Hamilton, Bermuda--June 15, 2010 -- Bermuda today (June 14) signed a bilateral agreement with Canada that provides for a full exchange of information on criminal and civil tax matters between the two countries. The signing of the Tax Information Exchange Agreement (TIEA) took place at a ceremony today at the Premier’s official residence at Camden. The TIEA was signed by the Hon. Paula A. Cox, J.P., M.P., Minister of Finance and Deputy Premier, and Canadian Consul General Daniel Sullivan.

Distinguished guests at the signing ceremony included Consul and Department of Finance Representative in New York Glenn Campbell, Honourary Canadian Consul for Bermuda Heather Conyers, Honourable Ministers of Cabinet, and local international business industry representatives.

Negotiations took place at Bermuda’s Ministry of Finance, in Hamilton, the week of April 30th, 2009.

In signing the TIEA, Canada will extend an important benefit to Bermuda that previously had been conferred only to countries with which Canada has a double tax treaty in force. It may be noted that dividends, of foreign affiliates resident in Bermuda, that are paid to their Canadian parent companies out of the active business income earned in Bermuda, will be exempt from Canadian taxation. This will be particularly useful to Bermuda’s captive insurance industry.

Commenting on the agreement Minister Cox said, “Bermuda and Canada have enjoyed a strong and fulsome relationship over the past 150 years, covering a wide range of interests including economic development, education, health care and tourism. This could be one of Bermuda’s most significant TIEAs to date. Canadian companies are hugely involved in the captive, hedge fund and private equity areas of the International Business sector and more recently in the banking arena. Conversely, a large percentage of Bermudian youth complete post-secondary education in Canada. In fact, there is a Memorandum of Understanding between the government of Bermuda and the government of Canada that guarantees Bermudian graduates of Canadian universities to work in Canada for two years to gain valuable international experience. Even today Bermudian students may seek assistance from Bermuda Department of Immigration on how to utilize the benefits of that MOU. Finally, our corporate service providers utilize Canada’s highly educated workforce and institutions.”

“In some cases, our government has worked directly with provincial authorities to deepen the relationship further. In January of last year, Nova Scotia Premier Rodney J. MacDonald visited Bermuda in order to sign a Memorandum of Understanding (MOU) to formalize a partnership between the Governments of Nova Scotia and Bermuda. That MOU paved the way to forge new and mutually-beneficial opportunities, particularly in the areas of tourism, financial services and enhanced transportation links.”

“Bermuda, in its capacity as a Vice Chair of the Steering Group of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes works closely with Canada, and we very much look forward to welcoming delegates from Canada to Bermuda next year when we host the 2011 Global Forum.”

Leila Madeiros, Senior Vice President & Corporate Secretary of the Association of Bermuda Insurers and Reinsurers (ABIR) said of the signing of the agreement: “Canada and Bermuda have had a long standing insurance connection that spans over many decades. “Both countries have benefited from an ongoing relationship that evolved from the early days when prominent Canadian life companies provided life policies to Bermudian residents through Non-Resident Insurance Undertakings (NRIUs) to captives to the provision of reinsurance by Bermuda reinsurers to Canadian stakeholders.”

Bermuda has now signed 22 agreements with provisions for the exchange of information for tax purposes. Bermuda has signed TIEA’s with the United States, Australia, United Kingdom, New Zealand, the Nordic countries (Sweden, Norway, Finland, Denmark, Iceland, Greenland, Faroe Islands), Netherlands, Germany, Ireland, Netherlands Antilles, France, Mexico, Aruba, Japan, and Portugal. Further, Bermuda has a double taxation agreement with the Kingdom of Bahrain.

The agreement with Canada includes all standard means to ensure due process is followed in tax information requests to Bermuda, including, for example, provisions to protect the confidentiality of information provided, as well as adhering to public policy, provisions related to protecting legal privilege, and to ensure that requests for information from Canada are relevant to tax investigations being conducted by Canadian authorities.