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DC names Bermuda on tax haven list

On the list: The District of Columbia has named Bermuda as a tax haven

Bermuda has been named on a list of 39 tax havens by the District of Columbia in the US.

The Island is joined on the list by other offshore centres like the Cayman Islands, Jersey, the British Virgin Islands, the Bahamas and the Isle of Man.

The change in the District’s Budget Support Act was signed by the Mayor earlier this month for the purposes of “water’s edge combined group rules” which includes the entire income and apportionment factors of any member doing business in a tax haven.

Originally, the District defined tax havens as a jurisdiction with no effective or a nominal tax on the relevant income and had laws and practices that prevented the exchange of tax information with other governments.

Other factors listed were a lack of transparent, facilitated establishment of foreign entities without a local presence or impact on the local economy, excluded local residents from taking advantage of the tax regime’s benefits and created a tax regime “favourable for tax avoidance”.

But the original legislation did not identify specific jurisdictions.

The changes in the law will have to be reviewed by the US Congress before becoming law.