TORONTO PAPER CALLS BARBADOS A TAX HAVEN.

A major Canadian newspaper, the Toronto GLobe & Mail, has labeled Barbados a major tax haven for Canadian companies because of its low capital gains tax regime, reports CANA (July 8, 1999). "Canadians had more than C$14.3 billion (US$9 billion) directly invested in the scenic nation of

Barbados last year -- a number that exceeded Canada's combined direct investment in Japan, Germany, Mexico and France," said the article. Twenty years ago, the paper said, Canadian direct investment into the country was so minimal it barely registered as statistically noteworthy. "Now only the United States and Britain draw more of our direct investment abroad." It noted that the capital gains tax rate in Barbados is a miniscule 2.5%, a fraction of the approximately 40% collected by Revenue Canada on capital gains earned there. The paper said that companies set up subsidiaries in Barbados because of tax savings. Gildan Activewear Inc., a Montreal-based clothing manufacturer, announced in February that it was creating a new international division to be based in Barbados, as well as a factory this fall.