Bermuda Confident of Removal from EU List

Bermuda Confident of Removal from EU List

About Jeremy LeeseJeremy Leese

Jeremy’s practice focuses on corporate finance, mergers and acquisitions, corporate reorganisations and restructurings, banking and international real estate finance, structured finance, as well as regulatory and legislative compliance.

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Recently, Bermuda was placed on the European Union’s list of non-cooperative jurisdictions for tax purposes. It is the Bermuda Government’s view that the jurisdiction is compliant with EU’s economic substance requirements by way of the Economic Substance Act 2018 and the Economic Substance Regulations 2018 passed into law last December, with all necessary amendments to address EU concerns having been completed before the decision was taken.

A significant reservation to this decision was expressed by a UK Government representative who stated for the record:

“The UK agreement to the Council Conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes is on the basis that as set out in the Conclusions, jurisdictions should be removed as soon as possible after they have demonstrated they are compliant. The UK notes that Bermuda has legislated to address the issue identified. In light of this we expect Bermuda, and other compliant jurisdictions, to be removed from the list at the next available opportunity.”

The next meeting of the Code of Conduct Group (Business Taxation) of the Council of the EU is due to be held in May and the Bermuda Government is confident that the Island will be removed at that time, with plans to visit key EU Ministers or their officials to reinforce Bermuda’s position before then. Although there may be implications for any direct dealings between Bermuda and the European Union itself until May, no direct formal sanctions have been levied by EU Member States on the jurisdictions on the list at the time of writing.

The Island’s economic substance legislation is in force and is being implemented. Bermuda remains an international offshore centre with an excellent reputation, a jurisdiction committed to compliance with global standards.

A previous post on this topic can be found here.