TIEA establishes a framework for the exchange of information between countries to support the management and enforcement of tax legislation. These agreements are generally based on the international standard of the Organisation for Economic Co-operation and Development (OECD) and are seen as an important tool to prevent tax evasion in cases where there is no comprehensive tax treaty between the countries concerned. The issue of tax information exchange agreements (TIEA`s) is rightly a hot topic in the insurance industry. Bermud`s Ministry of Finance says TIEA will enter into force once the two governments have completed their respective internal procedures for ratifying the agreement. A tieA request for information model has been developed to assist the relevant authorities of TIEA partners in requesting information. It is available in English and French as well as in Spanish, German, Italian, Japanese, Korean and Turkish. Bermuda has signed its 12th Tax Information Exchange Agreement (TIEA), meaning it is no longer considered a tax haven under OECD guidelines. The exchange of information on request was completed by an automatic procedure on 29 October 2014.  The automatic process must be based on a common reporting standard. UK HMRC has published a new agreement on the exchange of tax information with Bermuda, signed by the exchange of letters by the UK on 19 June 2017 and by Bermuda on 27 June. The new agreement replaces the 2007 exchange agreement between the two jurisdictions and applies retroactively to tax periods beginning December 4, 2008 or after December 4, 2008, although the automatic exchange applies from January 1, 2016. One of the main objectives of the new agreement is the automatic exchange of financial account information under the OECD Common Reporting Standard, for which a separate agreement on the competent authority was also signed in June (pre-registration).
Jurisdictions can also use the text of the articles in the model protocol if they wish to include the automatic and spontaneous exchange of information in a new TIEA. The agreement itself provides for the exchange of tax information between the two countries in order to promote greater transparency, cooperation and accountability in international taxation – principles advocated and proclaimed by the Organisation for Economic Co-operation and Development. The agreement between the two countries will help put Bermuda on the “white list” of Canada`s tax cooperative domiciles, with the signing of the agreement already leading to a significant increase in the number of Canadian companies that consider Bermuda a new country of origin in captivity.