The European Union has excluded Bermuda from a 'blacklist' of countries that it claims are not doing enough to crack down on offshore avoidance schemes.
A list of such countries has been drafted by the European Council’s Code of Conduct (COC), a group of finance ministers from EU member states.
Blacklisted countries include American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates.
The list had excluded a number of British Overseas Territories including Bermuda and the Cayman Islands. They had both previously been included on a 2015 list which was subsequently scrapped following a row over its methodology.
However, Bermuda and Cayman were referenced in the report as being committed to addressing concerns relating to economic substance – where offshore structures may be used to attract profits without real economic activity – by 2018.
The Premier of Bermuda, the Hon David Burt, has since welcomed this decision, affirming Bermuda's status as a cooperative tax jurisdiction.
“Once again the EU has recognized Bermuda’s status as a cooperative jurisdiction, despite the interest surrounding a hack on a global law firm and related documents in the public domain," he said.
“The outcome of the ECOFIN decision demonstrates Bermuda’s position as a global leader in international tax transparency. Bermuda is not a place to hide money, given its Common Reporting Standard and Country by Country automatic reporting regimes and membership in the OECD Inclusive Framework on Base Erosion & Profit Shifting.
“Any legitimate tax authority can request and receive information from Bermuda, under 100-plus tax-transparency relationships pursuant to the OECD multilateral tax treaty, and more than 40 bilateral Tax Information Exchange Agreements.
“Bermuda welcomes continued dialogue with the EU Code of Conduct Group and EU Member States.”
Bermuda, Captives, European Union, David Burt, Tax