Bermuda will derive significant benefits from its latest tax agreement with Spain, including an exemption from the 30 percent corporate tax rate for Spanish income earned on investment on the Island.

That follows the announced conclusion of negotiations over a Tax Information Agreement Exchange (TIEA) with Spain that provide for a full exchange of information on criminal and civil tax matters between the two countries.

The negotiations took place in Madrid this week at the Spanish Ministry of Economy and Finance, with Bermuda's negotiating team including assistant financial secretary Wayne Brown, and acting deputy solicitor-general Huw Shepheard.

The negotiating team secured, which will apply upon signing the TIEA, release from Spain's list of unco-operative jurisdictions (outlined in the first additional provision of the Spanish law to avoid tax evasion).

One big advantage accrued from the TIEA will be that any Spanish corporation investing five percent or more in a Bermuda entity will be exempt from Spain's 30 percent corporate tax rate on income it receives from its investment, provided the investment has been for more than one year, providing a major incentive for Spanish companies setting up Bermuda captive insurance companies and investment vehicles, thus boosting international business on the Island and financial contributions to the local economy.

Bradley Kading, president and executive director of the Association of Business Insurers and Reinsurers (ABIR), said: "The Ministry has done an excellent job in demonstrating Bermuda's commitment to the OECD and G20 international tax compliance standard.

"Bermuda's insurers in ABIR's membership write approximately 11 percent of the broker placed reinsurance for Spanish insurers. Spain has been a growing market in Europe and Spain is home to one of the world's largest reinsurance corporations. It's a natural place for Bermuda's insurers to do additional business in the future."

The Spanish TIEA is expected to be signed by end of year, with Finance Minister Paula Cox extending an invitation to Spain's Minister to sign the agreement in Bermuda.

Currently, Bermuda has 15 signed TIEAs, most recently with the Netherlands Antilles.