57% of the industry participants we addressed believe that the introduction of a global minimum corporate tax rate would have a negative impact on the insurance and reinsurance landscape.
It is important to note the limitations of our approach, which aimed to capture industry opinion quickly and with low resolution.
Hence, we cannot describe the various motivations or qualifications that might be considered in dealing with such a complicated question.
Consultation with our extensive industry contacts followed recent developments by G7 executives, which have made such an agreement more likely than ever.
An agreement reached earlier this month supported the creation of a minimum global corporate tax rate of at least 15%, an arrangement that could form the basis for a global deal.
Since much of the world’s re / insurance activity is channeled through offshore financial centers like Bermuda and the Cayman Islands, such a concept could have seismic effects.
Curtis Dickinson, Bermuda Treasury Secretary, stressed the importance of cross-border trade to the Bermudian economy, stating that setting tax rates is a sovereign choice.
He expressed that the Bermuda government has been subjected to independent international scrutiny by various global standardization bodies, which confirms this position.
“We have been actively involved in international regulatory and tax discussions and have continued to liaise with our key trading partners, including the UK, US and EU, on financial and other relevant matters,” he noted.
Similarly, the Cayman Islands Financial Services Association highlighted the Centre’s international obligations to protect against tax evasion.
Scott described the Cayman Islands as a tax neutral jurisdiction inhabited by the world’s leading international mutual funds that are internationally recognized as tax neutral.
“Cayman achieves tax neutrality in the simplest, most cost-effective way: it doesn’t add any other taxes imposed by other jurisdictions,” he said.
While 57% of respondents thought a minimum tax rate could be negative for the industry, the other 43% think it could be positive.