Bermuda TIEAs: How Tax Information Exchange Works

Tax Information Exchange Agreements in Bermuda: An OverviewCopy link to section

Tax information exchange agreements in Bermuda form the backbone of how the jurisdiction cooperates with foreign tax authorities, a framework built and administered under the International Cooperation (Tax Information Exchange Agreements) Act 2005. These agreements let a foreign government request specific tax information from Bermuda when it is investigating a tax matter, and they sit alongside the broader Multilateral Convention that Bermuda has joined for the same purpose. The regime matters to any non-resident who owns a Bermuda company or holds an account with a Bermuda financial institution.

This article explains what a TIEA is, how many Bermuda has signed and with whom, the law that governs them, the scope and process of a request, the confidentiality protections involved, and what all of it means in practice for a foreign owner. It is most relevant to overseas business owners, investors, and the advisers assessing exposure to cross-border information exchange.

What a TIEA Is and How It Differs from a Double Tax TreatyCopy link to section

A TIEA provides for the exchange of information on request relating to a criminal or civil tax investigation, or to civil tax matters under examination. The instrument exists for situations where a full double tax agreement is not appropriate, typically because one party levies no, or low, taxes on income or profits.

These agreements are narrower than double tax treaties in scope but far more detailed on the mechanics of information exchange. A double taxation avoidance agreement aims chiefly to prevent the same income being taxed twice, and may carry exchange provisions as a secondary feature; a TIEA is built around exchange alone.

One distinction is decisive for a foreign owner. A TIEA does not trigger automatic, ongoing data flows between the two signatories; information moves only on a specific, justified request, never aimlessly or by sweep.

The instrument itself came into use in 2002, following the 1998 OECD report on harmful tax practices. Bermuda holds only one full double tax convention, signed with Bahrain on 22 April 2010 and in force from 29 January 2012; every other exchange relationship runs through a TIEA or the Multilateral Convention.

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Bermuda's TIEA Network: How Many Agreements and With Which CountriesCopy link to section

Bermuda built its bilateral network early and deliberately. By 2011 it had agreements in force with France, Germany, the United Kingdom, and the United States, the four G20 voices then most vocal against tax havens.

The oldest of these long predates the modern model. The United States–Bermuda TIEA was signed at Washington on 2 December 1988 and is implemented domestically through the USA–Bermuda Tax Convention Act 1986, with Article 3 authorising the exchange of information for tax purposes.

Beyond these, the firm's counterparties include Ireland, New Zealand, the Netherlands, Mexico, Japan, Portugal, and the Nordic Group of Denmark, Finland, Iceland, Norway, and Sweden together with the Faroe Islands and Greenland. Bermuda has signed dozens of bilateral instruments in all and counts the United States and more than forty other jurisdictions among its exchange partners.

The single most important point about the network is that it has stopped growing in bilateral form. New bilateral TIEAs are no longer being negotiated, because the Multilateral Convention now operates as the working multilateral framework; for the full list of exchange partners, the Bermuda Government points readers to the OECD's list of participating jurisdictions.

The Legal Framework: Bermuda's International Cooperation (Tax Information Exchange Agreements) ActCopy link to section

The core statute is the International Cooperation (Tax Information Exchange Agreements) Act 2005. It is supplemented by the Common Reporting Standard Regulations 2017, which set out the obligations Bermuda Reporting Financial Institutions must meet for automatic exchange.

For the United States relationship, a separate and earlier basis applies. The USA–Bermuda Tax Convention Act 1986 governs that exchange alongside the 2005 Act and the CRS Regulations.

Automatic exchange was bolted onto the principal Act later. The 2015 amendment inserted section 4A, requiring persons to comply with the terms of any automatic exchange-of-information agreement.

Oversight of the regime has been consolidated. Responsibility for automatic exchange of information has been transferred to the Corporate Income Tax Agency, designated as the Competent Authority under both the 2005 Act and the 1986 Act for CRS and country-by-country reporting; this body replaced the Ministry of Finance in that role and also absorbed the economic substance functions previously held by the Registrar of Companies.

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Scope of Information Covered Under a Bermuda TIEACopy link to section

The reach of a request is wide but tethered to a tax purpose. Competent authorities exchange information relevant to the administration and enforcement of the domestic tax laws covered by the agreement, including material going to the determination, assessment, and collection of taxes, the recovery and enforcement of tax claims, and the investigation or prosecution of tax matters.

The governing test, drawn from the OECD Model that Bermuda follows, is whether the information is "foreseeably relevant" to those purposes. Both civil and criminal tax matters fall within scope, and criminal-matter information must be exchanged whether or not the conduct would also be a crime under Bermuda law.

Residency offers no protection. Information is exchanged without regard to whether the person it relates to, or the party holding it, is resident in a contracting party.

A specific rule applies where the target is resident in neither jurisdiction. In that case the requesting party must establish the necessity of the information for the proper administration and enforcement of its own tax law. Rights and safeguards available to persons under Bermuda law or administrative practice continue to apply, so long as they do not unduly obstruct or delay effective exchange.

How an Exchange of Information Request Works in PracticeCopy link to section

The model permits exchange "upon request" only, and surrounds that request with strict conditions designed to block fishing expeditions. A requesting authority must set out its request with specificity, detailing the nature of the information sought and the substance of the evidence supporting it, so that a genuine and strong case is established before any information moves.

Domestically, the Corporate Income Tax Agency may exercise its powers to assist a foreign tax authority, provided the Minister is satisfied that the request complies with the 2005 Act and, for the United States, the 1986 Act. The Agency may require any person to furnish such information as it reasonably needs to discharge its functions.

The Bermuda courts have tested these mechanics. Two 2014 Supreme Court decisions, Ministry of Finance v E, F, H & O and Ministry of Finance v O, arose directly from requests under the 2005 Act, and as the agreement count climbed past thirty the courts saw a wave of judicial review challenges to the legality of requests. Earlier case law, including Lewis & Ness v Minister of Finance (2004), considered whether a taxpayer is entitled to see the foreign government's request in the interest of basic fairness.

One point of discretion concerns the requesting authority itself. An OECD Global Forum peer review recommended that Bermuda follow a policy of not disclosing even the identity of the foreign tax authority to the requested party.

No statutory processing deadline has been published in the material reviewed. The Global Forum's EOIR standard expects a response, or at least a status update, within 90 days.

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Confidentiality and Safeguards for the Information DisclosedCopy link to section

Information received under a Bermuda TIEA is treated as confidential. It may be disclosed only to persons or authorities, including courts and administrative bodies, concerned with the assessment, collection, enforcement, prosecution, or determination of appeals on the taxes covered, and used only for those purposes.

Disclosure in open court proceedings or in judicial decisions is permitted. Onward disclosure to any other person, entity, authority, or jurisdiction requires the express written consent of the Competent Authority of the requested party.

These limits have been argued in litigation. In the Bunge proceedings the Ministry of Finance contended that the confidentiality provisions of the 2005 Act and the TIEA, read with OECD guidance, barred it from disclosing a requesting country's confidential request.

The OECD standard reinforces this at the system level. Partners must maintain laws ensuring data confidentiality and operate information security management arrangements meeting international good practice, and the Global Forum runs multilateral assessments to confirm that partners apply the standards continuously. Country-by-country reports carry the same confidentiality and use restrictions, and a breach of the domestic obligations can attract penalties of up to $10,000.

How TIEAs Fit Within OECD Transparency StandardsCopy link to section

The Global Forum promotes two agreed standards: Exchange of Information on Request and Automatic Exchange of Information. Bilateral TIEAs are the primary instrument for the first; CRS and FATCA drive the second.

Bermuda sat at the drafting table for the model that underpins most TIEAs. The OECD Model TIEA, published in 2002, was produced by a working group that included a Bermuda delegate alongside representatives from Aruba, Bahrain, the Cayman Islands, Cyprus, the Isle of Man, Malta, Mauritius, the Netherlands Antilles, the Seychelles, and San Marino. From the 2009 Mexico City meeting, Bermuda served as Vice-Chair of the Global Forum's Steering Group, the only small jurisdiction in that leadership.

Peer review is the mechanism that holds the standard in place. The Global Forum rates jurisdictions as Compliant, Largely Compliant, Partially Compliant, or Non-Compliant; the OECD has described Bermuda as a "key player" in international tax cooperation, though the specific current second-round rating was not retrievable in the public material reviewed.

On the automatic side, first CRS reporting by Bermuda institutions fell due by 30 August 2017, with the first exchanges with partner jurisdictions expected by the end of September 2017. The reportable list continues to widen: in 2025, Armenia, Georgia, Moldova, and Ukraine were added for the 2024 reporting period.

For the United States, exchange runs through a Model 2 FATCA intergovernmental agreement signed on 19 December 2013; Bermuda implemented Model 2 agreements with both the United States and the United Kingdom.

What the TIEA Regime Means for a Non-Resident OwnerCopy link to section

If you own a Bermuda entity or hold an account with a Bermuda financial institution, you are potentially within reach of information exchange in both directions, on request through a TIEA and automatically through CRS or FATCA. Living abroad changes none of this, because information is exchanged without regard to where the person it concerns resides.

Several procedural protections still work in your favour. Where the subject is resident in neither Bermuda nor the requesting state, that state must establish the necessity of the information for its own tax administration, and every request must be detailed and specific, so blanket trawls are not permitted.

The exchange is regulated rather than open-ended, and your data is shielded by confidentiality rules and limited to tax purposes. The practical consequence is heightened scrutiny of cross-border holdings: undeclared taxable assets can prompt an investigation once exchanged information surfaces.

The automatic layer operates quietly and constantly. Under the 2005 Act, Reporting Financial Institutions must identify reportable accounts and report the prescribed data each year, which means a non-resident account holder's financial details flow to the relevant partner authority annually without any individual request being made.

A person named in a request is not without recourse. Judicial review in the Bermuda Supreme Court is available to test the legality of a request, and the resulting case law has drawn interest in other offshore centres facing similar challenges.

The Outlook for Information Exchange in BermudaCopy link to section

Bilateral negotiation has effectively ended. The Multilateral Convention now serves as the operative framework, and with the global shift toward automatic disclosure, bilateral requests may increasingly fade in importance, since automatic flows leave fewer requests left to make or contest.

Several developments point in the same direction of consolidation and expansion. The Corporate Income Tax Agency's takeover of oversight gathers Bermuda's international tax compliance functions under one dedicated regulator, while the CRS reportable list grew again in 2025 for the 2024 period.

The introduction of corporate income tax for large multinational groups may, over time, prompt a wider treaty network than the current single double tax convention. The OECD has also proposed extending automatic exchange to crypto and digital assets under the Crypto-Asset Reporting Framework, though no specific Bermuda adoption timeline was retrievable. The jurisdiction has earned recognition for transparency standards built over decades of work to meet international rules.

ConclusionCopy link to section

For a foreign owner, the practical reality is that Bermuda exchanges tax information freely on request through its TIEA network and automatically through CRS and FATCA, with no residency shield and no statutory limit on how the subject is located. The protections are procedural rather than absolute: requests must be specific and justified, data is held in confidence and used only for tax purposes, and a judicial review route exists. The direction of travel favours automatic, standing disclosure over one-off requests, all of it now coordinated by the Corporate Income Tax Agency. The sound response is to keep cross-border holdings properly declared and your filings clean, because exchanged information will eventually reach the authority that wants it.

How Expanship Can Help Your Business in BermudaCopy link to section

Expanship advises foreign owners on how the TIEA and automatic-exchange regime touches their Bermuda structure, including reporting obligations under CRS and FATCA and registration on the Bermuda Tax Information Reporting Portal, and supports the wider compliance needs of an overseas-owned entity.

• Company formation and structuring for non-resident owners
• Registered agent and registered office services
• Tax registration and annual filing support
• Ongoing compliance and reporting management, including CRS and FATCA
• Accounting and bookkeeping
• Introductions to banking partners

To discuss your situation, contact Expanship Bermuda.

Frequently Asked QuestionsCopy link to section