Member States of the Caribbean Community (CARICOM) met on December 1 to review the ten-year old Intra-CARICOM Double Taxation Agreement (ICDTA).
Maurice Odle, Economic Adviser to the Secretary-General of CARICOM, joined with the Heads of Tax Administrations and other representatives in discussing the effectiveness of the Agreement, with the aim of ensuring that it is working as intended, and is of benefit to all signatory Member States.
Odle noted that the meeting was particularly relevant, given that Member States’ revenues had fallen significantly following the financial crisis.
Addressing participants, Odle stated: “I am sure that as tax administrators, you have been called upon to maintain and even increase tax revenues in a situation where almost all aspects of economic activity have been on the decline. In such circumstances, it is important that we seek to ensure that instruments which impact on tax revenues are functioning as intended.”
The main intention of the ICDTA, Odle explained, was to remove trade barriers within the Caribbean region, to boost multilateral trade ties and prosperity. The double tax agreement is dissimilar to conventional DTAs, that are concluded worldwide on a regular basis, because of its multilateral application, and is closer to a Free Trade Agreement, while providing for tax information exchange.
According to Odle, the meeting presented an opportunity for the designated Competent Authorities to review the administration and application of the agreement, following feedback which revealed that a number of abuses of the system had led to some Member States being disadvantaged.
Among the issues the seminar looked at were those related to differences in interpretation of provisions of the agreement, as well as the modalities for the activation of a clause on the Exchange of Information.
Participants also reviewed a draft of the Technical Explanations which underpin the interpretation of the provisions of the Treaty, setting out the rationale for prevailing principles and policy objectives of the Agreement.
Recommendations from the seminar will be placed before the Council for Finance and Planning when it meets early next year.
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