Bermuda, BVI and Cayman sign up to global tax overhaul plan

Bermuda, the Cayman Islands and the British Virgin Islands are among 130 jurisdictions to agree to the outline of a two-pillar plan to overhaul the global tax system.

However, Barbados and St Vincent and the Grenadines are two of nine countries which did not come into agreement.

Bermuda has made known its concerns over the timeline for the project and about “technical and practical” aspects of the plans, which include a global minimum tax rate of at least 15 per cent.

The agreement came out of last Thursday’s meeting of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting.

The Organisation for Economic Cooperation and Development said that a detailed implementation plan together with remaining issues will be finalised by October.

The statement agreed upon by all but nine of the 139 Inclusive Framework members outlines proposed international tax system changes, designed to ensure that large multinational companies who book significant profits in low-tax jurisdictions pay more tax in the countries where they generate their revenue.

Besides Barbados and St Vincent and the Grenadines, the other seven countries which did not join the statement were Estonia, Hungary, Ireland, Kenya, Nigeria, Peru and Sri Lanka.

The Bermuda government said in a statement yesterday morning: “As a country committed to transparency, cooperation and high levels of compliance with international standards, the Government of Bermuda joined the Statement on a new framework for international taxation arising from the OECD meeting of July 1, 2021, and looks forward to supporting its ongoing technical discussions ahead of the meeting of G20 Finance Ministers in October 2021.

“Bermuda has been actively involved in ongoing discussions relating to this initiative to present positions that reflect the national interest and that of our various stakeholders. As part of that approach, we recognised the need to join with other members of the Inclusive Framework to reach this position supported by a significant majority of the membership,” it said.

The government said it had registered concerns, particularly in relation to the financial services sector and timeline for effective implementation.

“We fully intend to remain an active participant in the ongoing work of the Inclusive Framework to complete the development of an appropriate plan,” Finance Minister Curtis Dickinson said on Friday.

“We have noted areas of concern at a technical and practical level, which we look forward to working to resolve constructively in the months ahead,” he said.

CMC