Government responds to latest development

Trinidad and Tobago has the inglorious distinction of remaining on the European Union’s (EU) tax blacklist.

The Caribbean twin-island republic’s legal framework has still not been deemed to be robust enough to enable the country to be moved from the EU tax blacklist.

Finance Minister Colm Imbert made the disclosure as he responded to a question from Member of Parliament Rodney Charles on why the country is still listed as a “non-cooperative jurisdiction for tax purposes”.

This despite the Opposition’s support of all four pieces of legislation, which sought to remove Trinidad and Tobago from the EU blacklist. The four pieces of legislation are the Companies Amendment Act, the Income Tax Amendment Act, the Mutual Administrative Assistance in Tax Matters Act (MAAC) and the Tax Information Exchange Agreements Act (TIEA).

Asked why other Caribbean territories had been able to engage the EU and identify all the outstanding issues, passed legislation and come off the blacklist, while T&T is still in that position today, Imbert responded in Parliament: “Those countries, fortunately for them, do not have an Opposition UNC which refuses to co-operate and refuses to pass special majority legislation.”

Reasons for blacklisting

He explained that the main reason for Trinidad and Tobago’s placement on the blacklist was as a result of a non-compliant Global Forum rating under the Exchange of Information on Request and the Automatic Exchange of Information standards.

According to the finance minister, “another reason for Trinidad and Tobago’s placement on the list was our designation by the OECD, Forum of Harmful Tax Procedure as possessing a harmful tax regime because of what was seen to be our ‘ring-fenced’ Free Zone Regime”.

He added: “Progress has been made in this area whereby Trinidad and Tobago administratively closed off the regime to new entrants by January 1, 2019 and the Special Economic Zones Act 2021 was partially proclaimed in January 2022. In this regard, draft SEZ Regulations are currently being finalised by the Ministry of Trade and Industry.”

Finally, as it relates to its Country-by-Country Reporting (CbCR) status, Trinidad and Tobago’s 2022 Peer Review was found to have deficiencies in its legal and administrative frameworks for the exchange of information and the use of CbC reports. Accordingly, Trinidad and Tobago made a commitment to the EU to fully implement CbCR by 2023 and for this to be reflected in the 2023 Peer Review Report.

In so doing, Trinidad and Tobago is currently finalising draft CbCR legislation for enactment in 2023.

Regarding the four key pieces of legislation earlier referred, the Companies Amendment Act, the Income Tax Amendment Act, MAAC and TIEA are being enacted to address the known deficiencies at the time.

Since then, the EU has given Trinidad and Tobago 23 additional recommendations with the government engaging the Global Forum Secretariat to review these four pieces of legislation to ensure that they addressed the known deficiencies sufficiently.