Forging relationships: Wang Li, deputy commissioner of the State Administration of Taxation of China, left, and Bermuda Premier Paula Cox, right, sign the tax ­information exchange agreement between their nations at Camden yesterday. It is the island’s 24th such deal and China’s sixth. *Photo by Kageaki Smith
Forging relationships: Wang Li, deputy commissioner of the State Administration of Taxation of China, left, and Bermuda Premier Paula Cox, right, sign the tax ­information exchange agreement between their nations at Camden yesterday. It is the island’s 24th such deal and China’s sixth. *Photo by Kageaki Smith

Bermuda yesterday signed a Tax Information Exchange Agreement with economic powerhouse China.

Premier Paula Cox and Wang Li, deputy commissioner of the State Administration of Taxation of China, finalised the agreement at Camden.

A delegation from the People’s Republic of China joined Government Senators, Ministers and Opposition leaders at the ceremony.

The document is Bermuda’s 24th TIEA and China’s sixth.

The Asian nation is the second largest trading country in the world, with the biggest population.

Leadership

Bermuda may be one of the smallest countries in the world but its presence in international finance is considerable.

Ms Cox said: “Bermuda performs above its weight class and that is why our peers in the Organisation for Economic Cooperation and Development (OECD) Global Forum chose Bermuda to sit with China and Germany in the leadership position as the three joint Vice Chairs of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.”

There are 680 entities in Bermuda with a Chinese connection and Ms Cox said the TIEA will help to strengthen political and economic ties.

She added: “Certainly it helps to facilitate our outreach of interest.

“In the negotiation of this TIEA, a framework was established for deepening economic and commercial relations between our two jurisdictions and in facilitating our outreach to other markets within Asia.

“Both the independent regulator, the Bermuda Monetary Authority, and the Bermuda Stock Exchange will be using this opportunity as a springboard to further their ties with their regulatory counterparts.”

Ms Cox said there is also much to gain in terms of tourism and business opportunities.

She added: “Much will flourish from this signing.”

Ms Cox also noted that the first Bermuda moongate originated in China. A local sea captain is said to have copied the design of a circular ornamental gateway and brought it to the island in 1860. Ms Cox said: “You can see how the circle of life and the connections are so important.” Mr. Li said: “It is my great pleasure today to sign this agreement between the People’s Republic of China and the Government of Bermuda.”

He added that with greater global economic competition, there were more calls for transparency in taxes.

Mr. Li also said that China’s relationship with Bermuda had become closer through the countries’ roles in chairing the OECD Global Forum.

He added: “We have done a lot of work together in the past year for improving transparency and tax information for tax purposes globally.

“The signing of this bilateral TIEA will set the larger foundation for mutual assistance for tax administration.”

Mr. Li said it would also further investment ties and “mutual trust”.

Ms Cox said the TIEA negotiations “did not touch on, cover or reflect at all the issue of the (Chinese) Uyghurs”. In June last year, four Chinese Uyghurs were released from U.S. detention camp Guantanamo Bay and resettled in Bermuda, sparking a diplomatic row.

Ms Cox’s predecessor, Premier Dr. Ewart Brown, struck a deal with the U.S. without consulting Bermudians or the U.K., which has responsibility for foreign policy and security.

China has demanded the return of all Uyghur detainees from the U.S. but there are fears the minority Muslims may be tortured or executed if sent back.  

• TIEAs are bilateral agreements under which two countries agree to cooperate on tax matters through an exchange of ­information. TIEAs avoid double taxation on items. This includes income, inheritance, profit and capital gains.

• Under a TIEA partners must have legal and administrative frameworks in place to support exchange of information. It cannot be hindered by restrictions such as bank secrecy laws.

• TIEAs were developed by the Organization for Economic Cooperation and Development (OECD). The TIEA grew out of efforts to address harmful tax practices and enhance investment opportunities between countries.

• Bermuda has now signed 24 TIEAs.