Bermuda & Brazil Complete Tax Treaty Negotiations
The Minister of Finance Paula Cox announced that Bermuda and Brazil have completed negotiations of a bilateral tax information exchange treaty (TIEA) with the Government of Brazil. The TIEA is not yet signed. It is expected to be signed later this year after both countries’ internal approval processes have been completed. The TIEA would provide for a full exchange of information on criminal and civil tax matters between the two countries.
Bermuda currently has 21 signed agreements with provisions for the exchange of information for tax purposes. Bermuda has signed TIEAs with the United States, Australia, United Kingdom, New Zealand, the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland, Greenland, Faroe Islands), Netherlands, Germany, Ireland, Netherlands Antilles, France, Mexico, Aruba, Japan, and Portugal. Further, Bermuda has a double taxation agreement with the Kingdom of Bahrain.
Bermuda’s proposed TIEA with the Federative Republic of Brazil 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 to ensure that requests for information from Brazil are relevant to tax investigations being conducted by Italian authorities.
Minister Cox commented on the agreement by saying:
Bermuda’s proposed treaty with the Federative Republic of Brazil signifies the achievement of our strategic objective to conclude negotiations of tax information exchange agreements with the largest national economy in Latin America. As a BRIC country, a member of the G20 and a current focus of opportunity for Bermuda’s international reinsurers, Brazil is a key strategic relationship within South America.
Bermuda, its capacity as a Vice Chair of the Steering Group of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes works very closely with the Federative Republic of Brazil, and we very much look forward to welcoming delegates from Brazil to Bermuda next year when we host the 2011 Global Forum. Moreover, Bermuda is to host the next conference of the Asociación Latinoamericana de Administradores de Riesgos y Seguros (ALARYS), an organization of risk managers from across Latin America, this October. Currently, there are 126 entities in Bermuda with Brazilian interest, but we expect this number to grow exponentially as our economic and political ties with Brazil are strengthened and deepened.
Brad Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR) said:
The opening up of the Brazilian reinsurance market is one of the great accomplishments of free trade advocates in the last several decades. Since the reinsurance monopoly was abolished, more than seven Bermuda reinsurers have established Brazilian operations. In turn, the previous Brazilian reinsurance monopoly is itself seeking to expand and diversify its business outside of Brazil. The TIEA with Brazil demonstrates good cooperation between the two jurisdictions.
