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Report: Bermuda to come off EU blacklist

Bermuda will be removed from the European Union's blacklist of noncooperative tax jurisdictions next week, a Bloomberg Law report said yesterday.

The news agency added that its report was based on documents obtained by Bloomberg News.

The report came only hours after Curtis Dickinson, the finance minister, told MPs he expected the island to be removed from the blacklist next Friday.

The Bloomberg Law report said Bermuda, Aruba and Barbados were to be removed from the EU blacklist because they had changed their corporate tax laws.

Mr Dickinson told the House of Assembly yesterday that the island was likely to move from Annex 1, the blacklist, to Annex 2 on May 17.

Bermuda and nine other jurisdictions were placed on the blacklist in March, joining five countries already on the list.

A typographical error in economic substance regulation documents submitted by Bermuda to the EU earlier this year was given as the reason the island ended up on the list.

Annex 2, the greylist, is not a list of countries but a list of criteria.

Bermuda is expected to join the Bahamas, the British Virgin Islands and the Cayman Islands, which are grouped together for having tax regimes that facilitate offshore structures that generate profits without real economic activity.

The EU said that a commitment to tackle concerns about economic substance in the area of collective investment funds had also played a part in the decision to move Bermuda and the other three jurisdictions to the greylist.

Mr Dickinson detailed in the House of Assembly the Government's actions to get the island removed from the blacklist when EU finance ministers meet next Friday.

He said he and David Burt, the Premier, had met EU commissioner Pierre Moscovici, who is responsible for economic and financial affairs as well as taxation and customs.

They also met Lyudmila Petkova, chairwoman of the EU's code of conduct group on business taxations. Mr Dickinson added that there had also been meetings with officials from the German and French ministries of finance.

Mr Dickinson said the meetings “permitted Bermuda to further explain in detail the source and reasons for which there was a technical omission in our economic substance regulations submission.

“This omission was addressed and corrected to the satisfaction of the European authorities.”

An EU source explained: “Annex 1 is the list of countries that have failed to give sufficient commitments for co-operation with the EU on tax matters.

“Annex 2 is not a list of countries but a list of criteria — for each of the criteria, the jurisdictions that have not delivered on fulfilling the criteria are listed.”

Mr Dickinson told MPs yesterday: “When Bermuda is removed from Annex 1, we will be placed in Annex 2 of the EU list. This is because of EU concerns regarding the need for a legislative framework for collective investment funds that meets their expectations.”

He said the Government had promised to continue to co-operate with the EU over the adoption of a “proper legislative framework” for collective investment funds by the end of the year.

To read Mr Dickinson's statement in full, click on the PDF under “Related Media”

Finance minister Curtis Dickinson (File photograph by Blaire Simmons)

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Published May 11, 2019 at 9:00 am (Updated May 11, 2019 at 9:00 am)

Report: Bermuda to come off EU blacklist

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