Further amendments to the island’s economic substance regime were approved yesterday as the island worked to avoid a return to the EU’s blacklist.

Curtis Dickinson, the Minister of Finance, said the Economic Substance Amendment Act 2021 was designed to expand the definition of “partnership”.

Economic substance refers to a transaction that has a purpose besides the reduction of a tax liability.

He explained the move was made to ensure Bermuda’s regime met the requirements of the EU, but that “purely local” partnerships will not be included.

Mr Dickinson said: “The scope of the regime must be expanded to include all forms of partnerships, not just those that have elected to have separate legal personalities.”

He added that dialogue about the legislation was continued and further changes were made “on the floor” to tackle further concerns.

Mr Dickinson said the e-filing system – the method through which economic substance information was filed – would be modified to allow for the necessary filings to be made.

He added: “The frameworks are live documents and they continue to evolve.

“At the same time, I have seen very few instances in the past 31 months where any body has sought to narrow the scope.

“It has only been in one direction – to broaden the scope of oversight.”

Cole Simons, the Leader of the Opposition, backed the amendment, which he said was a by-product of an international “crackdown” on offshore jurisdictions.

He added that international business bodies were “watching closely and doing what is needed to be done to make sure Bermuda’s reputation as a jurisdiction are not compromised”.