03/05/22

BERMUDA: Jurisdiction to be removed from EU grey list in October.

As published on royalgazette.com, Tuesday 3 May, 2022.

Bermuda expects to be be taken off an international taxation grey list by October after being assured it is now fully compliant with its requirements.

The Ministry announced today that the Organisation for Economic Cooperation and Development had confirmed at a meeting last month that it now met with the requirements of its Forum for Harmful Tax Practices.

However, Bermuda will remain on a European Union “grey list“ of jurisdictions until an October FHTP meeting, Government said.

The FHTP issued Bermuda with an urgent recommendation last November to initiate certain exchanges of information relating to economic substance.

These exchanges were completed in December 2021, fulfilling the recommendation well in advance of its April 2022 deadline.

As a result of the November warning, Bermuda was also placed on an EU list of non-cooperative jurisdictions for tax purposes.

The EU says the aim of the blacklist, or list of noncooperative jurisdictions, which is published as Annex I to conclusions adopted by their Economic and Financial Affairs Council, is not to name and shame countries, but to encourage positive change in their tax legislation and practices, through co-operation.

Jurisdictions that do not yet comply with all international tax standards but have committed to implementing reforms are included in a state of play document, Annex II, which is also known as the grey list.

Once a jurisdiction meets all its commitments, its name is removed from the annex.

The Ministry of Finance statement said: “In February 2022, the European Union’s Code of Conduct Group welcomed Bermuda’s co-operation and its actions in addressing the recommendation from the FHTP.

“However, at the time, the COCG took the view that, pending a formal decision by the FHTP at its next scheduled meeting in April 2022, the group would include Bermuda’s commitment to address the recommendation in Annex II.”

The statement added: “At the 56th meeting of the FHTP held on April 21 and 22, delegates formally concluded, in respect to Bermuda, that the recommendation relating to the exchange of information be removed.

“This confirms that Bermuda satisfied the condition imposed by the COCG for removal from Annex II.

“Consequently, it is the Ministry’s expectation that Bermuda will be removed from Annex II in October 2022.”