• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      Sustainable Investment Festival 2021

      The Sustainable Investment Festival will run online from 22-25 June and will include thought-provoking presentations from renowned keynote speakers, innovative breakout events and sessions specifically tailored to meet the information needs of fund selectors, financial advisers, pension consultants, trustees and scheme managers.

      • Date: 22 Jun 2021
      • Online, Online
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Regulation

Barbados' economic substance rules brings an end to separate tax rates

Barbados' economic substance rules brings an end to separate tax rates
  • Pedro Gonçalves
  • @PeterHSG
  • 10 February 2020
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

Barbados has introduced  new economic substance requirements that effectively brings down the so-called ‘ring fence' that kept two separate tax rates for local and international business companies.

As of January, the concept of an International Business Company in Barbados no longer exists: for tax purposes all companies are now Regular Barbados Companies, regardless of where their customers are and if they are foreign owned. "This means that a one-tiered tax rate system is now in effect on the island," Maria Robinson and La-Tanya Edwards at EY wrote in an article for Business Barbados. 

Related articles

  • Offshore jurisdictions protest as Netherlands puts them on blacklist
  • Guernsey to stay on Netherlands tax blacklist
  • Tax information sharing causes 25% drop in IFC bank deposits: OECD
  • OECD recognizes low-tax jurisdictions as compliant and 'non-harmful'

The new requirements in Barbados are contained in the Business Companies (Economic Substance) Act, 2018. The Act requires business companies that are resident in Barbados for tax purposes and which conduct certain types of activity to have adequate substance in the jurisdiction.

The consequences of non-compliance with the Act or failure of the economic substance test are varied and include financial penalties, disclosure to the competent authority in the jurisdictions where the holding company, ultimate holding company and ultimate beneficial owner(s) reside, as well as enforcement action.

Companies that fail to meet the test in one year are liable to a penalty of up to $150,000. Failure to meet the test the following year means another $150,000 penalty will be added to the first. 

Failure to provide information required by the regulator or provision of inaccurate information to the regulator carries a penalty of $75,000. A right of appeal exists in relation to penalties which have been ordered by the regulator.

The new requirements are in response to European Union and OECD initiatives to prevent harmful tax practices and profit shifting. Similar legislative enactments have been implemented in a number of international financial services jurisdictions such as Anguilla, the Bahamas, Bahrain, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turks and Caicos Islands.

 

Subscribe to International Investment's free, twice-daily, newsletter

 

 

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Regulation
  • Barbados
  • EY
  • OECD
  • Economic Substance

More on Regulation

Collapse of Jersey-based Football Index faces new UK probe

  • Regulation
  • 13 April 2021
US regulator targets 'opaque' money laundering in beneficial ownership notice

  • Regulation
  • 07 April 2021
UAE central bank issues best practice rules for financial products

  • Regulation
  • 06 April 2021
Financial ombudsman service 'unfit for purpose' says think tank

  • Regulation
  • 31 March 2021
Dubai regulator sets deadline for cryptocurrency feedback

  • Regulation
  • 29 March 2021
Back to Top

Most read

First digital only bank in UAE set to go live
First digital only bank in UAE set to go live
Standard Chartered names Singapore heavy hitter for global role
Standard Chartered names Singapore heavy hitter for global role
UK government must 'U-turn' on pension age change
UK government must 'U-turn' on pension age change
DeVere UK and Fidelius enter strategic partnership
DeVere UK and Fidelius enter strategic partnership
Bitcoin hits record high on cusp of Coinbase IPO
Bitcoin hits record high on cusp of Coinbase IPO
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading