Negotiations Continue Over Barbados-Canada Tax Agreement

by Amanda Banks, Tax-News.com, London

28 February 2002

The Barbadian Director of International Business, Lynette Eastmond, revealed on Monday that the jurisdiction's tax authorities are close to a resolution in ongoing negotiations with the Canadian revenue authority over a new Double Taxation Agreement (DTA).

Although in her analysis of 2001, Canada's Auditor-General, Sheila Fraser, revealed that the agreement had been 'testing' the Canadian Customs and Revenue Agency's enforcement capability, according to Ms Eastmond, the vast majority of the technical issues which had been delaying progress on the agreement have now been resolved. The jurisdiction's recent removal from the OECD blacklist means that discussions can now continue unimpeded.

A key article of the amended agreement, according to reports, is an improvement to information exchange provisions. The Canadian Revenue Agency is also seeking to crack down on a number of tax evasion schemes designed to exploit loopholes in the original treaty, so another important change is likely to be the inclusion of provisions for Canada to tax capital gains when assets are clearly shifted from one country to another solely for the purposes of capital gains tax avoidance.

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