EU: ‘Should Remove Bermuda From The List’
The Council of the European Union said they are “expected to approve an update to the list of non-cooperative jurisdictions” tomorrow and “the Council should decide to remove Aruba, Barbados and Bermuda from the list.”
This is as “Bermuda implemented its commitment to introduce substance requirements under criterion 2.2″ and could therefore be removed from Annex I, however should be added to Annex II.
These statements are from notices released yesterday by the Council of the European Union in advance of the ECOFIN meeting set for tomorrow.
As it pertains to Bermuda, one document said, “Bermuda adopted additional amendments to its Economic Substance Regulation on 4 March 2019, thereby resolving the last area of concern, i.e. the wording related to core income generating activities for intellectual property assets.
“This legislative change was adopted after the cut-off date agreed by the COCG [24 February 2019] and could therefore not be examined at technical level in time for the ECOFIN Council of 12 March 2019.
“The COCG subgroup on third countries examined the above legislative amendments at its meeting of 27 March 2019 and concluded that Bermuda had implemented its commitment to introduce substance requirements under criterion 2.2 and could therefore be removed from Annex I [delisting]. The COCG confirmed this conclusion at its meeting of 11 April 2019.
“Bermuda should however be added to section 2.2 of Annex II in relation to its commitment to address the concerns relating to economic substance in the area of collective investment funds by the end of 2019.”
This EU document [PDF] on the ‘evolution’ of the list refers to Annex I as the ‘blacklist’ and Annex II as the ‘greylist’, while another EU notice [PDF], which was also released yesterday, provides information on what is expected to happen during the May 17th meeting of the Economic and Financial Affairs Council [ECOFIN] and it states, “The Council is expected to approve an update to the list of non-cooperative jurisdictions: the Council should decide to remove Aruba, Barbados and Bermuda from the list.”
This is in keeping with what Minister of Finance Curtis Dickinson said last week, with the Minister saying they believe that on May 17th the EU will remove Bermuda from Annex I of the list of non-cooperative jurisdictions in tax matters [the so-called “black list”] and “we will be placed in Annex II of the EU list with three other jurisdictions, Bahamas, British Virgin Islands and Cayman Islands.”
“We have already committed to continue to cooperate with the EU with respect to the adoption, by the end of this year, of a proper legislative framework for collective investment funds. Bermuda officials have already engaged last month in a positive dialogue with EU representatives to finalize the scope of the required adjustments to our legislation,” the Minister said.
This process is part of the European Union’s plan to have other jurisdictions meet specifications they set on various matters, and in Bermuda’s case the European Union has requested the island meet their policies as it relates to “economic substance,” which they describe as the “existence of tax regimes that facilitate offshore structures which attract profits without real economic activity.”
In describing why they are compiling the ‘list of non-cooperative jurisdictions,’ the EU said, “Given the global nature of tax competition and aggressive tax planning, this also means addressing external challenges to the tax bases of EU countries. The EU is therefore committed to encouraging transparency and fairer tax competition throughout the world.”
The EU notice released on May 15th follows below [PDF here]:
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Yay, we move from the “blacklist” to the “greylist” with The Bahamas and others. It is still not the “whitelist” that Jersey and Guernsey and the Isle of Man are on though.
This is a super important distinction that you have highlighted Joe Bloggs, thank you!
We hear the Government talking about the “Bermuda Standard” in Fintech and how this standard is modeled on that which our insurance industry has developed after years of hard work and with the help of some of the best minds in the space globally.
Well if ours is the Standard as the Premier talks about, why then are we on a grey list and the Channel Islands are not.
I believe the Minister of Finance and the Premier should address this question specifically…
I pray this isn’t just a new age spin of an old one–”The Platinum Period of Tourism”
Regardless of the color of the non-compliant list we are on, we will FOREVER be on the EU’s “S*!t List.”
That’s what happens when you think you are smarter than the EU and try to pull a fast one on them (and then call it a “typo.”)
Thanks PLP.
Should have never been on it in the first place.
There is no news here. No impact and dealt with. Move on.
So if there is no impact, people should just forget it? Interesting theory.
BTW, there was impact. We are now on the grey list, which we never were in the past. Thanks PLP.
yeah but the incompetent PLP got us there
Wasn’t said recently that.we had been removed from the list. How many lists are yhre?