Barbados Agrees To Phase Out Harmful Tax Regimes

Two Barbados preferential tax regimes have been labelled “potentially harmful” in additional guidance released by the OECD in connection with its base erosion and profit shifting (BEPS) project.

The guidance singles out Barbados’s international financial services regime and its credit for foreign currency earnings/credit for overseas projects or services regime. The guidance also says Canada’s regime for international banking centers, which was abolished some years ago but with limited grandfathering, should be fully abolished.

Barbados has already committed to amending the two regimes named in the guidance, a fact which the OECD has acknowledged.