Manama : Bahrain yesterday said it “strongly believes that it cannot be considered as a tax haven” and will initiate a dialogue with the EU to change the status.
“Bahrain will initiate dialogue with the EU on this matter, to ensure understanding and recognition of the Kingdom’s efforts to ensure financial transparency, international cooperation and a robust regulatory environment,” the statement said.
Bahrain, along with UAE and 16 other jurisdictions were blacklisted by the European Union accusing as non-cooperative for tax purposes. The list was based on criteria around perceived approaches to transparency and information exchange, fair tax competition and implementation of the OECD’s Base Erosion and Profit Shifting (BEPS) standards.
Bahrain said it will commit to being a member of the Inclusive Framework on BEPS which brings together over 100 countries and jurisdictions to collaborate on the implementation of the OECD / G20 BEPS Package.
Bahrain, in its response to EU, also pointed out that it has already communicated to the Global Forum on Transparency and Exchange of Information its intention to exchange tax information automatically with all EU member states as part of the continuing Common Reporting Standard (CRS) initiative.
According to the EU statement, Bahrain’s inclusion was due to the Kingdom not covering all EU Member States for the purpose of automatic exchange of information.
The government said, contrary to the EU statement, on 29th June 2017, Bahrain signed both the OECD Convention on Mutual Administrative Assistance in Tax Matters (the Convention) and the Multilateral Competent Authority Agreement (the MCAA), allowing Bahrain to collect information from its financial institutions and automatically exchange that information on a yearly basis with its fellow Convention and MCAA signatories.
“This will be ratified once both the Convention and MCAA have been approved by the Kingdom’s National Assembly, as required by Bahraini law, A process which has already commenced,” the statement said.
Furthermore, on 5th December 2017, the Bahrain-US FATCA Inter-Governmental Agreement was approved by the National Assembly, whilst the Kingdom has signed 51 bilateral Tax Treaties which allow for the exchange of information for tax purposes. Included in these treaties are 17 treaties with EU member, several of which have already been used to request information from Bahrain.
Source Credit: NewsofBahrain