Bahamas Information Services Updates
Bahamas, New Zealand sign TIEA
By Khyle Quincy Parker
Nov 19, 2009 - 2:37:14 PM

Bahamas Ambassador CA Smith (l) and New Zealand Ambassador Roy Ferguson exchange copies of the newly signed Tax Information Exchange Agreement (TIEA) inked on Wednesday. The signing marked the fifth such Agreement signed by The Bahamas. (Photo: K. Quincy Parker)

The Bahamas signed a Tax Information Exchange Agreement (TIEA) with New Zealand on Wednesday afternoon, concluding a negotiation process aimed at developing a legal instrument that could be used to establish effective exchange of tax information. 

The TIEA is an instrument developed by a Working Group of the Organization for Economic Cooperation and Development (OECD), and represents the standard of effective exchange of information for the purposes of the OECD’s initiative on harmful tax practices.  

New Zealand Ambassador to the US Roy Ferguson said at the signing that his country’s government was “delighted” to sign the TIEA with The Bahamas. Ambassador Ferguson offered congratulations on what he said his government saw as the “forward-looking steps” being taken by The Bahamas with respect to tax information exchange matters.  

He also noted that New Zealand pledged continued cooperation with The Bahamas on tax matters.  

Bahamas Ambassador Cornelius A Smith thanked the New Zealand ambassador for the speed with which the negotiations for the TIEA had been concluded.  

“The signing of this agreement between the Commonwealth of The Bahamas and New Zealand for the exchange of Information with respect to taxes bears witness to the Government of The Bahamas’ commitment to implement the evolving international standards of transparency and effective information exchange in tax matters,” Ambassador Smith said.  

“It is the fifth tax information exchange agreement concluded by the Government of The Bahamas and the third it has concluded with an OECD country.”     

“As The Bahamas and New Zealand adjust to the ever-changing global financial and economic landscape,” he added, “we look forward to a productive and cooperative relationship with New Zealand in this and other areas.”  

The first TIEA signed by The Bahamas was with the United States in 2002, and since then the country has concluded TIEAs with the UK, Monaco, San Marino and now New Zealand.  

There are 15 articles in the TIEA, covering areas such as definitions, which taxes are covered by the agreement, and the possibility of declining a request for tax information.  

Under Article Seven of the TIEA, for example, the parties agree that the Requested Party not be required to obtain or provide information that the Applicant Party would not be able to obtain under its own laws for purposes of the administration or enforcement of its own tax laws.   

“The competent authority of the Requested Party may decline to assist where the request is not made in conformity with this Agreement,” the article says.  

Article Seven also imposes protections on trade, business, industrial, commercial or professional secret or trade processes, and allows the parties to decline a request for information if the disclosure of the information would be contrary to national security or public policy.  

Article Nine of the agreement protects citizens in both countries from "prejudicial or restrictive measures based on harmful tax practices.”  

Prejudicial or restrictive measures are defined in the TIEA as measures applied by one Contracting Party to residents, nationals or transactions of either Contracting Party on the basis that the other Contracting Party does not engage in effective exchange of information and/or because it lacks transparency in the operation of its laws, regulations or administrative practices, or on the basis of no or nominal taxes and one of the preceding criteria.