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13.4. Transfer Pricing

There is no Transfer Pricing legislation in the Bahamas.

Country-by-Country Reporting

The Bahamas has introduced the Country-by-Country (CbC) reporting requirements by Multinational Entities Financial Report Act 2018.

The CbC reporting requirements are applicable for fiscal years beginning on or after 1 January 2018 for MNE groups having consolidated group revenue exceeding USD 850 million in the preceding fiscal year.

The CbC report submission requirements are applicable to ultimate parent entities resident in the Bahamas and surrogate parent entities. Certain designated surrogate parent entities and constituent entities that are resident in the Bahamas are required to file the CbC report if one of the following conditions are met:

  • The ultimate parent entity is not required to submit a CbC report in its jurisdiction of tax residence; or
  • The jurisdiction where the ultimate parent entity is a resident has a current international agreement with the Bahamas but does not have a qualifying competent authority agreement in effect to which the Bahamas is a party on the due date of filing the report; or
  • There has been a systemic failure for exchange by the ultimate parent's jurisdiction.

A surrogate parent entity is not required to file a CbC report if such entity is designated to file a CbC report in another jurisdiction and certain conditions are met, including that the report will be exchanged with the Bahamas and proper notification to the tax authorities has been made.

Constituent entities resident in the Bahamas is required to submit a notification on whether they are the ultimate or surrogate parent entity by the last day of the reporting fiscal year, or if neither, must provide notification on the identity and residence of the reporting entity by the same deadline. For the 2018 reporting fiscal year, an extension is provided for the submission of the notification up to 31 May 2019.

All the entities are required to notify and file the CbC report electronically.

The deadline for submitting CbC reports is 12 months after the end of the reporting fiscal year and upon filing the CbC report, the authority may also seek certain additional information which is required to be submitted within the timeline prescribed by the authority. In case of any information that has to be gathered from outside of the Bahamas, the same has to be informed and the authority shall prescribe the timeline accordingly.

Failure to comply with the CbC obligations and providing required information may attract administrative penalties up to USD 5,000 and fines up to USD 10,000 along with imprisonment may be imposed on summary conviction.