The main purpose of the CSME is to allow the free movement of goods, services, capital and CARICOM nationals and to regulate the treatment of economic enterprises within the Single Market.

CARICOM Heads of Government have recognised that the harmonisation of taxation is an important step in the achievement of the CSME as failure to do so is likely to result in barriers to the free movement of goods and capital.

The existence of the Treaty is clearly a step in the right direction towards tax harmonisation. However, in order to achieve real harmonisation, some measure of uniformity in the way in which taxable income is calculated as well as harmonisation of tax rates within the various Member States will be necessary.

The Intra-Regional Double Taxation Agreement replaced the 1973 tax Agreement which was previously concluded between the more developed countries ("MDC") within CARICOM, i.e. Barbados, Guyana, Jamaica and Trinidad and Tobago, and the less developed CARICOM countries ("LDC"), being Antigua, Belize, Dominica, Grenada, Montserrat, St. Lucia, St. Vincent and St. Kitts, Nevis and Anguilla.

It was hoped that the Treaty would be more successful in its implementation and effect than the LDC/MDC Treaty which was never formally ratified, or honoured, by all of the countries that were parties to it. In any event, the LDC/MDC Treaty was limited in its scope as it was designed only to try to stimulate international trade and investment between the MDCs and LDCs, and not among the MDCs themselves.

The Treaty was intended to encourage and facilitate trade and investment between residents of all Caricom member states who ratified the Agreement by removing the barriers which previously existed, mainly because of the high effective rate of tax levied on income derived from one Caricom territory by a resident of another.

CARICOM Nationals must be cognisant of the fact that they are subject to all applicable Tax Laws of their host country. It is therefore important to have knowledge about the types of taxes to be paid, before moving to work in another Member State.

The intra-regional Double Taxation Agreement protects self-employed CARICOM Nationals from paying taxes twice on the same earnings. This Agreement is currently enacted in Antigua and Barbuda, Barbados, Belize, Dominica, Guyana, Jamaica, Saint Lucia, St. Vincent and the Grenadines and Trinidad and Tobago.