Bahamas: Economic substance legislation and guidance notes introduced
Bahamas introduced economic substance legislation and guidance notes, applicable to certain geographically mobile income sectors
Economic substance legislation and guidance notes introduced
The Bahamas introduced economic substance legislation and guidance notes, applicable to certain geographically mobile income sectors such as:
- Banking, insurance and fund management
- Shipping, distribution and service center businesses
- Finance and leasing
- “Headquartering” entities, holding companies and intellectual property (IP) entities
Under the new rules, businesses need, on an annual basis, to:
- Determine whether they are in scope of the economic substance requirements
- Undertake classification exercises to determine whether they perform any “relevant activities” in a given financial period
- For those entities that perform one or more relevant activities, undertake gap analyses on how they comply with the economic substance test and take action to fill any gaps identified
- Confirm that an appropriate economic substance risk operating model exists within the organization, e.g., policies and procedures, documentation, and training
- Collate information/data internally and from outsourcing providers
- Report to the relevant authorities
- Retain documentation
Read an April 2023 report prepared by the KPMG member firm in the Bahamas
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