Global Daily Tax News, Bahamas Extends Deadline For Economic Substance Filings, (Oct 16, 2023)

The Bahamas Ministry of Finance has announced an extension to the deadline for taxpayers to provide economic substance-related filings.

The reporting deadline had been October 13 and has been extended to October 31, 2023.

The reports are required under the Commercial Entities (Substance Requirements) Act, 2023, introduced by the territory in a bid to have the territory removed from the EU's list of non-cooperative territories.

In October 2022, the EU Council agreed to add Bahamas to the EU's list of non-cooperative jurisdictions for tax purposes, because the territory levies a zero or only nominal rate of corporate income tax and is attracting profits without real economic activity (criterion 2.2 of the EU list). The Bahamas was said to have failed to adequately address a number of recommendations of the OECD Forum on Harmful Tax Practices (FHTP) in connection to the enforcement of economic substance requirements, despite commitments made in early 2022. The territory was also challenged for failing to implement country-by-country reporting requirements.

The substance requirements dictate that certain companies are required to demonstrate that they have economic substance in the territory to gain access to its tax regime.