Senate Approves Updated US/Barbados Tax Treaty

by Leroy Baker, Tax-News.com, New York

17 November 2004

The amended tax treaty between the United States and Barbados was unanimously approved by the US Senate last month, according to a Barbados Advocate report.

The Second Protocol to the US/Barbados tax treaty, signed by US Treasury Secretary John Snow and Barbadian Minister of Industry and International Business Dale Marshall in July 2004, seeks to strengthen anti-treaty shopping provisions to ensure that the benefits of the treaty go only to bona fide residents of each country.

The treaty is awaiting ratification by the House of Assembly in Barbados before it can become law.

However, according to the Advocate, some tax experts have expressed unease that certain new provisions have found their way into the treaty without being fully reviewed.

The report cited Judith P. Zelisko, president of the Tax Executives Institute (TEI), who, whilst supporting the bulk of the new agreement, pointed to concerns over rules expanding the Limitations on Benefits provision to the US treaty network “without thorough analysis.”

However, Zelisko conceded that despite these reservations, “on balance we agree that ratification of the Barbados Protocol is in the best interest of the country and the business community”.

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