Bermuda Signs Tax Accord with Portugal

Bermuda announced that it has signed a bilateral agreement with the Portuguese Republic that “provides for a full exchange of information on criminal and civil tax matters between Bermuda and the Portuguese Republic.

“The signing of the Tax Information Exchange Agreement (TIEA) took place at a ceremony today at the Premier’s official residence at Camden. The TIEA was signed by the Hon. Paula A. Cox, J.P., M.P., Minister of Finance and Deputy Premier, and Portuguese Republic Secretary of State for Fiscal Affairs, Professor Sérgio Vasques.”

The bulletin noted that with the signing of the agreement the island “will be removed from the Portuguese Republic’s list of tax havens upon the TIEA entering into force. This provision exempts Bermuda from several domestic rules concerning tax havens including punitive measures that apply to listed countries, such as the application of CFC rules, expense deduction rules, special tax rules, and capital gains realized by non-resident entities, amongst others.”

Minister Cox pointed out that “at present, there are 70 entities in Bermuda with a Portuguese Interest. It is undoubtedly the case that this agreement will garner benefits for Portuguese investors in Bermuda companies and help boost commerce between the two jurisdictions.”

“In addition, the cultural ties between Bermuda and the Portuguese Republic are strong, dating back to the 1840s when Portuguese settlers first started immigrating to Bermuda; today, Portuguese represent over nine percent of our population.

“Just last year, our 400th anniversary of settlement, Bermuda renamed Spanish Rock to Portuguese Rock to reflect that the Spittal Pond landmark was engraved by Portuguese shipwreck survivors and not Spanish, as initially thought. As announced in the 2009 Speech from the Throne, Bermuda’s cultural ties with the Portuguese Republic will be further strengthened by the introduction in the 2010/2011 school year of instruction of Portuguese in the public school system of Bermuda.”

“This is the second instance of Bermuda negotiating directly with Portugal, following the signing of the Bermuda Azorean Accord in 1991 which expanded the rights of Azoreans to work in Bermuda. Bermuda’s treaty with the Portuguese Republic will further strengthen and deepen our relationship and provide immense opportunities for further business links between Bermuda and Portugal.”

Source: Bermuda Monetary Authority