Bermuda Signs TIEAs With South Korea, Turkey
Wednesday January 25 2012 | 03:04 PM

Tax information exchange agreements (TIEAs), which incorporate the internationally-agreed Organization for Economic Cooperation and Development standard for the exchange of information for tax purposes, have been signed between Bermuda and both South Korea and Turkey.

Bermuda's Premier, Paula Cox, signed the agreements with Mehmet Kilci, President of Revenue Administration for Turkey, and with Sook Kim, permanent representative to the United Nations for South Korea. It was disclosed that Bermuda now has tax agreements with a total of 32 countries, of which 15 have now been completed with G-20 member nations.

The TIEAs give the countries’ tax authorities a greater ability to exchange taxpayer information and to exchange that information on a wider range of taxes. They also provide that a tax authority cannot refuse to provide information solely because it does not require the information for its own domestic purposes, or because the information is held by a bank or similar institution.

A special arrangement was placed in the TIEA with Turkey with regard to the latter’s Corporate Tax Law, in order to combat tax evasion. According to this provision, every kind of payment made in cash or accrued on account to corporations resident or operating in the countries will be subject to 30% withholding tax regardless of whether those corporations are taxpayers or not, or whether those payments are taxable or not.

Cox disclosed that she was “pleased with the TIEA’s effect on Turkish corporate law as it relates to Bermudian entities doing business in Turkey.”

In addition, as regards the signing of the agreement between Bermuda and South Korea, both governments said that they foresaw the TIEA as increasing the opportunities for bilateral foreign direct investment between the countries.