EOI on request receiving and checking a request Bermuda

OECD MANUAL ON THE IMPLEMENTATION OF EXCHANGE OF INFORMATION PROVISIONS FOR TAX PURPOSES Approved by the OECD Committee on Fiscal Affairs on 23 January click on (1) Exchange of Information on Request, andExchange of Information on Request go to Step 2: Receiving and checking a request.

Bermuda’s EOI Unit The Treaty Unit within the Ministry of Finance administers and manages EOI requests. It has a budget for 2012/2013 fiscal year set at $571,000 and at present two dedicated staff receive, administer and manage requests for information under DTCs and TIEAs. A third member of the Treaty Unit is currently on secondment. We are confident that the two dedicated staff currently handling EOI requests can service the existing (and projected future) numbers of EOI requests. The two dedicated staff currently handling EOI requests are; the Assistant Financial Secretary, Mr. Wayne Brown who has been involved in EOI requests since 2003 including numerous successful court defences against judicial challenge by USA tax payers under the TIEA with the USA where some Bermuda court cases went as far as the Court of Appeal and one went as far as the Privy Council in London…providing experience and legal precedents for EOI for Bermuda’s domestic legislation especially as the Courts ultimately have upheld the Minister’s power under EOI. the Research Officer, Mr. Dennis Simons who has handled requests for information since joining the Ministry in April Mr. Simons was also responsible for obtaining the signing of the majority of CAAs signed to date which has facilitated the quicker processing of EOI requests with the recommended EOI templates. Every EOI request is consulted with Mr. Brown prior to Mr. Simons exercising the necessary next steps.

Requested jurisdictions with no income tax regime When reviewing a request in accordance with Step 2:” Receiving and checking a request”, remember the following if you are the requested jurisdiction and you do not have an income tax regime; In almost every EOI request the information will be with a third person who is outside of the Government (a company, nominee, CSP, partnership, etc) because Bermuda does not collect income tax. In Bermuda The MoF issues an EOI Notice to third persons who are outside of the Government, obligating them to provide the requested information within a specified time, as facilitated for in domestic legislation or practice. Therefore unlike in income tax regime requested jurisdictions the matter of “Rights and Safeguards” arise in every request received form a treaty partner and need to be effectively managed. To minimise the risk of Rights and Safeguards issues arising unnecessarily the Treaty Unit in Bermuda reviews the EOI Notice against the original request and the TIEA for legal correctness and seeks the approval of the Attorney General’s Chambers to the text of our Notice before the Minister of Finance signs the EOI Notice which is then delivered by the Treaty Unit to the person in Bermuda believed to be in possession or control of the information.

Request must comply with the TIEA Checking the Request against the TIEA is made easier if 1.-the requesting country in its request answers each of items (a) to (g) of paragraph 5 of Article 5 of the Model TIEA or its equivalent in the particular TIEA (a mutually agreed request template is best). 2.- however if the request falls short consult with the requesting country and process the request where it complies with the TIEA. 3.- the information requested should be forseeably relevant to the tax payer, if it is not you would need to consult with the requesting country. 4.- the names of persons (companies and CSPs) in your jurisdictions mentioned in the request should be accurate. We check with our Bermuda Registrar of Companies and advise the requesting country of any inaccuracies in names so that they are corrected before we serve a Notice on the company or CSP for the information.

Last points If the request is not in your countries language and if you are not an income tax regime country you should ask for an official translation from the requesting country competent authority. Do not have it translated by anyone in your jurisdiction. If the request does not state it is a civil or criminal tax matter or an “all other matters” you should ask for confirmation as many entry into effect articles in TIEAs distinguish between civil tax matters, criminal tax matters and all other matters.