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Bahamas and Canada Sign Tax Information Exchange Agreement (TIEA)

July 27th, 2010


Canadian companies have an added incentive to set up regional headquarters in The Bahamas thanks to a new Tax Information Exchange Agreement signed on Thursday, June 17, 2010.

Signatories to the TIEA were Mr. Symonette and His Excellency Stephen Hallihan, High Commissioner for Canada to The Bahamas, in a ceremony at the House of Assembly Majority Room.

It was the 22nd tax information exchange agreement signed by The Bahamas; 16 with Organization for Economic Cooperation and Development countries and 9 with members of the G20 countries. This one is a little different in that it contains elements similar to that of a double tax agreement which nations with income taxes generally sign.

“Signing the TIEA, Deputy Prime Minister Brent Symonette said: ‘Once this agreement enters into force it will extend exempt surplus treatment to dividends paid to a Canadian parent corporation by its foreign affiliates resident and carrying on business in The Bahamas, allowing such dividends to be exempted from tax in Canada'” (The Bahamas Weekly).

The new Agreement is one of many longstanding economic links between The Bahamas and Canada, and is one of the best in terms of providing reciprocal economic and trade benefits, particularly in financial services, tourism, construction and the hospitality sectors. It also places the country on equal footing with Barbados in terms of “double tax” benefits.

Currently, major Canadian-owned banks, especially FirstCaribbean, have their regional headquarters domiciled in Barbados, largely because of that nation’s “double tax” treaty with their homeland. The treaty ensures their profits are only taxed once – at the lower Barbadian rate – rather than at the higher Canadian thresholds, and has acted as a major draw for Canadian companies seeking to do business in the region to establish their bases there. (The Tribune)

High Commissioner to Canada Stephen Hallihan said, “Canada is very pleased to be signing this exchange agreement with The Government of The Bahamas. It will, quite simply, make our taxation regimes more transparent, more effective and it will allow both countries to actually more effectively implement the tax systems that we have in place” (The Bahamas Weekly).

The Bahamas has previous Tax Information Exchange Agreements with the United States of America, Principality of Monaco, Republic of San Marino, United Kingdom, New Zealand, and People’s Republic of China, Argentina, the Netherlands, Belgium, France, Mexico, Denmark, The Faroes, Finland, Greenland, Iceland, Norway, Sweden, Spain, Australia, and Germany.

And, on the same day of the signing of the TIEA, the Bahamas financial services industry held a briefing for its members on the latest development and amendments to The Bahamas and United States TIEA Act and Regulations, namely:

  • The International Tax Cooperation Act, 2010
  • The International Tax Cooperation Regulations, 2010
  • The Bahamas and the United States Tax Information Exchange Agreement (Amendment) Act, 2010
  • The Bahamas and the United States Tax Information Exchange Agreement (Amendment) Regulations, 2010

The Government of The Bahamas’ expanding network for tax information exchange proves The Bahamas’ ability to benefit from the changing global regulatory environment and enjoy continued growth in its international business industry.

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The Abaconian: Where Is Abaco Headed

November 9th, 2009

The Abaconian November 1st editorial by David Ralph notes that despite the sluggish world economy and a slower Bahamian economy, recent and proposed developments on Abaco show a more resilient market and a confidence in the island’s future.


Editorial for November 1st

Where Is Abaco Headed

The world’s economy may be sluggish,
The Bahamian economy may be slow.
But for developers looking at Abaco,
The mood seems to be “Let’s go.”

A broad view of the world’s economy is distressing. Businesses are
retrenching, employees are being laid off and homeowners are
defaulting on their mortgages. The big picture is rather bleak.

Yet, here on Abaco the view is somewhat different. Although some
projects have scaled back a bit which is painful to those workers laid
off, we seem to be holding our own. Bankers, developers and government
observers constantly express the view that Abaco is holding its own
better than most of The Bahamas.

Even though some of Abaco’s recent projects may have slowed a bit, the
trend seems to be continued investment and expansion …

Serenity Point, just north of Schooner Bay, is offering ocean front
and interior residential lots on paved roads with utilities in place.
It is well on the way to offering fully serviced lots to the public.

Read the full editorial for November 1.

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