Belize’s International Business Companies (IBC) Regime Assessed as “Not Harmful (Amended)”
Belmopan, January 25, 2019. The Organisation for Economic Co-operation for Development’s (OECD) Forum on Harmful Tax Practices (FHTP) released the results of its recently concluded meeting held in Paris from 9-11 January 2019. The FHTP is the body mandated to monitor and review tax practices of jurisdictions around the world, focusing on the features of preferential tax regimes.
During the January meeting, the FHTP discussed and assessed the recently enacted changes to Belize’s International Business Companies Act and concluded, based on the amendments, that the regime was “Not Harmful (Amended)”. The Belize delegation to the January meeting comprised representatives from the Ministry of Finance, the International Financial Services Commission, and the Belize International Financial Services Association (BIFSA).
The OECD endorsed the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) in November 2015, and on 28 March 2017, Belize accepted the invitation of the OECD to participate in the BEPS initiative as an Associate and committed to implementing the comprehensive BEPS package, although noting that the timing of implementation may vary to reflect the level of development of countries and jurisdictions. The Action Points arising from the BEPS fall into 4 key minimum standards, and several other recommended standards that countries may implement voluntarily, but which are considered effective measures to combat base erosion and profit shifting. Part of this exercise concerned the existence of “harmful tax regimes” that create base erosion and profit shifting. The OECD’s recommendations within Action 5 – Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, set out the basis by which the FHTP evaluates and monitors the existence of harmful tax regimes. Implementation of the four minimum standards allows countries to protect their tax bases.