Bermuda has concluded a comprehensive bilateral tax information exchange agreement (TIEA) with Spain, which provides for a “full exchange of information on criminal and civil tax matters.” The announcement, issued by Bermuda’s Ministry of Finance, noted that “significant benefits were accrued for Bermuda including an exemption from 30 percent corporate tax rate on Spanish income earned on investment in Bermuda.”
The negotiations took place September 28-29 in Madrid. Bermuda’s negotiating team including Assistant Financial Secretary, Mr. Wayne Brown, and Acting Deputy Solicitor-General, Mr. Huw Shepheard.
When the TIEA is formally signed, it will release Bermuda “from Spain’s list of uncooperative jurisdictions (outlined in the First Additional Provision of the Spanish Law to Avoid Tax Evasion),” said the bulletin. In addition, “any Spanish corporation investing 5 percent or more in a Bermuda entity shall be exempt from Spain’s 30 percent corporate tax rate on income such Spanish corporation receives from its investment in Bermuda, provided its investment in the Bermuda entity has been for more than one year. Therefore, Spanish companies currently investing in Bermuda for more than one year will receive the exemption from the Spanish tax from day one of the coming into effect of the TIEA.”
The Ministry noted, that the provisions on taxes would hopefully provide “a major incentive to Spanish companies establishing Bermuda captive insurance companies and investment vehicles, thus boosting international business in Bermuda and the associated income such business that generates in the Bermuda economy.”
Bradley Kading, President and Executive Director of the Association of Business Insurers and Reinsurers (ABIR), noted that the “Ministry has done an excellent job in demonstrating Bermuda’s commitment to the OECD and G 20 international tax compliance standard.
“Bermuda’s insurers in ABIR’s membership write approximately 11 percent of the broker placed reinsurance for Spanish insurers. Spain has been a growing market in Europe and Spain is home to one of the world’s largest reinsurance corporations. It’s a natural place for Bermuda’s insurers to do additional business in the future.”
Source: Bermuda’s Ministry of Finance – www.gov.bm
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