A group representing Bermuda’s largest insurers is firmly in favour of the island striving to meet new “country-by-country” income reporting standards aimed at forcing multinational companies to pay taxes where profits are generated.

The initiative is part of the Organisation for Economic Cooperation and Development’s Base Erosion and Profit Shifting action plan, which aims to curb the use of elaborate corporate structures to funnel profits from where they are earned to low-tax jurisdictions.

Yesterday, European Union tax officials put forward their own proposals to clamp down on tax avoidance in line with the OECD initiatives.

Jonathan Hill, the EU tax commissioner said he wanted “to make sure that taxes are paid where profits are generated”.

The proposals would force companies that generate more than 750 million euros ($850 million) in global revenues and do business in the EU to publish how much income tax they pay in each member state and how much they pay on outside-EU business.

Many of Bermuda’s largest commercial reinsurers would meet those criteria.

Mr Hill added the rules would specifically target companies that do business in nations or territories that disregard good governance standards on taxation.

“So if large multinationals active in Europe are paying tax somewhere like Panama, to take one example, they would need to make that public,” Hill said, taking a swipe at the Central American nation at the heart of the latest tax avoidance scandal.

Bradley Kading, president of the Association of Bermuda insurers and Reinsurers, said it was important for Bermuda to ensure it met the tax transparency standards being demanded by the international community.

“The new EU anti-tax avoidance directive will lead to creation of a non-co-operative jurisdiction list,” Mr Kading said.

“Key factors in evaluating and selecting those countries will be adoption of key OECD provisions on tax law co-operation, enforcement and transparency. Bermuda needs to continue to address its standing on those matters with the correct EU officials.

“One matter pending in front of the Ministry of Finance is adoption of the OECD country-by-country tax and income reporting standards for Bermuda multinationals.

“Abir strongly supports Bermuda’s adoption of that standard for the current calendar year.”

Mr Kading added that the Bermuda Government had worked well in Brussels to explain “Bermuda’s leading commitments to tax transparency, co-operation and disclosure”.

“Bermuda needs to be at the forefront of adoption of OECD standards and the Bermuda Monetary Authority needs to continue its excellent track record of meeting international regulatory standards,” Mr Kading said.

This year is key for the island in meeting those international standards, as scrutiny on offshore financial centres continues to ramp up in the wake of the Panama Papers which revealed widespread tax avoidance by the wealthy.

Just last month came the confirmation of Solvency II equivalence, the recognition that the island’s insurance regulatory standards matched those of the EU.

On Monday, Michael Dunkley, the Premier, announced that Bermuda would expedite access to its register of beneficial ownership for the UK’s National Crime Agency, a development described by Mr Kading as “good news”.

Mr Kading added: “Bermuda’s compliance with the OECD tax standards, a reputation for co-operation with other governments, the compliance with anti-money laundering requirements and the meeting of international regulatory standards by the BMA will all be part of Bermuda’s case in demonstrating it is a co-operative jurisdiction in which the EU can have confidence.

“We hope all stakeholders in Bermuda understand the importance of these actions and value the leadership of the government in meeting them.”