Bermuda Concludes Negotiations of a Tax Information Agreement with Belgium; Significant Benefits Gained for Industry

Bermuda's Minister of Finance the Hon. Paula A. Cox announced that Bermuda had concluded negotiations of a bilateral agreement with Belgium that provide for a full exchange of information on criminal and civil tax matters between Bermuda and the Kingdom of Belgium.

Negotiations took place December 2nd in Brussels, Belgium, at the Ministry of Finance. Bermuda's negotiating team included Assistant Financial Secretary, Mr. Wayne Brown, and Treaty Advisor, Laura Semos.

Amongst those benefits accrued for Bermuda within the tax information exchange agreement (TIEA) is a commitment by Belgium to conclude a series of mini double taxation agreements with Bermuda. Further, Belgium stated within the TIEA itself that Bermuda does not engage in harmful tax practices, nor is it considered by Belgium to be a tax haven.

Commenting on the agreement, Minister Cox said that Bermuda's proposed treaty with Belgium is one more example of Bermuda moving swiftly to expand upon its role in the global financial network, to strengthen and deepen its relationships with other financial centres, and to exceed the expectations of international bodies such as the Organization for Economic Cooperation and Development (OECD).

"In addition to concluding negotiations with Belgium, this week Bermuda is acting as Co-Chair of the OECD Global Forum Steering Group in Paris," continued the Minister. "Bermuda was elected to this internationally prestigious and influential position at the meeting of the OECD Global Forum in September of this year. In each respect, both in exceeding international standards of information exchange and transparency by concluding tax information exchange agreements such as with Belgium, and by taking a leading role in international bodies that set global tax policy, we are adding to the attraction of Bermuda as a leading domicile for international companies and affirming our long-standing position as a leader in international business," she said.

David Ezekiel, Chairman of the Association of Bermuda International Companies (ABIC) said the conclusion of TIEA negotiations with Belgium is another significant step forward for Bermuda's regulatory regime and is especially meaningful given the already substantial involvement of Belgian companies in Bermuda's financial sector. "The success of our Ministry of Finance in concluding another important TIEA is heartening and bodes well for the future of this important sector of Bermuda's business landscape," he said.

Bradley Kading, President and Executive Director of the Association of Business Insurers and Reinsurers (ABIR), echoed Mr. Ezekiel's sentiments: "The Bermuda/Belgian TIEA formalizes a practice of transparency and cooperation that Bermuda seeks with its major trading partners. ABIR members provide an estimated 30% of the broker placed coverage for catastrophic windstorm and flood reinsurance protection purchased by Belgian insurers. In addition our members' European subsidiaries write approximately 8% of the Belgian broker placed reinsurance business. Four ABIR members have licensed subsidiaries in the country. Mr. Kading added that Bermuda maintains a robust risk-based prudential insurance regulation regime and has a long history of cooperation with regulatory and tax authorities in other jurisdictions.

Minister Cox intends to sign with Belgium immediately following the conclusion of Belgium's internal approval process. Currently, Bermuda has eighteen signed tax TIEAs with the following members of the G7: France, Germany, the United Kingdom, and the United States. In addition, Bermuda has TIEAs with Australia, Ireland, New Zealand, the Netherlands, the Nordic Group (including Denmark, Finland, Iceland, Norway and Sweden and their associated territories the Faroe Islands and Greenland), Netherlands Antilles and Aruba, and Mexico. Negotiations have been concluded with, among others, Canada, Japan, and Spain, with these agreements anticipated to be signed in early 2010.

Bermuda's TIEA with Belgium includes all standard means to ensure due process is followed in tax information requests to Bermuda, including, for example, provisions to protect the confidentiality of information provided as well as adhering to public policy.

Bermuda's TIEAs are available for review on the OECD website, at www.oecd.org.