Tax Transparency Arrives in Barbados17th February 2022
Those revealing country-by-country reports may not be very popular with taxpayers, but they’re gaining popularity with tax authorities. Take Barbados, for example. The island nation has yet to introduce transfer pricing documentation legislation—but on December 31, 2021, the government enacted a law requiring companies to submit country-by-country reports (CBCR). The robust report is full of financial data and lists how much tax companies pay in individual jurisdictions. While it doesn’t tell the whole transfer pricing story—you’d need to enlist the master and local files for that—the report is relatively easy to analyze and given that it’s shared between jurisdictions, it helps to spot companies in high-risk tax positions. Beginning this year, ultimate parent entities of multinational groups with a consolidated group revenue of $850,000,000, with tax residents in Barbados must file the report or be subject to penalties. Like the reporting threshold, the deadline aligns with OECD guidance—within 12 months after the last day of reporting fiscal year. The legislation also requires companies to keep the reports on hand for at least five years. In fact, the only question the new law doesn’t seem to answer is: Will there be more transfer pricing rules to come?