India and Bermuda Conclude TIEA

by Phillip Morton, Investors Offshore.com

12 February 2010

Bermuda’s Minister of Finance, Paula Cox, has announced that the government has concluded negotiations on a Tax Information Exchange Agreement (TIEA) with India. When the agreement is signed it will allow both countries’ tax authorities to request tax information pertaining to criminal and civil tax matters.

The negotiations took place in New Delhi, India, on February 9-10 at the Ministry of Finance. The proposed TIEA between Bermuda and India will be signed upon completion of the two countries’ internal processes.

“Bermuda’s Ministry of Finance Treaty Unit is in New Delhi this week to attend meetings of the Organization for Economic Cooperation and Development (OECD) Global Forum Steering Group, in its capacity as Vice-Chair,” Cox explained in a statement released on February 10. “We took the opportunity to meet with the host of the Steering Group meeting for the purpose of negotiating a TIEA and to commence discussions of associated agreements for the advancement of Bermuda’s economic interests in the region in the days leading up to the Steering Group meeting.”

“Both the negotiations process, conducted bilaterally and in-person, and the agreement itself, reflects a deepening and strengthening of Bermuda’s strong relationship with India,” she added, continuing:

“Presently, Bermuda ranks as one of the highest providers in the world in terms of foreign direct inflows (FDI) to India. In fact, there are 120 entities in Bermuda with Indian interests. When this agreement is signed, it will further enhance investment opportunities between our two countries, and will further our efforts to negotiate TIEAs with members of the G20."

David Ezekiel, Chairman of the Association of Bermuda International Companies (ABIC) praised Bermuda’s achievement: “Coming just after the TIEA signing with Japan and conclusion of negotiations of a TIEA with Korea, the conclusion of negotiations of a TIEA with India is further good news for the Bermuda international business sector as all three of these countries have a growing involvement in our market. With the increasing liberalization of the Indian insurance sector, Indian insurers and reinsurers could, in the years ahead, become major buyers of protection from the Bermuda market.”

"India is one of the fastest growing and most powerful economies in the world,” said Cheryl Packwood, CEO of the Bermuda International Business Association. “Upon signing, this TIEA with India will enable Bermuda to develop greater economic and international business ties with an important nation, but as importantly it is indicative of the strong regulatory and tax standing that Bermuda has achieved over the past 50 years and further recognition that Bermuda is truly a distinct, credible and powerful player in the global economy. We appreciate the efforts of Bermuda’s Ministry of Finance in negotiating these treaties.”

Bermuda currently has 19 signed TIEAs, with: Japan, France, Germany, the UK, the US, Australia, Ireland, New Zealand, the Netherlands, the Nordic Group (including Denmark, Finland, Iceland, Norway and Sweden and their associated territories the Faroe Islands and Greenland), Netherland Antilles and Aruba, and Mexico. In addition to India, negotiations have been concluded with, among others: Canada, Spain, Belgium, Portugal, and South Korea.

Bermuda’s proposed TIEA with India includes all standard means to ensure due process is followed in tax information requests to Bermuda, including, for example, provisions to protect the confidentiality of information provided, as well as adhering to public policy, provisions related to protecting legal privilege, and anti-fishing provisions to ensure that requests for information from India are relevant to ongoing tax investigations being conducted by Indian authorities.

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