Barbados moved to EU "grey list," after making undisclosed "commitments" to change laws
On 17 May 2019, the EU Council approved the removal of Barbados from its list of non-cooperative jurisdictions for tax purposes. However, no details have as yet been released by the government on what the sticking points are on this issue between Barbados and the EU, or what legislative action Barbados may have to take to get off the grey list and return to the white list. Neither has the deadline for doing this been released.
Last week Prime Minister Mia Mottley said she was “pleased and thankful” that Barbados had been removed from the European Union (EU) list of non-cooperative tax jurisdictions. Addressing a press briefing at Government Headquarters, following the exit of the IMF Mission, the prime minister explained the significance of the removal for Barbados, saying “It means insurance companies that could have left us will now not do so because they will not be prohibited from doing business in Europe, [as would have been the case] as a result of the blacklist.”
According to an explanatory note supplied by the Barbados office of EY, the previous version of the list which was released on 12 March 2019 asserted that the country had been deemed non-cooperative because it “…replaced a harmful preferential tax regime by a measure of similar effect and did not commit to amend or abolish it by the end of 2019.”
The Council’s most recent press release, noted EY, indicates that subsequent to the March listing, correspondence was exchanged between the Barbados Minister of International Business and Industry, and the Code of Conduct Group. Pursuant to that exchange, the Council concluded that “Barbados has made commitments at a high political level to remedy EU concerns regarding the replacement of its harmful preferential regimes by a measure of similar effect…”
As a consequence of the 17 May decision, Barbados will be moved to the “grey list” for monitoring of its progress in respect of the commitments made.She added that “Our ability to be nimble, flexible but always sound on the core principles to be a well regulated but competitive jurisdiction, is what will make Barbados different.”
Ms. Mottley thanked all involved, including the Minister of International Business and Industry, Ronald Toppin, and his team, as well as Ministry of Finance officials for working to ensure Barbados was removed from the blacklist.
Patrick R. Hoyos is a Barbadian journalist who focusses on business and the economy. He is CEO of Hoyos Publishing Inc., publisher of this website and the annual Who's Who in Barbados Business.