By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government believes it has "agreed the main part" of legislation to address Europe's tax demands with the private sector, and plans to bring the bill to Parliament on September 19.

KP Turnquest, pictured, deputy prime minister, told Tribune Business in a recent interview that the Minnis administration aims "to lay" the Commercial Entities (Substance Requirements) Bill 2018 in the House of Assembly when it resumes following its summer break.

He said the Government was in the last stages of consultation with the financial services industry, and seeking to handle the sector's final questions, as it strives to meet the tight timeline for passing and implementing the legislation.

Asserting that a recent briefing with the industry "went well", Mr Turnquest added that the Minnis administration was aiming to balance the need to escape the EU's threatened "blacklist" with the need to maintain a growth platform for financial services.

"There have been some subsequent questions that have arisen and we'll consider those," he told this newspaper. "Hopefully, we will have the final feedback shortly as we consult with the industry as well as the EU.

"We want to put forth a Bill that satisfies their [EU] requirements and all business considerations that exist. We're hoping to lay this Bill on the 19th [of September] when we get back to Parliament.

"There are some additional considerations that have been brought forth, and we have to reconcile those. For the most part we believe we have a good Bill and will see how it evolves in the next few days," Mr Turnquest continued.

"The reality is that this Bill has been out for consultation for a while. It's been back and forth between the sector Working Group and industry participants. We feel it's fairly close. There may be some tweaks here and there, but by and large we believe the main part of the Bill is agreed."

The Bill is designed to meet the 28-nation European Union's (EU) 'economic substance' and 'ring fencing' requirements, and enable the Bahamas to avoid being 'blacklisted' by the group come year-end.

The Commercial Entities (Substance Requirements) Bill is designed to address the EU's demand for all nations to impose 'economic substance' regimes that effectively require companies to have a physical presence - and do 'real business' - in a jurisdiction.

It wants corporate profits, revenues and assets to be taxed in the jurisdictions where they are generated. They are thus aiming to prevent companies, especially multinational corporations, from exploiting gaps in tax types, rates and rules to artificially shift profits from jurisdictions where they are generated to low or 'no tax' jurisdictions, thus lowering their tax bill.

The EU also wants the elimination of 'ring fencing', or preferential tax regimes for non-resident entities and foreign investors.

Mr Turnquest expressed confidence that the Bahamas will "be fully compliant and meet our obligations by December 31", thereby eliminating the threat of sanctions or penalties being imposed by the EU and its member states.

He reiterated his desire for the Bahamas to become "a thought leader" on financial services transparency and tax-related matters, and said the Government was seeking to work with other international financial centres (IFCs) to help maintain their collective competitiveness.

"The financial services industry continues to be a very significant contributor to GDP and the standard of living in this country, and we have to ensure we remain compliant with international standards, competitive and a reliable partner in the industry," Mr Turnquest told Tribune Business.

"We are not in this by ourselves. There are other financial centres that have similar challenges. Together, we have to figure out ways to develop standards that are globally transparent and compliant while remaining competitive. We continue to work with partners, locally and internationally, and governments to represent our case."

The Deputy Prime Minister added that the Bahamas' swift removal from the EU's 'blacklist' earlier this year was evidence that its "aggressive and proactive" approach was bearing fruit.

"I'm trying to get the industry, and certainly from a regulatory point of view, to move on to a more proactive position where we take leadership on these global issues," he added.

"There remain challenges in that regard because these developed countries have their own ideas and objectives they need to meet for their own tax point of view. As we try to be transparent and co-operative there's always some challenges along the way or some road blocks, but we continue to be proactive and aggressive. We'll meet every challenge that comes along and continue to be competitive."