Finance Minister Paula Cox took concerns about the impact of a European Union tax directive on investment funds located in Bermuda directly to tax officials in Berne, Switzerland last week.

Finance officials said the tax directive, which came into effect on July 1, has negatively affected some funds domiciled in Bermuda even though the Island and other financial services domiciles, including Singapore and Hong Kong, are not directly affected by the new ruling.

The directive provides a mechanism for EU countries, as well as third-party countries aligned with the directive, to share information on the savings income of EU citizens with their home governments.

In some limited cases, a system of tax retention through a withholding tax has been instituted.

Finance officials said a Bermuda domiciled fund could be adversely affected if, for example, its paying agent was located in Switzerland, which means it would be caught within the scope of the directive.

Ms Cox, who was joined by Finance Ministry and industry officials on her trip, addressed these points with senior officials at the Swiss Federal Tax Administration in Berne, Switzerland.

"The delegation of senior Swiss tax officials with whom we met were very well briefed and understood Bermuda's concerns about the impact on our funds sector," she said, in a statement yesterday.

"Our delegation submitted a written brief together with a copy of Bermuda's Collective Investment Scheme Regulations," she said, and that Swiss authorities are due to respond to the submission as soon as the "complex" issues were reviewed.

Ms Cox was joined by Financial Secretary Donald Scott, Economic Policy Adviser Dr. Andrew Brimmer and Legislative Consultant Shauna MacKenzie, Conyers Dill & Pearman partner John Collis, CITCO Fund Services' Ian Pilgrim, as well as an official of the British Embassy in Berne, Martin Webber. "Our delegation represented Bermuda's interests exceedingly well and was a sterling example of public-private partnership in defence of Bermuda's national economic interest," she said. Ms Cox said informal discussions around the tax directive meeting widened to Swiss interest in Bermuda's public and private sector.

The Swiss officials expressed an interest in "relationship building" with both the public and private sectors, she said, and a future visit to the Island was discussed. Ms Cox also travelled to Switzerland on Government business last September to explore joining the World Trade Organisation.