Bermuda was returned to the European Union’s (EU) list of fully cooperative tax jurisdictions today, February 18, while the Cayman Islands joined the ranks of the non-cooperative.
The island rejoins the EU’s ‘white list’ following a meeting of its Finance Minister at an Economic and Financial Affairs Council in Brussels, Belgium earlier today.
Further, Panama was re-added to the list after its first appearance in December 2017 but was later removed the following year. “Panama does not have a rating of at least “Largely Compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request and has not resolved this issue yet”, the EU’s Council said.
“This outcome is testament to Bermuda’s commitment to meet and exceed the highest international standards of regulatory compliance and economic substance.”– CEO of the BDA, Roland Andy Burrows
Panama’s inclusion accompanies that of Cayman Islands, Palau and the Seychelles.
Related to the Cayman Islands, the European Council said it does not have appropriate measures in place relating to economic substance in the area of collective investment vehicles.
The list of non-cooperative jurisdictions for tax purposes is used by member states of the EU to deal more strongly with countries that “encourage abusive tax practices”, said the bloc’s Council.
It also forms part of the EU’s efforts to improve tax governance by clamping down on tax fraud and evasion, tax avoidance and money laundering.
According to a release from the Bermuda Business Development Agency (BDA), the island’s revised status was due to the implementation of reforms to address concerns by the EU. Among the measures applied was the introduction of the Bermuda Economic Substance Amendment (No.2) Act 2019 which came into effect at the start of the year.
CEO of the BDA, Roland Andy Burrows, said “This outcome is testament to Bermuda’s commitment to meet and exceed the highest international standards of regulatory compliance and economic substance.” He added that “Combined with our world-leading achievements in the Financial Action Task Force assessment, together with Bermuda’s EU Solvency II equivalence and status as a NAIC Reciprocal Jurisdiction in the US, Bermuda’s blue-chip transparency and outstanding offering to global business is second to none.”