|
(No. 22 of 2003) |
AN ACT TO MAKE PROVISIONS |
AUTHORIZING THE ENFORCEMENT OF |
CERTAIN OBLIGATIONS OF THE BAHAMAS
UNDER AN |
AGREEMENT ON TAXATION MATTERS |
SIGNED ON 25TH JANUARY, 2002 AT
WASHINGTON D.C. IN |
THE UNITED STATES OF AMERICA
BETWEEN THE |
GOVERNMENT OF THE BAHAMAS AND |
THE GOVERNMENT OF THE UNITED
STATES OF AMERICA, |
AND TO PROVIDE FOR OTHER CONNECTED
OR |
INCIDENTAL PURPOSES. |
(Date of Assent — 22nd
December, 2003) |
Enacted by the Parliament of The
Bahamas. |
1.(1) This Act may be cited as The
Bahamas and the United States of America Tax Information Exchange Agreement
Act, 2003. | Short title and commencement. |
(2) This Act shall come into force
on the Pt day of January, 2004. | Interpretation. |
|
"Agreement" means the arrangements between
The Bahamas and the United States entered into on 25th January, 2002 at
Washington, D. C. in the United States of America by the Government of The
Bahamas and the United States Government for the provision of information with
respect to taxes and for other matters, the text of which is set forth in the
Schedule; | Schedule. |
"Article" means Article of the
Agreement; |
"business" means a profession or
trade; |
"civil matter" means an examination,
investigation or proceeding relating to United States federal tax administration
and enforcement with respect to conduct that does not constitute a criminal tax
offence under the laws of the United States that is pending at the time of a
request and which relates to a taxable period commencing on or after January 1,
2006; |
"Competent Authority" means - |
(a) in the case of The Bahamas, the
Financial Secretary in the Ministry of Finance; and |
(b) in the case of the United
States, the Secretary of the Treasury or his delegate; |
"criminal matter" means an examination,
investigation or proceeding concerning conduct that constitutes a criminal tax
offence under the laws of the United States that is pending at the time of a
request and which relates to a taxable period commencing on or after January 1,
2004; |
"document" includes any book, page,
statement, account, writing or record, howsoever recorded or stored; |
"information" means any fact or
statement, in any form, that is foreseeably relevant or material to United
States Federal tax administration and enforcement, including (but not limited
to) - |
(a) the testimony of an individual,
and |
|
"judge" means a Judge of the Supreme
Court; |
"Minister" means the Minister of
Finance; |
"pending matter" has the meaning
assigned to it under Article 1; |
"premises" includes any place whatsoever
and any means of transport; |
"privileged communication" means a
communication that - |
(a) is a confidential communication,
whether oral or written, passing between – |
(i) counsel and attorney in his or
her professional capacity and another counsel and attorney in such
capacity; or |
(ii) a counsel and attorney in his
or her professional capacity and his or her client, whether made directly or
indirectly through an agent of either; |
(b) is communicated or given to a
counsel and attorney by, or by a representative of, a client of his or hers in
connection with the giving by the counsel and attorney of legal advice to the
client; |
(c) is made or brought into
existence for the purpose of obtaining or giving legal advice or assistance;
and |
(d) is not made or brought into
existence for the purpose of committing or furthering the commission of some
illegal or wrongful act; |
"regulation" means regulations made
under section 13; |
"request" means an application made
pursuant to Article 2 for assistance; |
"resident" has the meaning assigned to
it by Article 1; |
"tax" has the meaning assigned by
Article 1; |
"the United States" has the meaning
assigned by Article 1; |
"the U.S. Government" means the
Government of the United States. |
(2) In this Act, a reference to
the Minister, in relation to any function to be performed by the Minister under
this Act, includes a reference to the Financial Secretary as the duly
designated Competent Authority under the Agreement. |
(3) A reference in this Act to the
performance of a function includes reference to the performance of a duty or
the exercise of a power or right. |
3.(1) This Act has effect for the
purpose of enforcing the giving of assistance by persons in The Bahamas in
connection with the performance of the obligations assumed by The Bahamas under
the Agreement and shall remain in force only for the duration of the Agreement. | Legal effect of this Act. |
(2) Subject to subsections (3) and
(4), the Minister in performing his functions under this Act, is not restricted
by any law or any rule of law relating to confidentiality except as expressly
provided in the Agreement. |
(3) For the avoidance of doubt it
is hereby expressly declared that nothing in this Act shall be construed as
imposing any obligation on the Government of The Bahamas to supply information
that constitutes or would reveal a privileged communication. |
(4) Nothing in this Act shall be
construed as imposing on the Government of The Bahamas any obligation to - |
a) carry out administrative measures
at variance with the laws and administrative practices of The Bahamas; |
b) supply particular items of
information which are not obtainable under the laws or in the normal course of
the administration of The Bahamas; |
c) supply information which would
disclose any trade, business, industrial, commercial or professional secret or
trade process; |
d) supply information the disclosure
of which would, in the judgement of the Government of The Bahamas, be contrary
to national security or public policy in The Bahamas; or |
e) supply information that relates
to a matter under United States federal tax law that is barred by the
applicable statute of limitations. |
4.(1) A request must be in writing. | Procedure in respect of a request. |
(2) A request must be signed by a
senior official designated by the U. S. Government. |
(3) A request shall include the
following particulars – |
a) that by the request, the U.S.
Government seeks the information identified in the request; |
b) that the information requested
relates to the carrying out of the laws of the United States following the
procedure as prescribed in Article 2; |
c) the identity of the taxpayer in
respect of whom the information is sought; |
d) whether or not the taxpayer is a
resident of the United States; |
e) a description of the requested
information including the type and form of information being sought; |
f) the period of time with respect
to which the information is requested; |
g) that the information relates to
an examination of the taxpayer identified in the request for a pending matter
relating to a taxable period of the taxpayer, being the period so specified in
the request; |
h) where the request also seeks
information relating to a time frame outside the taxable period specified in
the request, the request must clearly establish the connection between that
taxable period and the time frame for the information; |
i) that the period in respect of
which the information is sought is not barred by the applicable statute of
limitation of the United States; |
j) that the information sought is
in The Bahamas, its likely location and that a person in The Bahamas that is
specified in the request has or may have the information in his possession,
custody, or control; |
k) whether the information is
required for a civil matter or for a criminal matter; |
l) where the request is in respect
of a civil matter the law imposing the tax must be specified; |
m) where the request involves a
criminal matter the law contravened or believed to have been contravened must
be specified; |
n) a declaration that the
information being sought is foreseeably relevant or material to United States
federal tax administration and enforcement with respect to the person
identified in paragraph (c) above; |
o) the reasons for believing that
the information requested is foreseeably relevant or material to tax
administration and enforcement with respect to the person identified in
paragraph (c) of this subsection. |
(4) In addition to the requirement
under subsection (2) of this section, in the case where the information
requested is in respect of a matter which relates to a person who is not
resident in the United States or does not constitute a criminal matter, a
senior official designated by the U.S. Government must certify that the request
is foreseeably relevant or material to the determination of a tax liability of
a taxpayer of the United States, or to the criminal liability of a person under
the tax laws of the United States, as the case may be. |
5.(1) Subject to this section, where
the Minister has received a request in respect of which the requirements of
section 4 are fulfilled, he shall by notice in writing under this section
served upon the person referred to in paragraph (j) of subsection (3) of that
section direct him to deliver to the Minister the information referred to in
that paragraph. | Power to require production of
information. |
(2) For the purposes of
subsections (3) and (4) of this section, a subsection (2) matter is a matter - |
(a) with respect to which information
is sought in a request; and |
(b) which relates to a person who is
not a resident of the United States, |
whether or not the requirements of section 4
are fulfilled in relation to the request. |
(3) Where the Minister receives a
request which seeks information with respect to a matter which either - |
(a) is a subsection (2) matter;
or |
(b) does not constitute a criminal
matter, |
he shall not issue a notice under this section
to any person unless the Minister receives, in accordance with subsection (4)
of section 4 certification from a senior official designated by the Secretary
of the Treasury of the United States that the information sought by the request
is foreseeably relevant or material to the determination of the federal tax
liability of a United States taxpayer, or the criminal tax liability of a
person under the federal tax laws of the United States, as the case may be. |
(4) Notwithstanding the condition
for certification set out under subsection (3), where the Minister receives a
request which seeks information with respect to a subsection (2) matter, he
shall not issue a notice under this section to any person unless the Minister
is satisfied that the information is foreseeably relevant or material to the
administration and enforcement of the federal tax laws of the United States. |
(5) A notice issued under
subsection (1) of this section must‑ |
(a) contain the relevant details of
the request to which the notice relates; and |
(b) specify the time within which information
sought by the request is to be delivered to the Minister, which time shall not
be more than twenty-eight days, commencing with the day on which the notice was
served. |
(6) The Minister may extend the
time specified in the notice beyond twenty-eight days where he considers that
the circumstances warrant such an extension. |
(7) Subject to subsection (8), a
person who is directed by a notice under subsection (1) to deliver information
to the Minister shall deliver it to the Minister in accordance with the notice
if the information is in The Bahamas and that person has it in his possession,
custody or control. |
(8) A person complies with a duty
under this section to deliver information to the Minister if he makes the
information available to him. |
(9) A direction given in a notice
under this section to a person is an absolute defence to any claim brought
against him in respect of any act of his that was done, or any omission of his
that was made, in good faith in obedience to the direction. |
(10) Where the Minister receives a
request in respect of which the requirements of section 4 are fulfilled and
such information is publicly available through a registry within a government
department, the Minister may waive the requirements for notice under this section
. |
6.(1) The Minister, or an officer
designated by him, may apply to a judge in accordance with the provisions of
this section for a warrant to enter upon premises for the purpose of enforcing
a notice issued under section 5. | Power to enter premises to obtain
information. |
(2) Any officer so designated
under subsection (1) of this section must produce to the judge the written
authority signed by the Minister. |
(3) If, on information given on
oath by such an officer, a judge is satisfied that there is reasonable ground
for suspecting that an offence against this Act has been, or is being, or is
about to be, committed on any premises, being an offence by reason of which the
delivery to the Minister of information sought by a request is endangered, then
the judge may issue a warrant in writing authorizing an officer of the Ministry
to enter the premises at any reasonable time, if necessary by force, within
fourteen days commencing on the day of the issue of the warrant, and search
such premises. |
(4) In issuing a warrant under
this section, the judge may impose such restrictions upon the execution of the
warrant as he may deem proper in the circumstances. |
(5) An officer entering premises
by virtue of a warrant under this section may be accompanied by a police
officer and such other person and equipment authorized by the Minister as he
considers necessary to enable him to enforce the warrant, and on leaving such
premises entered by virtue of a warrant under this section, shall, if the
premises are unoccupied or the occupier is temporarily absent, leave them as
effectively secured against trespassers as the officer found them. |
(6) On entering premises by virtue
of a warrant under this section, the officer may seize and remove any article
or information relevant to a request under this Act wheresoever found which he
has reasonable cause to believe may contain information relevant to a request,
and shall immediately deliver to the Minister such article and information so
seized and removed. |
(7) Where entry to premises has
been made by virtue of a warrant under this section and the officer making the
entry has seized any article or information under the authority of the warrant,
the officer shall prepare a list of such articles or information and, if so requested
by a person showing himself either - |
(a) to be the occupier of the
premises; or |
(b) to have had possession or custody
of those articles or information immediately before the seizure, |
provide that person with a copy of that list. |
(8) Where articles and information
are seized under the authority of a warrant and it is shown that access to such
articles and information is required for the continued conduct of the business
or affairs of any person, the Minister shall afford to that person reasonable
access to those articles commencing on the day on which he obtained the
articles or information. |
7.(1) Subject to subsection (2),
where the Minister obtains articles by virtue of section 5 or 6, he shall - | Provision supplementary to sections
5 and 6. |
(a) unless he returns it pursuant to
paragraph (c), not disclose or reveal to any person the contents or import of
the articles or information, for twenty days commencing on the day on which he
obtained the articles or information; |
(b) after the expiry of the twenty
days, if the articles or information in his opinion contains information sought
by a request, he may make copies of such information as relates to the request
for onward transmission to the Competent Authority of the United States;
and |
(c) whether or not the articles or
information contains information sought by a request, return the articles or
information as soon as practicable to the person from whom he obtained it. |
(2) The Minister may extend the
time period under paragraph (a) of subsection (1) for the holding of any
article or information without further disclosure in the event a taxpayer or
interested person has objected to the Minister providing the assistance
requested or otherwise seeking judicial review of or other lawful recourse
against an act of the Minster pursuant to section 12. |
8.(1) A document to be served under
this Act is to be treated as properly served on the person to whom it is
addressed if it is served in the manner provided under subsection (2). | Service of documents. |
(2) The document may be served on
or delivered to the person personally or by being sent by registered post in
his name to his last known business or private address. |
(3) The time period specified in
section 7 of the Interpretation and General Clauses Act shall not apply to this
section. | Ch. 2. |
| Offences. |
(a) contravenes subsection (7) of
section 5; or |
(b) willfully obstructs an officer
executing a warrant under section 6 or a person lawfully accompanying him
pursuant to subsection (5) of that section, |
commits an offence. |
(2) Any person who, in connection
with delivering information pursuant to subsection (5) of section 5, wilfully
tampers with or alters any information or any part of such information so that
the information or any part of such information is false when received by the
Minister, commits an offence. |
(3) Any person who wilfully
alters, destroys, damages or conceals any information requested by the Minister
pursuant to section 5 commits an offence. |
(4) Any person who commits an
offence under this section shall be liable on summary conviction to a fine not
exceeding $5,000 or to imprisonment for a term not exceeding six months or to
both. |
10.(1) Where a request so stipulates,
the Minister shall obtain the information sought by the request in the form of
- | Depositions, etc. |
(a) depositions of witnesses;
or |
(b) original documents or copies of
original documents, |
being depositions so made, and documents or
copies so certified or authenticated, as the laws and administrative practices
of The Bahamas permit. |
(2) Regulations shall be made,
conferring such function on such persons as the regulations may specify, so
that full effect can be given to subsection (1). |
11.(1) The Minister shall establish and
maintain a committee, to be known as "the Tax Agreement Advisory
Committee" for the purpose of advising him on matters of policy in
connection with the performance of his functions under this Act. | Advisory Committee. |
(2) The Tax Agreement Advisory
Committee ("the Committee") shall consist of such persons (not fewer
than five in number), to be appointed by the Minister, as he thinks fit, but so
that not fewer than three of the Committees' members shall be persons appearing
to him to be knowledgeable about the matters dealt with in the Agreement. |
(3) The Minister shall appoint a
person to be the Committee's Chairman. |
(4) Subject to Article 3(2)
dealing with confidentiality, the Minister may refer to the Committee any
matter mentioned in subsection (1), and shall take into consideration any
advice that the Committee may tender on that matter. |
12. Nothing in this Act shall
exclude or restrict the right of any person aggrieved by the performance by the
Minister or any other person with any function under this Act to challenge the
performance of that function, in so far as it affects such person, either by
seeking review of a decision by the Supreme Court or by taking any other action
which is lawfully available. | Judicial review. |
13.(1) The Minister may make
regulations - | Regulations. |
(a) prescribing anything that is
required or permitted by this Act to be prescribed by regulations, or that the
Minister thinks is necessary to be prescribed for carrying out the provisions
of this Act; and |
(b) creating offences under this Act
and prescribing penalties for such offences not exceeding the penalties
prescribed under section 9. |
(2) The provisions of section 31
and 32 of the Interpretation and General Clauses Act shall not apply in
relation to any regulations made by the Minister under this Act but instead all
such regulations shall be subject to affirmative resolution of the House of
Assembly. | Ch. 2. |
(3) In subsection (2), the
expression "subject to affirmative resolution of the House of
Assembly" in relation to regulations means that any such regulations are
not to come into operation unless and until approved by a resolution of the
House of Assembly. |
14. This Act binds the Crown. | The Crown. |
(section 2) |
SCHEDULE |
AGREEMENT BETWEEN THE GOVERNMENT
OF THE COMMONWEALTH OF THE BAHAMAS AND THE GOVERNMENT OF THE UNITED STATES OF
AMERICA FOR THE PROVISION OF INFORMATION WITH RESPECT TO TAXES AND FOR OTHER
MATTERS |
WHEREAS The Bahamas has taken
significant steps in the international fight against money laundering and other
financial crimes, and the United States recognizes The Bahamas as a cooperating
country with respect to all relevant international efforts to counter money
laundering activities ; |
WHEREAS the United States has
recognized the efforts on the part of The Bahamas to ensure that the same
financial standards apply in The Bahamas as apply in other recognized
international financial centers ; |
WHEREAS, the Government of The
Bahamas and the Government of the United States (the "Contracting
Parties"), wish to enter into an agreement (the "Agreement") to
establish the terms and conditions governing the provision of information by
the Government of The Bahamas to the Government of the United States with
respect to certain taxes ; and |
WHEREAS the Contracting Parties
wish to enter into a form of agreement that allows United States taxpayers to
deduct expenses allocable to a convention, seminar or similar meeting held in
The Bahamas in the same manner and to the same degree that such a deduction
would be permitted if such meeting were held in the United States, |
NOW, THEREFORE, the Contracting Parties agree
as follows : |
ARTICLE 1 - DEFINITIONS |
1. In this Agreement, unless
otherwise defined: |
a) "civil matter" means an
examination, investigation or proceeding relating to United States federal tax
administration and enforcement with respect to conduct that does not constitute
a criminal tax offense under the laws of the United States; |
b) "Competent Authority"
means: |
(i) in the case of the United
States, the Secretary of the Treasury or his delegate; and |
(ii) in the case of The Bahamas, the
Minister of Finance or his delegate; |
c) "criminal matter" means
an examination, investigation or proceeding concerning conduct that constitutes
a criminal tax offense under the laws of the United States; |
d) "information" means any
fact or statement, in any form, that is foreseeably relevant or material to
United States federal tax administration and enforcement, including, but not
limited to, |
(i) testimony of an individual, and |
(ii) documents or records; |
e) "pending matter" means
an examination, investigation or proceeding under the federal tax laws of the
United States that is pending at the time the request under Article 2 is made,
and |
(i) in the case of a criminal
matter, relates to a taxable period commencing on or after January 1,
2004; or |
(ii) in the case of a civil matter,
relates to a taxable period commencing on or after January 1, 2006; |
f) "person" includes an
individual and a partnership, corporation, trust, estate, association or other
legal entity; |
g) "privileged
communication" means a communication that |
(i) is a confidential
communication, whether oral or written, passing between‑ |
(a) a counsel and attorney in his
or her professional capacity and another counsel and attorney in such
capacity; or |
(b) a counsel and attorney in his
or her professional capacity and his or her client, whether made directly or
indirectly through an agent of either; |
(ii) is communicated or given to a
counsel and attorney by, or by a representative of, a client of his or hers in
connection with the giving by the counsel and attorney of legal advice to the
client; |
(iii) is made or brought into existence for
the purpose of obtaining or giving legal advice or assistance; and |
(iv) is not made or brought into
existence for the purpose of committing or furthering the commission of some
illegal or wrongful act. |
h) "resident" means: |
(i) a citizen of the United States
or any person, other than a company, resident in the United States for the
purpose of United States tax; but in the case of a partnership, estate or
trust, only to the extent that the income derived by such partnership, estate
or trust is subject to United States tax as the income of a resident, either in
its hands or in the hands of its partners or beneficiaries; and: |
(ii) a company created under the
laws of the United States, any state or the District of Columbia. |
i) "tax" means all
federal taxes in the United States; |
j) for purposes of determining the
geographical area within which jurisdiction to compel production of information
may be exercised, |
(i) "United States" means
the United States of America, including Puerto Rico, the Virgin Islands, Guam
and any other United States possession or territory; |
(i) "The Bahamas" means
The Commonwealth of The Bahamas. |
ARTICLE 2 - PROVISION OF
INFORMATION WITH RESPECT TO UNITED STATES TAXES |
1. The Competent Authority of
the United States shall only make a request for information pursuant to this
Article when the Competent Authority of the United States is unable to obtain
the requested information by other means, having made all reasonable efforts to
do so. |
2. Upon receipt of a request
made in conformity with the provisions of this Article, the Competent Authority
of The Bahamas shall, subject to the provisions of paragraph 7 of this Article,
make all reasonable efforts to provide to the Competent Authority of the United
States information with respect to United States federal taxes. |
3. Any request for information
made by the Competent Authority of the United States pursuant to this Article
shall be made in connection with a pending matter of a United States taxpayer
and shall be framed with the greatest degree of specificity possible. In all
cases, such request shall specify in writing the following: |
a) the legal name of the person
about whom the request is made; |
b) the type of information
requested; |
c) the period of time with respect
to which the information is requested; |
d) the likely location of the
information; |
e) the matter under United States
federal tax law with respect to which the information is sought and whether
that matter is criminal or civil in nature; and |
f) the reasons for believing that
the information requested is foreseeably relevant or material to United States
federal tax administration and enforcement with respect to the person
identified in subparagraph a) of this paragraph. |
4. This Article shall not apply
to the extent that the requested information: |
a) relates to a matter under United
States federal tax law that is barred by the applicable statute of
limitations; or |
b) constitutes or would reveal a
privileged communication. |
5. Where the Competent Authority
of the United States requests information with respect to a matter which (i)
relates to a person not resident in the United States or (ii) does not
constitute a criminal matter, a senior official designated by the Secretary of
the Treasury of the United States shall certify that such request is
foreseeably relevant or material to the determination of the federal tax
liability of a taxpayer of the United States or the criminal liability of a
person under the federal tax laws of the United States. If information is
requested relating to persons not resident in the United States, it shall also
be established to the satisfaction of the Competent Authority of The Bahamas
that such information is foreseeably relevant or material to the administration
and enforcement of the federal tax laws of the United States. |
6. If specifically requested by
the Competent Authority of the United States, the Competent Authority of The
Bahamas shall provide information pursuant to this Article in specified forms
to be admissible in judicial or administrative proceedings in the United States
to the same extent that such specified forms can be obtained under the laws and
administrative practices of The Bahamas. The specified forms shall include
depositions of witnesses and authenticated copies of original documents,
including books, papers, statements, records, accounts, and writings. |
7. Nothing in this Agreement
shall be construed so as to impose on the Government of The Bahamas the
obligation to: |
a) carry out administrative measures
at variance with the laws and administrative practices of The Bahamas; |
b) supply particular items of
information which are not obtainable under the laws or in the normal course of
the administration of The Bahamas; |
c) supply information which would
disclose any trade, business, industrial, commercial or professional secret or
trade process; or |
d) supply information the disclosure
of which would, in the judgment of the Government of The Bahamas, be contrary
to national security or public policy in The Bahamas. |
8. Notwithstanding paragraph 7,
the Competent Authority of The Bahamas shall have the authority to obtain and
provide information held by financial institutions, nominees or persons acting
in an agency or a fiduciary capacity or information respecting ownership interests
in a person. |
9. In connection with a request
for information under this Article: |
a) a claim of privilege under the
laws of the United States shall be determined exclusively by the courts of the
United States; and |
b) a claim of privilege under the
laws of The Bahamas shall be determined exclusively by the courts of The
Bahamas. |
ARTICLE 3 – PROTECTION OF
INFORMATION |
WITH RESPECT TO UNITED STATES
FEDERAL TAXES |
1. Information provided to the
Competent Authority of the United States pursuant to this Agreement shall be
disclosed only to departments, agencies and judicial and administrative bodies
of the Government of the United States, and to employees and agents thereof,
involved in the - |
a) determination, assessment, and
collection of; and |
b) administration of, the recovery
and collection of claims derived from, the enforcement or prosecution in
respect of, or the determination of appeals in respect of; |
those United States federal taxes with respect
to which the relevant request was made pursuant to this Agreement, or the
oversight of the above. Such departments, agencies and judicial and
administrative bodies, and the employees and agents thereof, shall use such
information only for the purposes listed in this paragraph. Such departments,
agencies and judicial and administrative bodies, and the employees and agents
thereof, may disclose such information in connection with court proceedings
related to those federal taxes with respect to which the relevant request was
made pursuant to this Agreement. |
2. The Competent Authority of
The Bahamas shall treat any request for information received from the United
States pursuant to this Agreement as confidential and shall only disclose such
information as necessary to carry out its obligations under this Agreement.
Such requests may be disclosed in connection with court proceedings related to
the performance of the obligations of The Bahamas under this Agreement. |
3. Nothing in this Agreement
shall be construed to permit the Government of the United States to share
information received pursuant to this Agreement with an agency or employee of
any other government. |
4. Information that is provided
to the Government of the United States pursuant to this Agreement before
January 1, 2006 concerning a criminal matter shall not be used in connection
with any other matter without prior written consent of the Competent Authority
of The Bahamas. With respect to information that is provided to the Government
of the United States pursuant to this Agreement on or after January 1, 2006,
the Competent Authority of the United States shall provide prior written notice
to the Competent Authority of The Bahamas before using such information for a
type of United States federal tax matter other than the one for which it was requested. |
ARTICLE 4 – QUALIFIED
INTERMEDIARIES |
For the purposes of considering an
application by a person in The Bahamas to enter into a Qualified Intermediary
Withholding Agreement (within the meaning of Revenue Procedure 2000-12) with
the Internal Revenue Service of the United States, The Government of the United
States shall certify that The Commonwealth of The Bahamas has taken significant
steps towards achieving effective rules and/or procedures for providing tax
information to the United States of America for both civil tax administration
and criminal tax enforcement purposes, and the Internal Revenue Service of the
United States of America has determined The Bahamas' "know your
customer" rules to be acceptable within the meaning of Section 3 of Revenue
Procedure 2000-12. |
ARTICLE 5 – CONVENTION TAX
TREATMENT |
A United States taxpayer may
deduct from income costs incurred with respect to attendance at a conference or
convention held in The Bahamas in the same manner and to the same extent that
such taxpayer is permitted to deduct such costs with respect to attendance at a
conference or convention held in the United States. |
ARTICLE 6 – ADMINISTRATIVE
PROVISIONS |
1. The Competent Authorities of
the Contracting Parties shall enter into an agreement (the "Competent
Authority Agreement") regarding implementation of this Agreement. |
2. The Competent Authorities of
the Contracting Parties shall endeavor to resolve by mutual agreement any
disputes arising as to the interpretation or application of this Agreement. |
3. The Competent Authorities of
the Contracting Parties may communicate directly for the purposes of reaching
an agreement under this Article. |
4. The Government of the United
States shall reimburse the Government of The Bahamas for all direct costs
incurred in providing information pursuant to this Agreement as provided in the
Competent Authority Agreement. The Competent Authorities of the Contracting
Parties shall consult from time to time with a view to minimizing such costs. |
ARTICLE 7 - ENTRY INTO
FORCE ; |
EFFECTIVE DATE, MODIFICATION AND
TERMINATION |
1. This Agreement shall enter
into force upon an exchange of notes by the duly authorized representatives of
the Contracting Parties, confirming their agreement that both sides have met
the constitutional and statutory requirements necessary to effectuate this
Agreement. |
2. The provisions of Articles 2
and 3 shall take effect - |
a) on January 1, 2004 with respect
to requests for information made in connection with a criminal matter;
and |
b) on January 1, 2006 with respect
to requests for information made in connection with a civil matter. |
3. The provisions of Article 5
shall take effect on January 1, 2006. |
4. The provisions of this
Agreement, with the exception of those identified in paragraphs 2 and 3 of this
Article, shall take effect upon the entry into force of this Agreement. |
5. The effective date provisions
set forth in paragraph 2 of this Article are established in the expectation
that the United States will enter into arrangements with certain other
off-shore financial centers for the provision of information with respect to
taxes. If the United States has not entered into such arrangements by January
1, 2004, or if the United States, at any time, enters into such arrangements
that differ in material respect from the provisions of this Agreement, the
Government of The Bahamas and the Government of the United States shall hold
consultations concerning appropriate modifications to this Agreement. |
6. If, at any time after the
entry into force of this Agreement, the Organization for Economic Cooperation
and Development or other international organization develops a model agreement
on tax information exchange, a Contracting Party may propose modifications to
this Agreement for the purpose of bringing this Agreement into conformity with
the model agreement. Upon receipt of such a proposal, the other Contracting
Party shall enter into good faith negotiations concerning the proposal. |
7. This Agreement shall remain
in force until terminated by one of the Contracting Parties. Either Contracting
Party may terminate this Agreement at any time upon three months prior written
notice transmitted through diplomatic channels. |
IN WITNESS WHEREOF, the undersigned, being duly
authorized by their respective governments, have signed this Agreement. |
DONE at Washington, in duplicate,
this twenty-fifth day of January, 2002. |
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FOR THE GOVERNMENT
OF THE COMMONWEALTH
OF THE BAHAMAS :
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FOR THE GOVERNMENT
OF THE UNITED STATES
OF AMERICA :
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Sgd : William C. Allen
Minister of Finance
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Sgd : Paul A. O'Neill
Secretary of the Treasury
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