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Bermuda, Cayman Welcome Recognition From EU In Blacklist

by Mike Godfrey, Lowtax.net, Washington
06 December, 2017

Both Bermuda and the Cayman Islands have welcomed EU member states' decision to not include them on a "black list" of non-cooperative territories for tax purposes.

Many offshore territories had been concerned in the run-up to the release of the list that it would arbitrarily feature many offshore territories simply on the basis that they facilitate disproportionately great capital flows for their relative size, in large part due to their benign tax regimes and streamlined regulatory frameworks, despite many of them being more quick and thorough in adopting international tax standards than many advanced country territories.

In fact, the black list featured many advanced nation states that feature higher rates of tax and some that have been slower to adopt tax transparency best standards. The 17 countries that feature in the "black list" agreed by EU finance ministers on December 5, 2017, are: American Samoa, Bahrain, Barbados, Grenada, Guam, Macao, the Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, South Korea, Trinidad and Tobago, Tunisia, and the United Arab Emirates. A further 47 countries have committed to address deficiencies in their tax systems and to meet the required criteria, following contacts with the EU.

Bermuda said that the list agreed by the EU's Economic and Financial Affairs Council on December 5 had reaffirmed Bermuda's status as a cooperative tax jurisdiction. David Burt, Premier of Bermuda, said: "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. The outcome of the Council's 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 and 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."

Meanwhile, Jude Scott, the CEO of Cayman Finance, the territory's financial services promotional agency, said: "Cayman Islands has not been included on the EU's list of non-cooperative tax jurisdictions. Cayman Finance has worked hard with the Cayman Islands Government to address the concerns the European Union has raised."

"We are at the forefront of regulatory and tax compliance and information exchange. The Cayman Islands meets or exceeds the highest global financial standards, sharing the same OECD rating as many EU member states. As an early adopter of international best practice in standards for transparency and cross-border cooperation, we will continue to work closely with our colleagues in tax and law enforcement authorities around the world. We are confident that we will be able to address the areas where the EU requires some further clarification."

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