UK FINANCIAL CENTRE TERRITORIES REACT TO G7 GLOBAL CORPORATE TAX AGREEMENT: BERMUDA

Bermuda has reacted to the decision of G7 countries working on implementing a global corporate tax rate of 15 per cent saying “it is critical that any agreed framework must respect a country’s right to sovereignty in relation to its tax system.”

In an official statement, the jurisdiction’s Finance Minister, Curtis Dickinson, said: “Any outcome that impacts this right is outside the originally agreed aims of the OECD BEPS initiative.”

Mr Dickinson also said such a move does not give appropriate consideration to the rights and needs of those jurisdictions which lack the economies of scale and resources of larger jurisdictions.

He said Bermuda has had a history of supporting quality business while adhering to fiscally responsible policies through a balanced long-term growth agenda.

“Given the importance of cross-border trade to the Bermuda economy, Bermuda authorities have always been committed to ongoing compliance with international standards for financial regulation, transparency, and international cooperation.”

The Bermuda Finance Minister stressed that the territory has been subject to independent, international scrutiny by various global standard-setting bodies.

However, while Bermuda supports the overall objectives coming out of the G7 Finance Minister meeting dealing with climate change, combating financial crime, creating greater financial stability and helping vulnerable economies, its stance on the global corporate tax is cautious.

Mr Dickinson insisted that conclusions reached must incorporate principles of fairness and right to sovereignty on tax issues and also recognise the efforts of jurisdictions such as Bermuda.

“There should also be appropriate recognition of the considerable work done, by countries such as Bermuda, to be effective partners in promoting and implementing robust standards for strong and robust regulation, transparency and international cooperation,” he said.

“Bermuda’s consumption-based tax regime yields a ratio of total government receipts to GDP of approximately 16% on average, which we deem appropriate for an economy such as ours,” Mr Dickinson stated.