Client Update December, 2019 - Economic Substance Update
Since our previous update in May, Barbados has continued to work with the OECD to complete all required changes with respect to the BEPS initiative and in response to its' Action 5 thereof. Barbados has concluded its negotiations, amended or repealed certain preferential regimes and has now updated its Economic Substance legislation and issued Guidelines in support.
Kindly therefore note that the Business Companies (Economic Substance) Act, 2018-41 has been repealed. In its place the Companies (Economic Substance) Act, 2019-43 has been passed effective November 29, 2019 and the Barbados Economic Substance
Guidelines have been issued on December 4, 2019.
Companies (Economic Substance) Act 2019-43
An Act to provide for the imposition of an economic substance test on
companies carrying on business in Barbados and for related matters.
[Commencement: 29th November, 2019]
Barbados Economic Substance Guidelines
The Companies (Economic Substance) Act, 2019-43 (“ESA”) introducing economic substance requirements for companies in Barbados was approved by Barbados Parliament on 27 November 2019 in response to the work of the Organization for Economic Cooperation and Development (“OECD”) as part of the Base Erosion and Profit Shifting (“BEPS”) Action 5 and the European Union (“EU”) Criterion 2.2 initiatives.
These standards require geographically mobile activities to have economic substance regardless of whether the activities are conducted in a no or nominal tax jurisdiction or in a preferential tax regime of a jurisdiction that has corporate income tax.
The ESA applies to all Barbados resident companies conducting relevant activities and is effective for fiscal periods commencing on the dates prescribed in the Regulations.
This document provides guidance on the scope and application of the ESA.
Client Update November, 2018
CCSL is committed to ensuring that our clients are updated on legislative changes and the impact on how you do business through any relevant corporate entity. Below are the highlights of the proposed changes announced on November 20, 2018
Read the update by clicking the link below: