Exchange of Information

The domestic Bermudan governing law in this matter is the International Cooperation (Tax Information Exchange Agreements) Act issued in 2005. This act establishes that any request of information must be subject to a judicial procedure before Supreme Court. Notwithstanding the foregoing, under section 4A, brought by Act Amendment of 2015, judicial procedure does not apply when applying an agreement that provides for automatic exchange of information.

On the international level, the United States and the United Kingdom (on behalf of its dependent territory Bermuda) exchanged instruments of ratification on 2 December 1988 of a United States–Bermuda tax convention

The convention has detailed provisions relating to mutual assistance in tax matters for the prevention of tax fraud and the evasion of taxes and to provide assistance, as appropriate, in carrying out fiscal laws other than those relating to tax fraud and the evasion of taxes. The convention specifically references the concern of Bermuda that the assistance might relate to persons not resident in either jurisdiction or matters that do not constitute a criminal investigation. The convention provides that where the United States requests assistance with respect to a matter which relates to a person not resident in either jurisdiction or which does not constitute a US criminal or tax fraud investigation, a senior official designated by the Secretary of the Treasury shall certify such request as being relevant and necessary for the determination of the tax liability of a US taxpayer, or the criminal tax liability of a person under the laws of the United States. In the case where a person is not resident in either jurisdiction, it shall be established to the satisfaction of the competent authority of the requested jurisdiction that assistance is necessary for the proper administration of justice and enforcement of the fiscal laws of the requesting jurisdiction.

Bermuda's obligation to provide assistance with respect to civil and criminal tax matters relating to taxable years of a taxpayer beginning after the entry into force of the convention will not be limited by any confidentiality restrictions of Bermudan law, other than those relating to solicitor-client privilege. With respect to matters relating to taxable years of a taxpayer beginning before the entry into force of the convention, Bermuda is not obligated to provide assistance if it would entail breach of an obligation to maintain confidentiality of information under the laws of Bermuda in effect on the date of signing of the convention. Confidential information would include only information protected by Bermudan statutory and common law. The convention specifically states that the common law at the relevant time would include solicitor-client privilege and banker-client privilege and that other common law rights to confidentiality would be determined by the courts of Bermuda.

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