Permanent Residents in The Bahamas will Receive Tax Residence Certificates
Tax residency certificates have been issued in The Bahamas for those who have been given permanent residency, often through The Bahamas Permanent Residency Certificate.
Only individuals who spend a minimum of 90 days in the Bahamas and no more than 183 days in another nation will be eligible for the Bahamas Tax Residency Certificates. They will have unique taxpayer identification numbers (TINs) that will show the holder’s country of birth or citizenship that the Bahamas is his primary abode and that his financial accounts are subject to CRS international information sharing agreements.
The adjustment comes after the Organization for Economic Co-operation and Development (OECD) expressed concern that its residence-by-investment system was being utilized by money launderers and tax evaders to avoid CRS obligations.
Bahamas Tax Residency Program
According to the OECD, residence-by-investment schemes could “offer a back door to money launderers and tax evaders” by avoiding the Common Reporting Standard (CRS), which requires tax authorities in various jurisdictions to collect information on their tax residents’ financial accounts and pass it on to their counterparts in other countries. For example, the individual could inform his bank that he solely lives in his adopted country for tax purposes, but that he actually lives in numerous other jurisdictions.
Minister of Financial Services, Trade and Industry, and Immigration, Brent Symonette, addressed the Society of Trust and Estate Practitioners (STEP) Caribbean Conference that these certifications will help prove conformity with home country tax rules and answer OECD accusations.
“When the DPM (deputy prime minister), attorney general, and I were in Paris a few months ago, the OECD expressed concern about those who use permanent status to avoid paying taxes in their own country.
“Right now, in the Attorney General’s Office, we’re working on getting a permanent residency certificate, which has been authorized in principle.” This implies you must spend at least 90 days in this nation – not consecutively, but over the course of a year – and no more than 183 days in another country.
“Let’s assume you were born in France; on your permanent residency [certificate], you’d get a tax information number, which you could use anywhere in the world and say, “Look, this is my tax information number in The Bahamas.” I am a permanent resident of The Bahamas, so any taxes owed in that nation or anywhere else in the world would be deducted.”
To protect the territory, its clients, and citizens, Tanya McCartney, the Bahamas Financial Services Board’s (BFSB) chief executive, told local news site Tribune Business that a distinction between permanent residency and tax residency was required.
“This is something that the business has been requesting for a long time: clarity on how individuals will be able to objectively demonstrate that they are tax residents.” There are a lot of people in the country who are permanent residents.
“In order to avoid violating any international restrictions, we must distinguish between permanent residency and tax residency.” We had previously made proposals to the administration regarding the implementation of a tax residence certificate. The outcome was the result of a partnership between the public and private sectors. She went on to say, “We stand ready and eager to work quickly to see that this is done.”