Bermuda not affected by Stop Tax Haven Enforcement Act, says The Association of Bermuda Insurers & Reinsurers
Insurance and reinsurance companies based in Bermuda would not be affected by new laws against offshore, said Bradley Kading of The Association of Bermuda Insurers & Reinsurers.
"There may be some Bermuda corporations affected by the bill," said Kading. "We don’t believe it affects the global insurance and reinsurance companies based in Bermuda."
The Levin bill (Stop Tax Haven Enforcement Act), which has received the support of the Obama adminsitration, is "focused on US multinational corporations and US citizens," he said. "It is focused secrecy and financial reporting concerns."
There is not common definition of “tax haven” Kading said, and he listed four criteria that are often seen:
1) is there an income tax, or a low rate of taxation?
2) is there secrecy with regard to financial information of banks and other financial institutions?
3) is there a lack of cooperation with other countries with regard to tax law, money laundering or other enforcement matters?
4) is there an actual economic substance to the companies operations located in the country?
"Bermuda does not meet three of these four tests," Kading said. "Bermuda is not a bank secrecy jurisdiction. We have tax information exchange agreements with the US, UK and with other countries. Bermuda willingly enters into such agreements. Bermuda recently signed an additional law enforcement cooperation agreement with the US. Bermuda is cited by the US Treasury and the OECD as a cooperative jurisdiction with regard to tax law enforcement. Our members in Bermuda perform substantive underwriting in Bermuda and most have their headquarters staff in Bermuda."
Bermuda’s government has never had an income tax. The government has two primary sources of revenue: tariffs on all imports (the island requires large amounts of imports) and a payroll tax largely paid by companies on behalf of their employees.