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2025-05-04T16:15:00-03:00

Abir calls for Oxfam to correct errors

Oxfam is mistaken: Brad Kading of Abir

Global charity Oxfam should correct the report that ranks Bermuda as “the world’s worst corporate tax haven” as it is strewn with errors.

That is the view of the Association of Bermuda Insurers and Reinsurers, which represents many of the island’s largest international insurance companies.

Bradley Kading, president of Abir, said he concurred with the view of Bob Richards, the Minister of Finance, who said there “serial errors” in Oxfam’s report in its assessment of Bermuda.

Among the characteristics Oxfam attributes to Bermuda is a “lack of participation in multilateral anti-abuse, exchange and transparency initiatives”.

Mr Kading said this was well wide of the mark. “The writers seemed to have simply either looked at old assessments or failed to contact the Bermuda Government for updates on standards compliance,” he said. “The report is in error and should be corrected.”

Mr Kading added: “The report made mistakes in judging Bermuda’s actions on complying with international tax co-operation and transparency standards.

“The government is legally bound to assist other jurisdictions with taxpayer information that will assist them in collecting taxes they believe are due.”

Bermuda topped the list of Oxfam’s 15 “worst corporate tax havens”, ahead of the Cayman Islands and the Netherlands.

The charity found that US multinational companies reported $80 billion in profits in Bermuda in 2012 — more than their profits reported in Japan, China, Germany and France combined.

Bermuda has signed tax information exchange agreements with 43 jurisdictions. The TIEAs form a legal framework for transparency on taxation issues.

And as a signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, Bermuda has tax information exchange relationships with more than 106 jurisdictions, including all members of the G20 and the European Union.

The island has also signed an intergovernmental agreement with the US on its Fatca legislation that enables the US to keep track of its citizens’ financial holdings in Bermuda, as well as a Mutual Legal Assistance Treaty with the US.

Oxfam believes that an unusually low corporate tax rate should be one of the definitions of a tax haven. But neither the EU, nor the Organisation for Economic Cooperation and Development share this view.

Mr Kading said: “Bermuda has: an excellent track record in complying with individual requests for tax information; is party to the agreement for automatic exchanges of information; collects beneficial ownership information and shares it with UK law enforcement on 24 hours notice; and has joined the multilateral enforcement treaties.

“Finally, Bermuda is implementing the BEPS [Base Erosion and Profit Shifting] Country by Country reporting regime for 2016, reporting in 2017.”

BEPS is the OECD initiative that is aimed at multinationals being taxed in the places where their profits are made, rather than in low-tax jurisdictions elsewhere.

Oxfam believes the multinationals’ tax avoidance hurts the world’s poor, the people the charity works to help.

Mr Kading said Oxfam’s approach had taken an unusual approach in focusing on American multinationals.

“The Oxfam report is unusual because it focuses so heavily on the money held outside of the US by US multinational corporations,” Mr Kading said.

“This yet-to-be ‘repatriated’ income is of course a result of the unique US approach of taxing the global income of its multinational corporations.

“US tax will be paid on this income when it is returned to the US and incentives to force this action is a likely feature of the 2017 US tax reform legislation.

“The report also heavily focuses on several other elements of corporate tax regimes, something Bermuda does not have.”

He added: “Both the G20 and the EU will be working on lists of jurisdictions that are deemed to be ‘non-co-operative’ on tax law disclosure and enforcement.

“The Bermuda Government is working diligently on meeting those tests. The Bermuda community should assist the government in moving ahead in meeting these ever-changing tests on tax transparency, anti-money laundering and beneficial ownership registries. Abir members are committed to doing so.”