Bermuda Once Again Refutes Tax Haven Claims

by Mike Godfrey, Tax-News.com, Washington

09 January 2003

Both the Australian Taxation Office and the Bermudian Ministry of Finance this week denied claims that Bermuda has become a 'magnet' for illegal or undeclared Australian assets.

Speaking recently, assistant treasury spokesman for the Opposition ALP, David Cox cited Australian Taxation Office figures which named Bermuda as one of the most popular destinations for Australian funds and investments.

However, according to the Bermuda Royal Gazette, the ATO figures appear to have been misrepresented by the Australian Labor Party. Reporting on Tuesday, the newspaper revealed that: 'only a fraction of the $5.01 billion (the amount estimated to have left Australia for offshore jurisdictions last financial year) was lost tax revenue...much of the money flowing to tax havens is used for legitimate purposes such as shipping and insurance.'

'There are genuine non-tax offensive transactions involving some of these countries on which tax is properly paid,' ATO first assistant commissioner, Kevin Fitzpatrick confirmed.

Bermuda's Ministry of Finance, clearly weary of defending the jurisdiction against such allegations, responded by observing that: 'Once again, it appears that Bermuda's good name is being cast about rather loosely.'

'Bermuda is not a tax haven,' the Royal Gazette quoted Financial Secretary, Donald Scott as asserting this week. He continued: 'Bermuda's taxation system is not designed to attract mobile capital from other countries. Highly reputable companies come to Bermuda to conduct legitimate business because of our reputation as a 'blue chip' jurisdiction for international business.'

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