Updates on Bermuda Economic Substance Requirements

The ROC recently issued an industry notice announcing that the OECD has issued a guidance note with respect to entities that claim entitlement to exclusion from the economic substance regime on the basis that they are tax resident in another no (or only nominal) tax jurisdiction to the effect that:

1. the ROC should always reject for exclusion claims of tax residency in respect of the following jurisdictions: Anguilla, Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Turks and Caicos Islands and the United Arab Emirates; and
2. the ROC should only accept for exclusion claims of tax residency in respect of the following jurisdictions when sufficient proof exists in support of those claims: Guernsey, Isle of Man and Jersey.

Amendments will be made to the Economic Substance Act 2018 to reflect the above requirements.  In the meantime, entities which expect to be affected should make appropriate arrangements in anticipation of such changes.