Kingdom off EU safe haven list

Manama : The European Union yesterday decided to remove Bahrain from its tax haven list.

The decision to remove from EU’s list of non-cooperative jurisdictions in taxation matters was taken during a meeting of the EU Economic and Financial Affairs Council (Ecofin) in Brussels.

Rana E. Faqihi, Assistant Undersecretary for Public Revenue Development at the Ministry of Finance, viewed the move as a testimony to the regulatory system of the financial and banking sector in the Kingdom and its adherence to best international practices.

She also noted that the removal is a culmination of a series of measures taken by Bahrain with a vision of enhancing transparency with regard to taxation issues. This includes, inter alia, joining the Global Forum on Transparency and Exchange of Information for Tax Purposes, and the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS).

Further, Bahrain also signed the Convention on Mutual Administrative Assistance in Tax Matters (MAC), and the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information (MCAA). Both documents which are currently being ratified in line with Bahrain’s constitution. They complement a robust tax treaty network, which includes more than 50 signed instruments on the exchange of tax information.

Faqihi said that Bahrain is proud to maintain a financial regulatory infrastructure which is globally recognised for its strength and efficiency, and will continue to work with the EU and other relevant regional and international bodies to combat all forms of tax evasion.

Concerns addressed

The EU also removed, the Marshall Islands and Saint Lucia from the tax haven list. Since the list was first published on December 5, 2017, Bahrain, the Marshall Islands and Saint Lucia have made commitments at a high political level to remedy EU concerns.

“In light of an expert assessment of those commitments, it was decided to move the three jurisdictions,” said the ministers in a statement.

They, however, added Bahamas, Saint Kitts and Nevis and the US Virgin Islands to the list. The EU’s list is intended to promote good governance in taxation worldwide, maximising efforts to prevent tax avoidance, tax fraud and tax evasion.

“I am glad to see more jurisdictions that we listed in December committing themselves to reforming their tax policies in a manner that will remedy our concerns,” said Vladislav Goranov, minister for finance of Bulgaria, which currently holds EU presidency, in a statement.

“We call on all jurisdictions on the list to do likewise, and on all those that have already made commitments to implement them in a timely manner. Our aim is to achieve optimal tax transparency worldwide”, he added.

Nine of the original 17 jurisdictions remain on the EU list: American Samoa, Bahamas, Guam, Namibia, Palau, Samoa, Saint Kitts and Nevis, Trinidad and Tobago and the US Virgin Islands.