Bermuda's Minister of Finance Paula Cox has told the island's parliament that
her department has been approached by the United Kingdom government to begin
discussions towards Bermuda's adoption of measures that will see it take a more
active part in the application of the European Savings Tax Directive.
“Government supports the principle of fair tax practices and therefore
is open to exchange of tax information agreements with other jurisdictions where
there is a mutual benefit for both parties to the agreement,” the Minister
told lawmakers.
Bermuda is the only British overseas territory not to have been included in
the Directive for the purposes of exchanging information on EU citizen's savings
accounts with their home member state's tax authorities. However, according
to Cox, it has become apparent that the jurisdiction is already being indirectly
affected by the new European legislation, which came into force on July 1.
"The upshot is that even though Bermuda is outside of the Directive, the
manner in which some countries have applied their home rules which
give effect to the Directive has impacted negatively on funds domiciled in Bermuda
but whose paying agents are located in a country subject to the Directive, for
example, Bermuda domiciled funds whose paying agents are located in Switzerland
or Ireland,” she explained.
Cox added that the inconsistencies in the application of home rules was causing
a degree of uncertainty for the fund sector in Bermuda, citing the Swiss position
as "most problematic".
Cox told parliament that the Finance Ministry will continue to consult with
foreign governments to clarify Bermuda's position with respect to the savings
tax directive.
It is supposed that Bermuda was left out of the scope of the Directive only because legal draughtspeople in Brussels thought that the island is in the Caribbean.
INVESTORSOFFSHORE.COM
