New Tax Reform Commission to study OECD proposals
The finance minister Curtis Dickinson yesterday refused to publicly divulge which countries are allied with Bermuda in the international discussions of the global tax initiative set to come to a head this October.
But he will soon reconstitute the Tax Reform Commission to not only consider Bermuda’s domestic issues of taxation, but also consider and analyse what is finally agreed to by the G20 in October.
He told Parliament, “I therefore anticipate the Tax Reform Commission may not engage in the full scope of its work until after October 2021, when the technical aspects of the two BEPS Pillars are completed by the Inclusive Framework, and endorsed by the G20 meetings.”
And while the Minister thought it appropriate to keep secret the countries of help to the island in the formal discussions under way at an international level, he did agree to discuss it privately with Opposition Leader Cole Simons, who raised the question as the One Bermuda Alliance critic for Finance.
Mr. Simons brought the questions after the Minister delivered a statement on the floor of the House of Assembly stating that the Ministry of Finance will continue to work closely with industry stakeholders and other strategic partners, to advocate for technical details that are in Bermuda’s interests and seek to enhance Bermuda’s competitive position.
The Minister was updating the House of Assembly with the work of the Organisation of Economic Co-operation and Development (OECD) Committee known as the Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
The G20 commissioned the OECD to address BEPS because of the increasing difficulty for member countries to collect corporate income tax, especially from some 80 multinational businesses with a global turnover above 20 billion euros and profitability above 10 per cent.
In response to a question, the Minister expressed doubt that any of the 80 companies conducted business operations in Bermuda.
The Minister said that Pillar One agreements allow for an exclusion to apply to regulated financial services companies, and certain natural resources companies, the details of which will be determined in technical negotiations through to October.
Bermuda and other countries are all now focused on such talks.
“Pillar Two will be central to our considerations,” the Minister said.
”As we have in the past, the Ministry of Finance will continue to work closely with our industry stakeholders and other strategic partners, to advocate for technical details that are in Bermuda’s interests and seek to enhance Bermuda’s competitive position.“
In an interview on The Daily Hour this morning, the Premier said moves for a global minimum tax had received a “new impetus“.
David Burt said he was unsure how Bermuda would be impacted by the agreement by G7 countries to back a new global minimum tax rate of at least 15 per cent for companies.
“It is an interesting proposal which has new impetus,” he said, adding that Bermuda would continue to engage in the matter “at a technical level”.
Minister Dickinson reiterated his press statement of July 2: “As a country committed to transparency, co-operation, and high levels of compliance with international standards, the Government of Bermuda joined the Statement on a new framework for international taxation, arising from the OECD meeting of July 1, 2021; and looks forward to supporting its ongoing technical discussions ahead of the meeting of G20 Finance Ministers meeting in October 2021.
“Bermuda has been actively involved in ongoing discussions relating to this initiative to present positions that reflect the national interest and that of our various stakeholders. As part of that approach, we recognised the need to join with other members of the Inclusive Framework to reach this position supported by a significant majority of the membership.
“We fully intend to remain an active participant in the ongoing work of the Inclusive Framework to complete the development of an appropriate plan.
“We have noted areas of concern at a technical and practical level, which we look forward to working to resolve constructively in the months ahead.”