More than 17,500 companies registered under CESRA to date

Noting that to date more than 17,500 entities have successful completed their reporting obligations under the Commercial Entities (Substance Requirements) Act, 2018 (CESRA), Minister of State for Finance Senator Kwasi Thompson yesterday urged businesses to take advantage of the month-long grace period to become CESRA compliant.

Companies were in a frenzy last week, stating that the December 31, 2020 deadline to register under the new act had caught them off guard because their focus had been on mitigating the COVID-19 pandemic.

It led to a system crash of the government’s registration portal last week, as thousands attempted to register before the deadline.

Those that did not comply faced penalties up to $15,000, before the government on Sunday announced a grace period to January 31.

The Ministry of Finance said although nearly 18,000 businesses have already applied, thousands more still have not.

“The government understands the challenges faced by some entities in complying and has made the decision to suspend late penalties until January 31 for entities that meet their reporting obligations before the end of the month. This follows an extension to the deadline from September 2020 to December that was granted last year,” the Ministry of Finance noted in a statement yesterday.

“To facilitate the demand, the Department of Inland Revenue (DIR) has allocated dedicated staff to process requests in the reporting portal. While some businesses have experienced delays, DIR is working around the clock to process requests.”

Addressing the confusion, Thompson said, “Many businesses continue to make good faith efforts to comply with the new regulations. We all know that COVID-19 has been very disruptive and this is the first reporting cycle for the new regulations.

“The deadline caught some companies off guard for various reasons and the government is working with stakeholders to facilitate compliance. We will continue to monitor the situation.”

CESRA – a critical tax cooperation law based on requirements by the European Union (EU) – was enacted in 2019 and requires companies operating under the Companies Act, International Business Companies Act, Partnership Act, Partnership Limited Liability Act and the Exempted Limited Partnership Act to register and demonstrate “economic substance”. They do this by having a physical premise, an adequate number of employees and an adequate level of expenditure.

Companies that are wholly owned by Bahamians are required to register under the act, but are not required to prove economic substance.

“Since April 2018, the Regulatory and International Affairs Unit of the Ministry of Finance has participated in training workshops and forums dedicated to CESRA requirements with the Bahamas Financial Services Board (BFSB), the Bahamas Bar Association, Bahamas Maritime Association, the Bahamas Chamber of Commerce and Employers’ Confederation and various financial institutions,” the ministry continued in its statement.

“Several public notices were also issued following the gazetting of the CESRA regulations in February 2019. The CESRA regulations were implemented to ensure all corporate vehicles and similar legal structures operating within The Bahamas are engaged in real economic activity.”

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source https://thenassauguardian.com/more-than-17500-companies-registered-under-cesra-to-date/