Thursday 27 June 2019

Bermuda vows to keep zero tax rate

Finbarr Flynn

Bermuda and Ireland are being swept up in a "vigilante approach" to corporate taxes by bigger nations seeking to curb deficits, Bermuda's Finance Minister Bob Richards said as he promised to keep the country's zero tax rate.

"We have never had corporate income tax and we're not going to," Mr Richards said in a telephone interview.

"Ireland is swept up into this as well but it is just important for us to state our case and not be overwhelmed by the kind of global politics and rhetoric that we have seen."

Corporate tax codes in Ireland and Bermuda have drawn criticism in recent weeks as US and UK politicians investigated structures used by some of the world's largest companies including Apple and Google to cut their tax bill. US senators Carl Levin and John McCain said last week that Ireland "meets a common-sense definition of a tax haven" after the nation disputed some of the findings in a senate investigation into Apple's affairs.

Apple has $102bn in offshore accounts and shifted billions in profits away from the US into affiliates based in Ireland, where it negotiated a tax rate of less than 2pc, according to a report by a senate panel last month.

Companies can avoid paying levies in Ireland almost completely by setting up units that don't fall in any tax jurisdiction, according to the panel report.

Google and Apple executives say they have done nothing wrong and are paying all taxes. Google avoided about $2bn in worldwide income taxes in 2011 by shifting $9.8bn in revenues into a Bermuda shell company, filings show.

By legally funnelling profits from overseas subsidiaries into Bermuda, Google cut its overall tax rate almost in half. (Bloomberg)

Irish Independent

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