The region’s laws have evolved to meet the region’s very particular needs and have created a distinctive legal landscape. Within the so-called “developed” world, the evolution of tax law lies almost exclusively in the hands of the legislative drafter. These laws are subject to relatively frequent amendments in an effort to keep them current. Within the region, however, the statutory law does not evolve as frequently. The incremental evolution of the law comes about with each decided case. Like Dr. Frankenstein crafting his wonderful new creature, each case becomes the sinew, flesh and organs that both create and give life to the legislation.
To persons outside the region, the Caribbean is often seen as one entity, a chain of homogenous islands dangling from America’s impossibly slender waist. It’s a view of the region that is obviously charming but it belies the distinctive differences amongst the individual islands, differences that become achingly apparent when non-nationals are facing the challenge of conducting business here.
Attorneys who are foreign to the region, who nonetheless have transactions to conduct within it, often find the legal systems hard to negotiate. These systems, specifically, the civil and common law, evolved from the territory’s colonization experiences and the jurisprudence of each island is a reflection of its individual history.
Amongst the English speaking islands, the common law system predominates. For attorneys who do not come from a Commonwealth background, this means that they often lose their footing as they seek to make their way along the various paths necessary to attaining their goals. In fact, working within the Caribbean often proves challenging even for attorneys who are from the Commonwealth, since the evolution of the region’s law is quite singular.
Attorneys from North America will find that having a similar common law tradition does not make things any easier. While some similarities are to be found – both the US and the Caribbean territories have written constitutions, the company law acts of several of the islands have borrowed heavily from that of Canada – the systems are significantly different.
“[T]he region’s tax laws are not static and their development is not left in the hands of the drafter who is removed from the reality of what he is being asked to create. Instead, tax legislation in the region is very much a living thing that can be said to operate almost in real time and the effective tax practitioner must constantly grow and advance to meet the region’s very particular needs.”
The common law within the region consists of both statute and judge made law. Statute is laid before the Parliament and voted upon while judge made law is based on judicial precedent. The final court of appeal is able to overrule previous decisions of the lower court if it is felt that an injustice has previously occurred and/or continues to occur. This is only in exceptional cases as judge made law places great value on the principle of certainty in the law and the overruling of prior decisions arguably goes against this. As elsewhere in the Commonwealth, legislation can change the common law and it supersedes precedent. Again, great care is taken to ensure this only occurs where necessary, for the purpose of ensuring certainty in the law.
The region’s laws have evolved to meet the region’s very particular needs and have created a distinctive legal landscape. These unique differences are quite apparent in the area of tax law. Within the so-called “developed” world, the evolution of tax law lies almost exclusively in the hands of the legislative drafter. These laws are subject to relatively frequent amendments in an effort to keep them current; when a lacuna in the law appears, or, a new legal need arises, the existing legislation is immediately reviewed and revised to address it.
Within the region, however, statutes that regulate tax law and practice are primarily seen as mere framework. The evolution of the law itself however, comes about with each decided case. Like Dr. Frankenstein crafting his wonderful new creature, each case becomes the sinew, flesh and organs that both create and give life to the legislation.
“Like Dr. Frankenstein crafting his wonderful new creature, each case becomes the sinew, flesh and organs that both create and give life to the legislation.“
The arguing of a tax matter before the courts, therefore, depends on the attorney’s understanding not only of Parliament’s purpose in passing the requisite law but also functions to aid in both the interpretation and application of that law. Each decision from the judges creates legal precedent, forming and shaping the body of law over time.
The law is also significantly affected by the jurisprudence resulting from the CARICOM and OECS political organisations and the various international treaties the individual islands have signed. For example, trade and other economic considerations for individual CARICOM members are ruled significantly by the various CARICOM agreements and each member state enjoys preferred status to non-member states. CARICOM’s influence on regional jurisprudence continues to expand through the decisions of the Caribbean Court of Justice (CCJ) as it interprets the parameters of the agreed treaties. In addition to the aforementioned, each island is signatory to a number of international law treaties. In the civil law systems of St. Lucia and Suriname, these become binding upon signature. However, in the common law the treaties are ratified but are typically not binding, the exception being customary international law. Nonetheless, they have great influence on the domestic law of the individual islands,
Therefore, whenever a new judgment in a tax matter is laid down by the courts, it is reflective not only of the norms particular to the Caribbean at that time, but it also reflects the persuasive authority of both regional and international jurisprudence. It is based on the premise that the judge in the courtroom is best suited to the development of the law, assisted by attorneys as they plead their cases before them.
Perhaps the most important thing for a foreign attorney to realise is this: the region’s tax laws are not static and their development is not left in the hands of the drafter who is removed from the reality of what he is being asked to create. Instead, tax legislation in the region is very much a living thing that can be said to operate almost in real time and the effective tax practitioner must constantly grow and advance to meet the region’s very particular needs.
CAVEAT
This note is published by www.caribbean-tax.com on July 9, 2016 for discussion purposes only. Should you require legal advice, please contact us and we shall be happy to make a referral to a local tax practitioner.
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