Bermuda Signs a CbC Tax Reporting Agreement with the United Kingdom

David Burt, Bermuda's premier and minister of finance, on November 29 signed a country-by-country (CbC) Competent Authority Agreement with the United Kingdom. This important tax agreement completes the Organization for Economic Co-operation and Development (OECD) base erosion and profit shifting tax transparency package between Bermuda and the United Kingdom.

The agreement enables the automatic reporting of corporate income on a country-by-country basis for UK-related transfer pricing enforcement purposes. Bermuda is the first UK Overseas Territory to sign a CbC Competent Authority Agreement with the United Kingdom. 

As stated on the OECD website, "Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS."

Similar to individuals under the Common Reporting Standard, corporations must also automatically report financial information to Bermuda authorities. Any reported UK-related income will be shared automatically with UK tax authorities. 

Premier Burt said, "I am pleased to sign this important agreement with the United Kingdom on behalf of the people of Bermuda. We are the first Overseas Territory to sign the agreement, which further solidifies Bermuda's position as a global leader in international tax transparency. Bermuda remains a jurisdiction with an excellent reputation for quality. We continue to demonstrate leadership in global tax transparency, and we encourage other countries to meet the 'Bermuda Standard.'" 

(From left in photo above, Premier David Burt shakes hands with John Shuker, head of international collaboration and transparency, after signing a CbC Competent Authority Agreement between Bermuda and the United Kingdom. Photo is courtesy of the Government of Bermuda.)