TRINIDAD and Tobago might be taken off the European Union’s blacklist after the second round of the EU’s peer review, which started on June 28 and is expected to finish next month with a site visit.
Wade George, executive chairman of Ernst and Young (EY) Caribbean, mentioned this at the Trinidad and Tobago Chamber of Industry and Commerce’s discussion on “Private Sector Opportunities in the New Special Economic Zone” at its conference hall at Columbus Circle, Westmoorings on Thursday. George stated, “We have been on that list since 2017 and based on the most recent report in February, we remained there. We haven’t put on a framework to address the issue of common reporting standards.”
The EU blacklist was created to increase transparency, have fair tax competition and prevent measures against base erosion and profit shifting (anti-BEPS measures) to fight tax evasion and avoidance.
George mentioned that Trinidad does not have a common reporting standards framework and has not been rated as “largely compliant” by the Global Forum for information exchange. Additionally, T&T has not signed or ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and has not established the necessary legal and administrative frameworks for country-by-country reporting minimum standards. Previously, T&T operated under the Free Zones Act, but it was repealed after the full proclamation of SEZ in 2022. George explained that the Free Zones Act posed challenges such as a ring-fenced regime to protect banks’ core retail function, minimal reporting requirements, discretionary authority elements, and full tax exemptions.
George said additionally, the act lacked a sunset clause, which would allow for termination of contracts if certain conditions weren’t met by a specified date.
We have been on the list for quite some time now, but there’s hope that we will be removed from it by the end of October. In recent months, several legislative measures have been put in place to increase transparency.
If all goes well, we might move from the blacklist to the grey list, which means we’ll still be monitored but won’t face the severe penalties associated with being on the blacklist. The potential consequences of being on the blacklist include damage to our reputation, the termination of double taxation agreements, penal tax implications, loss of investment, restricted access to EU funding, difficulties in financial transactions, and reduced economic growth.
Minister of Finance Colm Imbert presented a bill to modify several acts, including the Prevention of Corruption Act, the Proceeds of Crime Act, the Anti-Terrorism Act, the National Insurance Act, and the Financial Intelligence Unit of Trinidad and Tobago Act.
Speaking about the SEZ regime, which differs significantly from the Free Zone Act, Kiran Maharaj, president of the T&T Chamber of Industry and Commerce, mentioned, “This is intended to be a tool for our economic development and growth, a place where businesses can innovate, expand and thrive without the usual bureaucratic and financial constraints. SEZ has the potential to attract much-needed foreign direct investment, and there is opportunity for new partnerships and joint ventures.”
