US Government will be the hot topic at next week's conference for Bermudian and North American tax professionals to be held on the Island.

The budget proposals put forward by President Clinton have sparked furious debate among tax experts and the insurance industry.

Now extra time has been found for the issue and it has been slotted in at the last minute by organisers of the Offshore Insurance Operations Conference 2000 to be held next week in the Southampton Princess.

It is believed that if President Clinton's budget should be passed by Senate it may affect the tax status of US-owned offshore domiciles, especially in places like the Virgin Islands and may even impact on some Bermudian captives.

Co-Chairman of the conference Mark Anderson, a partner at KPMG in Atlanta, said: "It is not so much Bermuda or the Cayman Island but companies in places like the Turks and British Virgin Islands. There will be less impact on captives in Bermuda and the Cayman Islands, but there could be some impact.'' The proposals affect certain US owned insurance captives which could for the first time face the top level of taxation.

In the US there are different levels of taxes, depending on the size of the company, or whether the company is starting up or winding down.

The new proposals could mean that all these captives face the same level of tax, whether a start-up or wind-down, cancelling out any rebate.

Tax issues to be discussed "Several years ago there was a similar proposal to change the whole scheme of tax on insurance companies, but Congress, which is Republican, did not pass it. This does not mean that it will not go through. They may reject the bill as a whole, but may take the parts that they like.

"This is why it is such an important topic that we have changed the order of the two-day conference to include debate on this.'' Over 125 professionals will descend on the Southampton Princess for the two-day conference which starts on Tuesday.

Other hot-topics on the agenda include the possibilities for taxation of rent-a-captives. For further information contact the Centre for Tax Education and Research on (860) 443 3400.

TAXES TAX