Bermuda Seeks Greater Say In Int'l Tax Policy Talks
by Mike Godfrey, Lowtax.net, Washington
14 January, 2019
The Bermuda Government has set out its plans to more actively engage in discussions on tax policy internationally, including newly establishing offices in Brussels and Washington DC.
"Promoting economic growth here at home requires us to safeguard Bermuda's interests overseas," said Bermuda's Premier, David Burt. "In 2018, much of our attention and resources had to be diverted to deal with the assessment of Bermuda's anti-money laundering and anti-terrorist financing regime by the Caribbean Financial Action Taskforce (CFATF) and later in the year, to address the issues of economic substance requirements imposed by the EU. With much of that work done and now that the balance of power has shifted in Washington DC, we will take this opportunity to renew our efforts to staff-up the DC Office."
On the territory's UK office, he said: "The London Office and its team of experts have been invaluable since opening. Our constitutional arrangement demands close links with the UK and it is critical that we have firsthand knowledge of the workings of Westminster. With Brexit looming for the UK, the London Office has kept us, here at home, fully briefed and strongly advocated for Bermuda to address any impact the UK's exit from the EU might have."
On the launch of an office in Brussels, he said: "The need for direct interaction with the EU has been shown in the months of work that led to the adoption of the Economic Substance Act 2018. Like other jurisdictions, Bermuda has become an international target of European, localized politics. This threat can and will be met by direct engagement in Brussels on behalf of the Government of Bermuda. I am pleased to confirm that an office location has been identified. Before the end of this month, we will have established a presence in Brussels."
"To ensure we have the ability to create the conditions for continued economic growth here at home; to deliver on our promise to lift up people in need of help; and to create opportunities for young people investing in education here and abroad, the Government is determined to lead the management of our international relationships to the benefit of the people of Bermuda. Our investment in these global activities is designed to promote our interests abroad while safeguarding our future here at home," he concluded.
In December 2018, Bermuda adopted the Economic Substance Act 2018, and the Economic Substance Regulations 2018, introducing new requirements on firms engaged in certain activities to demonstrate economic substance in order to access Bermuda's tax regime. The changes mirror those added also by the Crown Dependencies – Jersey, Guernsey, and the Isle of Man – based on talks between the territories and the EU's Code of Conduct Group.
The affected activities are: banking, insurance, fund management, financing and leasing, shipping, intellectual property, collective investment vehicles, and holding companies that generate income from any of these key activities. Bermuda-based firms engaged in these activities will need to demonstrate they have adequate levels of employees as well as annual expenditure and physical offices.
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