The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Ministry of Finance yesterday said it has extended the 2022 substance reporting deadline for qualifying companies until end-October due to the “high volume of requests” for extra time.

The ministry, in a statement, said it had agreed to extend the deadline for companies, their attorneys and registered agents to comply with the Commercial Entities (Substance Requirements) Act, known as CESRA, and filings for 2022. Alleged deficiencies in commercial substance reporting resulted in The Bahamas being blacklisted by the European Union (EU), and this nation had hoped to escape and be de-listed during this month’s review.

“The Ministry of Finance wishes to advise the public that as a result of a high volume of requests from entities for an extension to the reporting deadline for Commercial Entities (Substance Requirements) Act 2023 (CESRA) reporting, after much consideration, it has been decided to allow a further extension to the reporting deadline for the 2022 reporting year,” the Ministry of Finance said.

“The extension is for an additional 18 days from October 13, 2023, to October 31, 2023.” The Commercial Entities (Substance Requirements) Act 2023 came into force on September 1, and the new economic substance reporting portal was launched on September 8.

The law now requires registered agents to report on behalf of the entities they manage, while entities without a registered agent are required to provide the information to the Compliance Commission which will act as the reporting agent to the Competent Authority.

The previous economic substance reporting portal operated through the Department of Inland Revenue framework and was decommissioned on September 1, 2023. Registered agents were encouraged to report on the new portal and given a two-week extension to comply from September 30 to October 13.

The Bahamas was added to the EU’s list of tax non-cooperative jurisdictions in November 2022, citing concerns that the country, which has a zero or only nominal rate of corporate income tax, is attracting profits without real economic activity and that it failed to adequately address a number of recommendations of the OECD Forum on Harmful Tax Practices (FHTP) in connection with the enforcement of economic substance requirements.

Ryan Pinder KC, the attorney general, subsequently said the Government contracted BDO, the company that developed the beneficial ownership reporting system (BOSS), to build the new economic substance reporting platform.

He said: “As you might know, the former government put the substance reporting through the Department of Inland Revenue framework. This method was ineffective and presented many problems with the actual administration of the reporting.

“We solicited proposals for a separate substance reporting portal and platform that has been designed for the specific purpose, much like what you experience with the BOSS system and beneficial ownership reporting.

“Our government has retained the firm BDO to develop the reporting platform. BDO is the firm who built our reporting platform for beneficial ownership, the BOSS system. This should instil confidence as the BOSS system has been very effective.”