Barbados

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Overall Phase 2 Rating is Largely Compliant

Table of Determinations and Ratings of the Supplemental Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The Foundations Act requires the secretary (of domestic foundations) and registered agent (of international foundations) to maintain a register containing information on the foundation’s beneficiaries. However, in the case of domestic foundations, the secretary is not required to be present in Barbados or be subject to Barbadian jurisdiction.   Barbados should ensure the availability and accessibility of ownership and identity information with respect to both international and domestic foundations. 
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although penalties for non-compliance with filing obligations have been introduced into Barbadian law, legal provisions are too new to have been enforced. Penalties for non-compliance are still unenforced in practice. Neither have any non-monetary penalties (such as striking off) been applied in the period under review.  Effective enforcement measures should be taken to ensure that all entities comply with their requirements to maintain ownership information. 
The Ministry in charge of International Business still does not have in place a system of monitoring compliance with ownership and identity information keeping requirements in respect of all international entities and trusts. The International Business Division has not yet developed a compliance department and to date, no supervision of IBCs, licensed trustees and service providers is taking place.   Barbados should implement a regular and comprehensive system of oversight to ensure compliance by all relevant entities with obligations to maintain ownership information under Barbadian law. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Barbados legislation does not ensure that reliable accounting records or underlying documentation are kept for all trusts.   All relevant entities and arrangements should be required to maintain reliable accounting records including underlying documentation for a minimum of 5 years. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  During the review period, Barbados did not have a regular system of oversight in place with respect to international entities. Although the tax authority routinely audited domestic entities, no IBCs were audited in the three years under review.   Barbados is recommended to ensure that there is adequate oversight of the compliance of international entities with their accounting obligations. 
No sanctions have been applied for any violation of record-keeping or filing obligations under any law. Although sanctions exist for the most part, no authority has yet applied them.   Effective enforcement measures should be taken to ensure that all entities comply with record-keeping and filing requirements. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Barbados experienced significant delays in responding to eight requests for banking and ownership information over the review period although these delays do not appear to stem from deficiencies in the legal framework for Barbados’ access powers. In those cases, Barbados experienced delays of close to a year accessing information held by a third party information holder and yet compulsory powers were not used.   Barbados is recommended to use its compulsory powers in all EOI cases to ensure that all information for exchange of information purposes is obtained in a timely manner. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Barbados should continue to develop its exchange of information network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  During the three years under review, Barbados has not regularly provided status updates to its EOI partners within 90 days when the competent authority was unable to provide a substantive response or when further information from the requesting jurisdiction was needed. Further, the Barbadian tax authority was restructured in 2013, resulting in a period of unresponsiveness of more than a year, during which time no requests were answered and no status updates were provided.   Barbados should systematically provide an update or status report to its EOI partners within 90 days when the competent authority is unable to provide a substantive response within that time. 
Barbados has experienced some difficulties during the review period to answer EOI requests in a timely manner due to a variety of reasons, unrelated to the specific type of information requested. Due to organisational issues, two EOI requests were misplaced and had to be re-sent and delays occurred in a number of other cases. Finally, Barbados has still not answered one of the requests received in 2013 by the EOI unit.  Barbados should ensure that answers to EOI requests are made in a timely manner in all cases. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.