Brazil, Bermuda Agree TIEA

by Amanda Banks, Tax-News.com, London

16 June 2010

Bermuda’s Minister of Finance, Paula Cox has announced that the territory has completed negotiations for a bilateral tax information exchange treaty (TIEA) with the government of Brazil. Bermuda anticipates that the agreement will be signed later this year after both countries’ internal approval processes have been completed.

Commenting on the agreement, Minister Cox said that the proposed treaty with Brazil marks a major advance towards Bermuda’s strategic objective which was to conclude negotiation of tax information exchange agreements with the largest economies in Latin America. “As a BRIC country, a member of the G20 and a current focus of opportunity for Bermuda’s international reinsurers, Brazil is, for us, a key strategic relationship within South America,” she said.

“Bermuda in its capacity as a Vice Chair of the Steering Group of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes works very closely with Brazil, and we very much look forward to welcoming delegates from Brazil to Bermuda next year when we host the 2011 Global Forum. Moreover, currently, there are 126 entities in Bermuda with Brazilian interests, but we expect this number to grow exponentially as our economic and political ties with Brazil are strengthened and deepened,” Cox said.

Brad Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR) said Bermuda’s achievement in opening up the Brazilian reinsurance market was one of the greatest accomplishments of free trade advocates in the last several decades.

“Since the reinsurance monopoly was abolished, more than seven Bermuda reinsurers have established Brazilian operations. In turn, the previous Brazilian reinsurance monopoly is itself seeking to expand and diversify its business outside of Brazil. The TIEA with Brazil demonstrates good cooperation between the two jurisdictions,” Kading said.

Bermuda currently has 21 signed agreements with provisions for the exchange of information for tax purposes. Bermuda has signed TIEAs with the United States, Australia, United Kingdom, New Zealand, the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland, Greenland, Faroe Islands), Netherlands, Germany, Ireland, Netherlands Antilles, France, Mexico, Aruba, Japan, and Portugal. Further, Bermuda has a double taxation agreement with Bahrain.

The tax information exchange agreement provides for the exchange of tax information to assist both countries’ tax authorities in civil tax matters and in tax crime investigations, on certain conditions, in line with the OECD standard for transparency and tax information exchange.

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