Offshore financial centre Bermuda has created a tax information exchange agreement (TIEA) with Japan, its 19th so far. A ceremony took place in London at the Japanese Embassy where the Finance Minister of Bermuda, Paula Cox, and Japan’s Charges d’affaires met to sign the documents for the bilateral agreement.
Japan and Bermuda already have strong ties with much of Japan’s insurance industry located in Bermuda and in turn selections of Bermuda’s businesses have premises in Japan. The actual agreement enables a complete disclosure of any information necessary with regards to tax issues and any criminal investigations that may be underway. The plan also includes a double-taxation agreement to aid pensioners and students in Bermuda.
This follows calls for the OECD to examine and potentially improve its standards of information exchange. There are fears that current procedures may not be tough enough on businesses and people who attempt to hide money via offshore financial centres. This agreement takes Bermuda ahead of the Cayman Islands and the British Virgin Islands in terms of tax agreements, as they have 13 and 16 respectively.
Ms Cox spoke proudly of the agreement: “I am delighted today to sign the tax information exchange agreement with Japan, and particularly pleased to note that Bermuda is Japan's first TIEA partner. Negotiations with Japan were concluded in Bermuda in June 2009. As the first country with which Japan negotiated, the delegation stated at that time that Japan intended to use the product of its negotiations with Bermuda as a model for all future negotiations with other financial centres for TIEAs. This was a tremendous compliment for Bermuda, which is looked to as a most respected and advanced financial jurisdiction with which a country can base its work.”
The chairman of the Association of Bermuda International Companies, David Ezekiel, spoke further on its extra benefits: "Japan has a major involvement in the Bermuda market by way of ownership in the international business sector and in trading with Bermuda-based companies. The treaty contains many useful benefits not only for the business sector but for individuals, including students who might be travelling to Japan for studies."
The agreement sees Japan join Australia, Ireland, New Zealand, the Netherlands, France, Germany, the UK, Denmark, Finland, Iceland, Norway and Sweden, Antilles, Aruba and Mexico and others as countries who have reached information exchange agreements with Bermuda. There have also been discussions with Canada, Spain, Belgium, India and Portugal and all four are expected to sign similar agreements in the coming months.