbadian profits - a rare feature in US tax treaties. A protocol to the US treaty signed in 1991 lowered withholding rates and introduced new 'limitations on benefits' rules.

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