Cox backed over external attacks

FRIDAY, AUGUST 17: Bermuda’s international business chiefs have backed Premier Paula Cox’s defence of the island after a UK MP said the island needed to tighten up its tax laws.

Richard Winchell, executive director of the Association of Bermuda International Companies (ABIC), and Bermuda Chamber of Commerce president Ronnie Viera both lined up alongside Ms Cox.

Mr Winchell said: “ABIC supports the Premier’s response.”

Ms Cox hit back after John Mann, a member of the House of Commons Treasury Select Committee accused Bermuda of helping companies avoid high tax bills in Britain — but sheltering under the UK defence umbrella.

Mr Mann told the UK’s Independent on Sunday newspaper that “if Bermuda or any other British dependency wants our help with defence, then it should stop operating this sort of tax policy.

“We are paying twice because we are paying for Bermuda.”

But Ms Cox said Bermuda had “no -intention” of changing its tax laws — and said that the island was a standard bearer for business transparency.

And she added: “I would also like to take this opportunity to remind Mr Mann that Bermuda pays all of its own bills, including the bill for Bermuda’s Governor.”

Mr Viera said: “I don’t know if this causes any concern – this is just one MP among many. We have the tax system we have and it’s a low tax system. In this instance, I certainly stand behind the Premier.”

“Somebody should point out to Mr Mann we are not a burden on the UK and never have been. We are an overseas territory of the UK and for him to say that Britain won’t defend Bermuda is ridiculous.”

The row broke out after US Republican presidential hopeful Mitt Romney was slammed for family investments in Bermuda – which led to Bermuda being branded as a “tax haven” by his opponents.

Mr Viera said: “The Romney thing is of more concern – it’s electioneering though and we just have to get through the US election, for a lot of reasons. It’s always a concern when Bermuda is bathed in a negative light.

“It’s one of those things that comes up every four years in America and it will hopefully go away.”

Mr Mann, a Labour backbencher from the north England, was speaking as he warned Internet search engine giants Google was likely to be called to appear before his committee after a row broke out over the firm minimizing its tax bills by channelling cash through Ireland to Bermuda.

Google’s tax bills

According to the Independent on Sunday, the UK Google operation cuts its tax bills, which amount to around $6 million a year on a turnover of $395 million, by employing its British operation as an agent of its Irish subsidiary.

The proceeds of sales made in the UK go to Ireland and commission of around 10 per cent is paid back to the UK operation, which is taxable once costs have been deducted.

Google Ireland than pays much of the money it makes to its Bermudian operation as a licensing fee. The process is legal under current UK tax laws although Mr Mann branded it “entirely improper and immoral”.

While Bermuda is represented by the UK in forums like the UN and EU and guarantees external security, the only tangible contribution to the island’s defence is occasional visits from the Caribbean-based Atlantic Patrol Task (North) ship, formerly the West Indies Guard Ship, which was downgraded in 2005 from a warship to a Royal Fleet Auxiliary vessel, part of the Royal Navy’s inhouse Merchant Marine, for much of the year.