EU Council Removes Bermuda From Annex II

[Updated] Sixteen jurisdictions — including Bermuda — have been removed from Annex II of the ‘EU list of non-cooperative jurisdictions for tax purposes,’ while four jurisdictions have been added.

Bermuda was removed from the ’EU list of non-cooperative tax jurisdictions’ last year, but had been added to the Annex II of the EU list, the so-called ‘grey list’, which the island has now been removed from.

Premier David Burt tweeted this morning saying, “Due to the hard work of @BdaGovernment Ministry of Finance under @FinanceBDA’s leadership & the work of @BermudaMonetary, this morning our country was removed from the EU’s ‘grey list’ of Non-Cooperative jurisdictions for tax purposes.”

A statement issued today [Feb 18] by the Council of the European Union said, “The Council today adopted revised conclusions on the EU list of non-cooperative jurisdictions for tax purposes.

“In addition to the 8 jurisdictions that were already listed, the EU also decided to include the following jurisdictions in its list of non-cooperative tax jurisdictions:

• Cayman Islands;
• Palau;
• Panama;
• Seychelles

“These jurisdictions did not implement the tax reforms to which they had committed by the agreed deadline.

“Annex II of the conclusions, which covers jurisdictions with pending commitments, reflects the deadline extensions granted to 12 jurisdictions to enable them to pass the necessary reforms to deliver on their commitments.

“Most of the deadline extensions concern developing countries without a financial centre who have already made meaningful progress in the delivery of their commitments.

“16 jurisdictions [Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, Curaçao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts and Nevis, Vietnam] managed to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline and are therefore removed from Annex II.”

Zdravko Marić, Croatian Deputy Prime Minister and Minister of finance said, “The work on the list of non-cooperative tax jurisdictions is based on a thorough process of assessment, monitoring and dialogue with about 70 third country jurisdictions.

“Since we started this exercise, 49 countries have implemented the necessary tax reforms to comply with the EU’s criteria. This is an undeniable success. But it is also work in progress and a dynamic process where our methodology and criteria are constantly reviewed.”

Update 10.35am: A Government spokesperson said, “The Government of Bermuda is pleased to confirm that today it has been graded by EU Finance Ministers [ECOFIN] as a ‘cooperative jurisdiction’ with respect to tax good governance.

“ECOFIN endorsed the assessment of the European Commission and the EU’s Code of Conduct Group on Business Taxation [CoCG] that Bermuda had met its commitments to address concerns raised by the EU in 2019 in relation to economic substance requirements.”

Premier David Burt commented: ‘The recognition of Bermuda as cooperative is welcome validation of the global blue chip status to which we operate, described by some as the Bermuda Standard.

“This is a positive follow-on to the very strong ratings that Bermuda attained in the recent assessment of our regime to combat money laundering, terrorist financing and proliferation financing, which, based on all such assessments done globally to date, placed Bermuda as #1 for overall technical compliance and #7 in effectiveness.

“The ECOFIN decision completes a journey for our island, placing us in pole position to maintain our global competitiveness as a service and finance centre, including in fintech, for our world-class client base and other stakeholders.”

Update 4.53pm: Minister of Finance Curtis Dickinson said: “I am delighted that the EU has recognized the significant work that Bermuda has completed over the course of the last year to ensure that our framework is compliant with the EU tax transparency requirements.

“Today’s announcement reflects the tremendous team effort between the Ministry of Finance, the Registrar of Companies, the Bermuda Monetary Authority, the Attorney General’s Chambers, and industry stakeholders. I would like to thank all stakeholders for their cooperation and support.

“We delivered on our commitment to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline, addressing all of the EUs concerns. Today’s announcement is a testament to the hard work that goes into maintaining Bermuda’s status as a cooperative jurisdiction and a global leader in international tax transparency.”

The Council conclusions on EU list of non-cooperative jurisdictions for tax purposes [PDF here]

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