A global agreement on minimum corporate tax rates has approved an exclusion for the island’s international insurance industry.

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Minister of Finance Press Statement Oct. 14th 2021.pdf

Curtis Dickinson, the minister of finance welcomed the carve-out by the Organisation for Economic Co-operation and Development and said it was something Government had pushed for during multilateral negotiations on minimum corporate tax rates.

Mr Dickinson added: “Our work to protect Bermuda’s interest requires our involvement with several regional and international bodies on a variety of initiatives that can significantly impact on Bermuda’s future.

“In this regard, global tax matters have increasingly greater focus.

“More recently we have provided updates on the OECD G20 initiative to combat the base erosion of countries’ tax revenues caused by corporate profit shifting, commonly referred to as Beps.”

Mr Dickinson, whose comments on taxation start at 9:35 on the video, said: “We’ve actively participated in discussions on these matters to achieve the best outcome for Bermuda.

“From Bermuda’s perspective, we did achieve some of our objectives under Beps’ two pillars.

“We certainly did not obtain all that we were seeking, however it is important to highlight that not even the G20 countries got everything they wanted from this initiative.

“Our key objective under Pillar One, which relates to the redistribution of tax income, was to achieve an exclusion for our international business financial services sector.”

Mr Dickinson added that, although technical details had still to be ironed out, the Government was “very pleased with this outcome”.

Pillar Two focused on a global minimum tax rate, which was set at 15 per cent.

Mr Dickinson said: “That rate has now been established as the global minimum rate under this framework.

“The agreement requires that it be applied at a jurisdictional level to multinational entities with revenues exceeding 750 million euros.”

He added discussions to fine tune the agreement continued but were expected to be settled by next month.

Mr Dickinson added: “I don’t know how it’s going to work in Bermuda yet – we still have to get all the details.

“Countries are not required to embrace or implement the 15 per cent tax rate, however corporations are obliged to pay it through a taxing authority.

“So what we are going to do is we’re going to work with industry around the final product and determine a way that works best for Bermuda in the interests of the country and our stakeholders.”

Mr Dickinson explained: “This gives the Bermuda Government the flexibility to confer with our industry stakeholders and with the Tax Reform Commission, when that commission is embodied, to develop what works best for Bermuda and its various constituents within the new international standard on tax co-operation.

“As noted earlier, Bermuda has been an active participant in the international discussions on this initiative, and we have had extensive dialogue with industry throughout the process.

“They have provided invaluable input, and we look forward to continuing our work together, as we progress the work on this important matter.”