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House: OECD backs economic substance rules

Curtis Dickinson, the Minister of Finance (File photograph by Blaire Simmons)

The OECD has formally reported its approval of Bermuda’s updated economic substance rules, according to Curtis Dickinson, the Minister of Finance.

Under amendments to the Economic Substance Act, enacted last month, entities that are tax resident in another jurisdiction will be outside the scope of substance rules — a carve-out that brought Bermuda’s legislation in line with rival offshore jurisdictions.

Mr Dickinson told the House of Assembly today that the OECD’s Forum on Harmful Tax Practices formally approved the island’s legislative framework on substance, including the amendments.

Mr Dickinson told the House of Assembly today: “As a matter of necessity, the Ministry of Finance has now turned its attention to other areas of our legislative framework that require amendment to ensure our legislative framework is similar to that of other equivalent jurisdictions.

“Indeed, the EU and OECD recognise that the economic substance framework must reflect a level playing field across all equivalent jurisdictions.”

He added that the most significant amendments being considered involve holding entities, finance and leasing, shipping and local companies.

Mr Dickinson told MPs: “Another area that requires legislative amendments relates to collective investment vehicles.

“The BMA has been engaged in discussions with the EU Commission about the proposed legislative framework for CIVs.”

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