Since 1998, the Organisation for Economic Cooperation and Development ("OECD") has led a charge against "harmful tax practices", with a primary emphasis on the promotion of the exchange of information on economic matters, including financial and tax matters. In affirming its commitment to improving cross-border cooperation, the government of The Bahamas on 4 August 2011 signed a Tax Information Exchange Agreement ("TIEA") with the Republic of Korea ("The Bahamas- Korea TIEA"). This brings the amount of TIEAs to which the Bahamas is party to twenty-five (25). The Bahamas-Korea TIEA marks The Bahamas' fourth with a major Asian economy, with the first three being the Republic of China, India, and Japan.
The Bahamas now has TIEAs with eighteen (18) OECD member countries (i.e. Finland, Denmark, Sweden, Belgium, New Zealand, Iceland, Norway, Germany, the United States, the United Kingdom, Canada, the Republic of China, Japan, Australia, Argentina, France, Mexico, and Korea) and ten (10) with members of the G-20 (i.e. the United States, the United Kingdom, Canada, the Republic of China, Japan, Australia, Argentina, France, Mexico, and Korea).
The Bahamas-Korea TIEA applies to existing taxes of every kind and description imposed on behalf of either country. It does not apply to taxes imposes by states, municipalities, or other political subdivisions or possessions of the Republic of Korea. Nonetheless The Bahamas-Korea TIEA is not an automatic information exchange between the two, and like other TIEAs entered into by The Bahamas, is by request only. Information will never be exchanged aimlessly or arbitrarily. Specific guidelines and criteria by which Korea must submit a request for information to the Bahamas are provided for in the TIEA. These guidelines and criteria provide expressly that all requests must be validly made and relevant to the matter at hand. All requests must be set forth with specificity, detailing the nature of the information being requested and the substance of the evidence to support the request.
The signing ceremony took place in Washington, DC with Ambassador CA Smith, United States Ambassador for The Bahamas to the United States, and Ambassador Duck-soo Han, Ambassador for the Republic of Korea to the United States and The Bahamas. By signing the TIEA, the government of The Bahamas has shown its willingness to meet evolving OECD standards with respect to transparency of tax affairs and the exchange of information.
TIEAs are also expected to be signed between The Bahamas and Aruba and The Bahamas and the States of Guernsey.
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