Bermuda signs new tax agreements with Turkey & Korea

By added on 24/01/2012

Bermuda today [Jan. 23] signed Tax Information Exchange Agreements [TIEA] with both Turkey and the Republic of Korea, reports Bernews.

The agreement was sıgned by Mehmet Kilci, Presıdent of Revenue Admınıstratıon for Turkey and Premier and Finance Minister Paula Cox.

A Government spokesman said the TIEA provides a full exchange of informatıon on crımınal and legal tax matters between Bermuda and Turkey and is an ımportant step ın reinforcing the commitment of both countries to the internationally agreed tax standard.

Upon entry into force of thıs agreement, ınformatıon relatıng to dırect taxes of every kınd and descrıptıon needed by the tax audıtors of one country can be requested from the competent authorıty of the other country. Also, thıs agreement provıdes an opportunıty for the representatıves of the two countrıes to make tax examınatıon, contact wıth the related persons, and attend a tax examınatıon carrıed out ın the other state.

A special arrangement was placed in the Turkish Corporate Tax Law in order to combat with tax evasion.

According to this provision, every kind of payment made in cash or accrued on account to corporations resident or operating in the countries to be announced by the council of ministers will be subject to 30 per cent withholding tax regardless of whether those corporations are taxpayers or not, or whether those payments are taxable or not.

Because of the fact that thıs agreement between Turkey and Bermuda wıll provıde these two countrıes wıth effectıve exchange of ınformatıon, the mentıoned provısıon ın our domestıc law prescrıbıng a heavıer duty shall not be ımplemented for Bermuda.

Premier Cox stated, “I am pleased with the TIEA’s effect on Turkish corporate law as it relates to Bermudian entities doing business in Turkey.”

Brad Kading, president of the Association of Bermuda Insurers & Reinsurers — the local industry’s public policy arm — commented, “We are pleased at Bermuda’s accomplishments of signing a TIEA with the Government of Turkey. Turkey is an

important G20 nation with a growing economy and a gateway to other emerging markets.”

The Premier announced that Bermuda also signed an agreement with Republic of Korea today. The Tax Agreement was signed at the Korean Mission in New York. Signing for the Republic of Korea was Ambassador Sook Kim Permanent Representative to the United Nations [UN].

Bermuda has signed 32 Tax Agreements of which 15 Tax Agreements are with members of the G20.

Premier Cox said, “The value of signing this Tax Agreement is twofold as we see this agreement as enhancing opportunities for future foreign direct investment between our two countries in cementing the relationship between Bermuda and Korea, and this Tax Agreement acts as a proactive pre-emptive measure as Bermuda will be exempt from any future legislative measures.

“Bermuda’s treaty with Korea is another example of Bermuda moving swiftly to expand upon our role in the global financial network, to strengthen and deepen our relationships with other financial centres.”

George Hutchings, chairman of ABIC praised Bermuda’s achievement, “The signing of the TIEA with Korea will provide significant protection for companies and individuals in Bermuda from any potential counter measures Korea may introduce against countries that do not meet accepted transparency standards.

“Korea is fast becoming an economic powerhouse in the global economic landscape and the signing of the TIEA with Korea represents substantial progress. The Ministry deserves congratulations on its continuing efforts on behalf of the Bermuda, its residents and the companies that operate here.”

Cheryl Packwood, Chief Executive Officer [CEO] of Business Bermuda said, “Korea is one of the world’s fastest growing and most robust economies.

“Reaching this agreement is yet another example of Bermuda’s ability to work with other countries to establish a mutual understanding of our tax and regulatory approaches and reach agreements that will ensure greater cooperation and enhanced international business opportunities for our two countries working together.

“We have tremendous respect for Korea and its business community and are hopeful that this agreement establishes a foundation for additional cooperation and economic progress.”