Bermuda

Poland removes Bermuda from ‘blacklist’


By added on 23/06/2015

A controversial Euro list of dodgy tax jurisdictions that included Bermuda has been dealt a blow after Poland said the Island should not have been included on its submission, reports the Royal Gazette.

The move came after the European Commission unveiled the 30-jurisdiction ‘blacklist’ of non-cooperative tax jurisdictions singled out by member states.

Poland was one of 11 EU countries that the EC used as its criterion to put Bermuda on the ‘blacklist’. The threshold for inclusion was ten countries.

But now the Polish Embassy in London has confirmed that Bermuda is no longer in the eastern European nation’s bad books.

Poland signed a tax information exchange agreement with Bermuda which came into effect in March this year.

And Italy — one of the 11 countries that named Bermuda in their EC submission, but which signed at tax information treaty with the Island in 2013 — announced earlier this year that it had taken Bermuda off its national blacklist.

Bermuda has also signed the Multilateral Convention on Mutual Administrative Assistance on Tax Matters, a multilateral TIEA that includes Poland.

As an “early adopter” country, Bermuda also signed another agreement, the Multilateral Competent Authority Agreement, in Berlin in October 2014 for Organisation for Economic Cooperation and Development (OECD) automatic exchange of information on the common reporting standard (CRS) in which Poland is a participant.

This means that Bermuda currently has three international agreements with Poland for the exchange of information for tax purposes.

Finance Minister Bob Richards launched a blistering attack on the “unjustified and baseless” blacklist.

Mr Richards said Bermuda had signed a large number of tax information exchange agreements around the world and has 80 treaty partners through the Multilateral Tax Convention, an international tax information exchange agreement.

The 80 countries include all the G20 group of industrialised nations, all the Organisation for Economic Cooperation and Development (OECD) countries except one and all EU countries except two because they have yet to sign up to the multilateral convention.

Mr Richards said: “A closer scrutiny of this latest development reveals something wrong with this process.

“To be included on this new ‘uncooperative’ one would have to be ‘blacklisted’ by ten or more EU member states — not nine, eight, seven or six. Why they used ten speaks to a lack of transparency.”

He added: “Bermuda prides itself on being a highly cooperative business centre and has gone the extra mile to be ahead of the curve in this respect.”

Mr Richards was backed by Bermuda Business Development Agency (BDA) CEO Ross Webber, who blamed ignorance of the Island’s economy and “an imbalanced process.”

The Cayman Islands also hit back after it was included on the list after being named by 11 EU member nations.

Cayman Finance said it was “disappointed” to be included — especially as it based on the views of 11 EU countries it does little business with.

A Cayman Finance statement said: “It is not clear what standards have been used by these 11 countries to come to such a conclusion, in particular when the Cayman Islands has exchange of information agreements in place with all but one of these countries.” The statement added: “We are confident that if these 11 EU countries transparently and objectively evaluate the Cayman Islands’ robust international tax cooperation regime against global standards that the Cayman Islands will promptly be removed from this non-compliant list.”

Guernsey in the Channel Islands reacted to its inclusion with “astonishment.” Neighbouring Jersey, however, is not on the list.

A statement said the Crown Dependency had appeared on only nine countries’ blacklists and had been included because the neighbouring island of Sark, for which it has no legal responsibility on tax matters, appeared on the blacklist of another EU nation.

Guernsey was backed by Alex Cobham, head of research at the UK-based Tax Justice Network — a long-time critic of so-called tax havens, including Bermuda.

Mr Cobham said that there was no logic to the list and said Guernsey had “long led Jersey in its efforts to be transparent”.

The tiny European state of Liechtenstein said the principality had also been an early adopter of new rules on automatic tax information exchange — the new global standard and said its inclusion on the list was “completely unfounded and unjustified.”