01/03/22

BERMUDA: Leaders say jurisdiction committed to tax standards, ahead of Annex II removal.

As published on reinsurancene.ws, Tuesday 1 March, 2022.

Industry leaders representing market bodies in Bermuda have maintained that the country remains committed to cooperation and compliance with global tax standards, ahead of Bermuda’s expected removal from Annex II.

The European Union (EU)’s Annex II state of play document includes jurisdictions that do not yet comply with all international tax standards but have committed to reform.

Bermuda has now fulfilled all its commitments related to the required exchanges of information recommended by the Organisation for Economic Cooperation and Development (OECD) Forum for Harmful Tax Practices (FHTP).

The expectation among financial and insurance heads is that the OECD FHTP will remove the relevant recommendation at its next meeting in April, after which Bermuda should be removed from Annex II at the next EU Economic and Financial Affairs Council (ECOFIN) meeting in October.

Although inclusion on Annex II has no penalty consequences, nor does it trigger any EU measures unlike Annex I, the BDA looks forward to being removed at the next meeting.

“Bermuda prides itself on being a blue-chip financial services jurisdiction, particularly around global (re)insurance, and is committed to cooperation and compliance in global tax standards,” said BDA CEO David Hart.

“Bermuda is an active contributor to the EU, and is a global leader in regulation and technical compliance,” he added.

John Huff, CEO of Association of Bermuda Insurers & Reinsurers (ABIR) also commented: “Bermuda’s leading insurers and reinsurers support the priority of people and processes to fulfill international commitments on governance and transparency and anticipate international recognition of Bermuda’s progress.”

Richard Winchell, Executive Director, Association of Bermuda International Companies (ABIC), further stated: “We are very disappointed to see that the EU Code of Conduct group has placed Bermuda on Annex II. Bermuda is an internationally preferred domicile, our companies meet and exceed economic substance measures, we are a world leader in AML/ATF scoring and we are committed to transparency.”

Martin Laframboise, Executive Director, Bermuda International Long-Term Insurers and Reinsurers (BILTIR), said: “Bermuda’s life sector has experienced healthy growth in recent years, thanks to the island’s strong regulatory environment that protect our cedants and policyholders.”

“Bermuda has been consistently recognised for its transparency and adherence to global tax reporting, AML/ATF, and economic substance compliance requirements. BILTIR fully supports the actions of the Bermuda Government in addressing the FHTP recommendations. We anticipate a positive response from the FHTP, as Bermuda continues to cooperate with the Code of Conduct Group and comply with the EU’s tax governance criteria.”