More financial amendments to legislation to address blacklisting by EU

Published by BBN Staff at October 4, 2019

Posted: Friday, October 4, 2019. 11:44 am CST.

By Aaron Humes: Belize continues to fight the blacklisting of the European Union (EU) as a non-cooperative jurisdiction for tax purposes which took place at the end of February.

Amendments to relevant legislation made in 2017 and 2018 were not enough to satisfy the EU and Organization for Economic Cooperation and Development (OECD), and ahead of a meeting later this month, the Government today introduced amendments to four existing pieces of legislation and a new act to further address the issue.

In asking for the amendments and Economic Substance Bill to be taken through all their stages this day, Prime Minister Dean Barrow explained that it had been agreed to work with the EU between the Government, the International Financial Services Commission (IFSC) and Offshore Practitioners’ Association to author the legislation that will take Belize to compliance.

The new act proposes to make improved provisions for substantial economic presence to be fulfilled by certain entities, provide for reporting requirements in certain instances and other matters.

The other amendments are to the International Business Companies Act, to clarify the status of physical presence as a component of economic substance, which an international business company that is a commercial entity must satisfy; the International Financial Services Commission Act, which substitutes the criteria for physical presence with substantial economic presence in Belize; indemnifies the Commission, its Director General, and officers from legal liability for actions taken in good faith; sets disciplinary measures and criminalizes the unauthorized disclosure by officer of document, paper, or information; the Income and Business Tax Act to clarify that international business companies who are not persons resident in Belize may file a return of income; and the Stamp Duties Act to clarify the circumstances when an IBC is required to pay stamp duties, among other things.

The Prime Minister said the Senate would meet next week to review the legislation, assuming the House approves, and the EU/OECD would then hopefully be satisfied by the final assent of the Governor General.

Opposition Leader John Briceño registered that he still had some concerns that would be addressed in the forthcoming debate.

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