News

The Bill for the Act to Amend the Automatic Exchange of Financial Account Information (Common Reporting Standard) Act Number Six Of 2019 was passed in Parliament.

In 2002 the Government of Dominica gave its commitment to support the Organization of Economic Cooperation and Development (OECD) with its work on harmful tax practices by committing to the principles of transparency and effective exchange of information relevant to tax matters upon request.

The OECD has developed international standards of transparency and exchange of information relevant to tax matters upon request.

The bill was brought forward by the Minister for Tourism, International Transport and Maritime Initiatives, Hon Denise Charles.

“These standards include exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic laws of the treaty partners; no restrictions on exchange by reason of bank secrecy or domestic tax interest requirements; availability of reliable information and powers to obtain it; respect for tax payers rights and strict confidentiality of information exchanged. The OECD has also developed a list of criteria which is used to measure countries’ performance. These criteria covers tax transparency, fair taxation, and implementation of international standards designed to prevent tax based erosion and profit shifting. The list of criteria has been revised several times and was updated twice in 2020,” Hon. Charles stated.

The OECD Global Forum on transparency and exchange of information on request for tax purposes is responsible for assessing countries based on the criteria.

“The Global Forum undertook a review of Dominica’s systems in 2020 and reported December 2020 that Dominica had moved from a largely compliant rating to a partially compliant rating. The forum made some recommendations to address the deficiencies including the need for enhancements to Dominica’s legislative and administrative framework. Following receipt of the partially compliant rating, Government developed an action plan to address the outstanding matters.  Government also immediately appointed a working group comprising officials of the Ministries of Finance and National Security and the Attorney General Chambers to work on the implementation of the action plan under the guidance of the Global Forum,” Hon. Charles explained.

Government has taken a number of actions to address the administrative matters.

“The establishment of an international tax unit within the Inland Revenue Division with the additional staff positions; the procurement of a new IT system which will better facilitate the automatic exchange of information between Dominica and other jurisdictions; we have augmented the staff complement at the company’s registry to assist in cleansing and updating the company’s register; and have put in place some additional manuals to formalize current procedures. With respect to the legislation a few amendments are required to two of Dominica’s laws namely The Companies Act Chapter 78:04 of the 2017 Revised Laws of Dominica and the Automatic Exchange of Financial Account Information (Common Reporting Standard) Act Number 6 of 2019,” the Minister noted.

Minister Charles stated the proposed amendments to the Bill to parliament.

“The proposed amendments are as follows: Section 2 of the Act is amended by inserting the following new sub-section 3. For the purposes of the standard, the threshold for controlling ownership interest in a legal person is a threshold specified in Section 2 of the Anti-Money Laundering and Suppression of Terrorist Financing Code of Practice. Section 7 of the Act is amended in sub-section 2 by deleting the Figure 31 and substituting the figure 30,” Hon. Charles added.

The final amendment is to section 19 of the Act by inserting the following new subsection (4). Regulations are made under this section may create offences and may prescribe penalties or the offences on conviction of a fine not exceeding twenty-five thousand dollars or to imprisonment for a term not exceeding four years.

Minister Charles says this Bill will assist Dominica in meeting its international tax obligations.