Bermuda Signs Tax Agreement With Portugal
Bermuda today signed a Tax Information Exchange Agreement (TIEA) with the Portuguese Republic that provides for a full exchange of information on criminal and civil tax matters. This agreement marks Bermuda’s 21st signed agreement, with provisions for the exchange of information for tax purposes.
The TIEA was signed by the Minister of Finance and Deputy Premier Paula Cox, and Portuguese Republic Secretary of State for Fiscal Affairs, Professor Sérgio Vasques at a ceremony today at the Premier’s official residence at Camden.
-
Distinguished guests at the signing ceremony included Portuguese Republic Secretary of State for Fiscal Affairs Advisor Ms. Ana Rita do Livramento Chacim, Acting Consul for the Consulate of Portugal in Bermuda Ms. Ana Rosa Freitas, Honourable Ministers of Cabinet, the President of the Vasco Da Gama Club Mr. Paul Fortuna, businessman Mr. Eddy DeMello, and local international business industry representatives.
Amongst those benefits accrued for Bermuda within the TIEA is the provision that Bermuda will be removed from the Portuguese Republic’s list of tax havens upon the TIEA entering into force.
This provision exempts Bermuda from several domestic rules concerning tax havens including punitive measures that apply to listed countries, such as the application of CFC rules, expense deduction rules, special tax rules, and capital gains realized by non-resident entities, amongst others.
Bermuda’s TIEA with the Portuguese Republic includes all standard means to ensure due process is followed in tax information requests to Bermuda, including, for example, provisions to protect the confidentiality of information provided, as well as adhering to public policy, provisions related to protecting legal privilege, and anti-fishing provisions to ensure that requests for information from Portugal are relevant to on-going tax investigations being conducted by Portuguese authorities.
Following the signing, Minister Cox commented:
I am delighted today to sign this Tax Information Exchange Agreement with the Portuguese Republic, following the conclusion of negotiations in December 2009. This treaty is a significant step forward in Bermuda and Portugal’s long-standing close relationship.
At present, there are 70 entities in Bermuda with a Portuguese Interest. It is undoubtedly the case that this agreement will garner benefits for Portuguese investors in Bermuda companies and help boost commerce between the two jurisdictions.
In addition, the cultural ties between Bermuda and the Portuguese Republic are strong, dating back to the 1840s when Portuguese settlers first started immigrating to Bermuda; today, Portuguese represent over nine percent of our population. Just last year, our 400th anniversary of settlement, Bermuda renamed Spanish Rock to Portuguese Rock to reflect that the Spittal Pond landmark was engraved by Portuguese shipwreck survivors and not Spanish, as initially thought. As announced in the 2009 Speech from the Throne, Bermuda’s cultural ties with the Portuguese Republic will be further strengthened by the introduction in the 2010/2011 school year of instruction of Portuguese in the public school system of Bermuda.
This is the second instance of Bermuda negotiating directly with Portugal, following the signing of the Bermuda Azorean Accord in 1991 which expanded the rights of Azoreans to work in Bermuda. Bermuda’s treaty with the Portuguese Republic will further strengthen and deepen our relationship and provide immense opportunities for further business links between Bermuda and Portugal.”
It has been our pleasure hosting the Secretary of State for Fiscal Affairs throughout his stay in Bermuda. In particularly fortuitous timing, the dignitaries arrived on Island on the weekend of this fifth Sunday after Easter, just as the local Portuguese community were celebrating the Santo Cristo Festival, the largest Portuguese celebration in Bermuda, a vibrant religious and cultural festival with Azorean origins.”
I am pleased to note that the Secretary of State for Fiscal Affairs has had an opportunity to visit with local industry leaders such as the Bermuda Monetary Authority and Business Bermuda, in order to garner further information on Bermuda’s high regulatory standards and commitment to excellence as a leading financial centre. As well, I am pleased that the Secretary of State will have an opportunity to visit such local Portuguese sights of interest such as the exhibits at the Commissioner’s House and the Portuguese Rock, in order to get the full flavor of Bermuda’s pronounced historic ties to Portugal.
Bradley Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR), said:
Bermuda global reinsurers have an estimated 23% of the broker-placed reinsurance placed for Portugal’s domestic insurers. There are long standing cultural ties between Portugal and Bermuda and good business relationships have been developed. The TIEA will help encourage additional business relationships which will be good for both Portugal and Bermuda.
Cheryl Packwood, CEO of Business Bermuda.
Reaching this agreement with Portugal is an important development which reflects Bermuda’s broadening commitment to tax and regulatory transparency with European Union and its key member nations.
This is another positive step that provides a new market for Bermuda to develop international business relationships and grow. The Ministry of Finance, the Government of Bermuda and others who have been active in reaching this agreement are to be commended. It is yet another example of Bermuda’s leadership and our consistent efforts to set the highest standards of business conduct and transparency. We look forward to working with businesses in Portugal as they learn more about Bermuda and international business opportunities in our market.
