Government has agreed the terms of a bilateral tax information exchange treaty (TIEA) with Brazil.

The agreement, which will be signed later this year, pending its internal approval in both countries, will allow for an exchange of information on criminal and civil tax matters.

"Bermuda's proposed treaty with the Federative Republic of Brazil signifies the achievement of our strategic objective to conclude negotiations of tax information exchange agreements with the largest national economy in Latin America," said Finance Minister Paula Cox, in a statement announcing the accord.

The Minister noted that currently there are 126 business entites on the Island with Brazilian interest, but the number was expected to "exponentially expand as our economic and political ties with Brazil are strengthened and deepened".

Commenting on the agreement last week, Brad Kading, president and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR), said: "The opening up of the Brazilian reinsurance market is one of the great accomplishments of free trade advocates in the last several decades. Since the reinsurance monopoly was abolished, more than seven Bermuda reinsurers have established Brazilian operations.

"In turn, the previous Brazilian reinsurance monopoly is itself seeking to expand and diversify its business outside of Brazil. The TIEA with Brazil demonstrates good cooperation between the two jurisdictions."

Bermuda currently has 21 signed agreements with provisions for the exchange of information for tax purposes.

Last year, the Organisation of Economic Cooperation and Development (OECD) put Bermuda on a 'grey list' of countries on their level of tax transparency. The Island has since been promoted to the 'white list' after meeting the required minimum of 12 TIEAs and has continued to negotiate more of the agreements.

Bermuda's proposed TIEA with Brazil includes all standard measures to ensure "due process" in tax information requests.