Colombia says Bermuda is not on tax haven ‘hit list’
Bermuda has escaped being put on a 44-strong list of tax havens targeted by the government of Colombia.
Competitors the Cayman Islands, the British Virgin Islands, Jersey, the Isle of Man and the Bahamas are all on the list.
Now the government of Colombia will slap a 33 percent charge on assets moved from Colombia to any of the countries on its hit list.
But the law passed this week said that — because the Colombian government is negotiating a tax information exchange treaty with Bermuda and several other countries — they were to be “temporarily excluded” from its targeted jurisdictions.
Senator Michael Fahy, who is acting Finance Minister as Bob Richards is off the Island, said: “These treaties do help and we will continue going along the road of these kinds of treaties.
“The Minister of Finance has done a great job in the last ten months in ensuring that Bermuda's reputation is that of not being a tax haven.
“That message is getting out there loud and clear.”
Sen Fahy added: “Central America and South America are great emerging markets for business. This is a good indication of these markets and their view of Bermuda that we are a sound jurisdiction to do business with.”
The Colombian tax authority estimates the country misses out on up to $10.6 billion in income and corporate tax every years due to undeclared money kept abroad.
Colombian Finance Minister Mauricio Cardenas said: “For those who have been taking advantage of tax havens, the party is over.
“It is absolutely necessary to put the brakes on this loss of resources.”
He added that many people who avoid paying tax in their home country are high-earners or major business owners.
Peter Everson, a board member of the Association of Bermuda International Companies and the Bermuda Chamber of Commerce, said: “What it means is that they are restricting their citizens on where they can trade in the world, but they have decided that Bermuda is a jurisdiction with which they can continue to trade.
“That's always in Bermuda's interests because we live by trade.”
Bermuda has been targeting the potentially lucrative South American region for the past year and in June, the Bermuda Captives Conference for the first time held sessions in Spanish and provided a translation service.
The conference led to three new captive insurance companies being incorporated in Bermuda, one of them from Colombia and others from Brazil and Peru.
Mr Everson added he was unaware of the extent of business conducted between Bermuda and Colombia.
But he said: “Apart from companies being incorporated here, it could well be that Colombia's equivalents of Argus and BF&M reinsure their risks with Bermuda companies.”