**Information Exchange**

The United States and Antigua and Barbuda have exchanged diplomatic notes that bring into force the agreement for exchange of information with respect to taxes between the two countries. The Agreement was signed in Washington, DC, on December 6, 2001 to be entered into force as of February 10, 2003. It is effective as of that date.

A release from US Treasury today announced the exchange of notes and further said the Agreement satisfies the criteria set forth in the Caribbean Basin Economic Recovery Act of 1983. In this connection, it is consistent with the standards for an exchange of information agreement as outlined in the United States Internal Revenue Code of 1986, as amended *(relating to deductions for attendance at foreign conventions)*.

Treasury says that Antigua and Barbuda therefore is now considered part of the *”North American area”* for purposes of determining whether U.S. taxpayers may deduct expenses incurred in attending conventions, business meetings and seminars there. Convention expenses incurred by U.S. taxpayers for meetings in Antigua and Barbuda that otherwise are deductible as ordinary and necessary business expenses will be allowed without regard to the additional limitations applicable to foreign convention deductions.

In January 2002, The Bahamas signed an agreement with the United States for *”the provision of information with respect to taxes and for other matters”* between the two Governments. Under the agreement The Bahamas has committed to exchange information relating to criminal tax offenses for taxable years beginning January 1, 2004, with similar arrangements slated to begin with respect to civil tax offenses under United States Federal tax laws for taxable years which begin on January 1, 2006. Information obtained through this Agreement cannot be shared with other countries and, in addition to the burden to prove wrong-doing, strong anti-fishing provisions are an integral part of the agreement.

An equivalency provision in the Agreement signed by The Bahamas allows consultations between the two Governments — with appropriate modifications — should the U.S. enter other arrangements that differ in “material aspect”. That is, it guards The Bahamas from becoming disadvantaged vis a vis competing jurisdictions.

In addition to facilitating U.S. certification of The Bahamas for Qualified Intermediary (QI) status, the Agreement includes Convention Tax Benefits as applied in Antigua and Barbuda.

The Agreement will come into effect when the U.S. and The Bahamas have exchanged diplomatic notes confirming that the necessary constitutional and statutory requirements have been met.