Bermuda Consolidated Legislation

BERMUDA
1975 : 32

FOREIGN CURRENCY PURCHASE TAX ACT 1975

[formerly the Overseas Investment Tax Act 1975]

ARRANGEMENT OF SECTIONS

1 Short title

1A Interpretation

2 Foreign currency pur chase tax

3 Exemptions

4 Accountant-General may authorize banks to render periodic returns of daily transactions

5 Penalties

6 False statements

7 Amendment of Schedules

 

FIRST SCHEDULE

Rate of foreign currency pur chase tax

SECOND SCHEDULE

Exempted transactions

[31 May 1975]

[preamble and words of enactment omitted]

Short title

1 This Act may be cited as the Foreign Currency Purchase Tax Act 1975.

Interpretation

1A In this Act —

"the Authority" means the Bermuda Monetary Authority estab lished under section 2 of the Bermuda Monetary Authority Act 1969 [title 16 item 11];

"bank" means a bank licensed under the Banks Act 1969 [title 17 item 20];

"the Controller" means the Controller of Foreign Exchange as defined in the Exchange Control Act 1972 [title 16 item 1];

"currency of Bermuda" means the currency of Bermuda estab lished by section 8 of the Bermuda Monetary Authority Act 1969 [title 16 item 11];

"exempted transaction" means a transaction described in the Second Schedule;

"foreign currency" has the same meaning as in the Exchange Control Act 1972 [title 16 item 1];

"non-resident" means a person who is deemed not to be resident in Bermuda under the Exchange Control Regulations 1973; [title 16 item 1(a)]

"foreign currency purchase tax" means the tax charged under section 2;

"resident" means a person who is deemed to be resident in Bermuda under the Exchange Control Regulations 1973.

[section 1 amended by 1992:27 effective 4 April 1992]

Foreign currency purchase tax

2 (1) Subject to section 3, there is hereby charged a foreign cur rency purchase tax whenever foreign currency is purchased by a resident from a bank.

(2) The tax shall be charged at the relevant rate specified in Schedule on every dollar of the currency of Bermuda paid for the pur chase of foreign currency.

(3) The tax shall be paid by or on behalf of the person pur chasing the foreign currency and, subject to section 4, shall be collected and remitted to the Accountant General in the currency of Bermuda by the bank from which the foreign currency is purchased.

[section 2 amended by 1992:27 effective 4 April 1992; and by 1994:3 effective 14 February 1994]

Exemptions

3 Foreign currency purchase tax is not payable on the purchase of foreign currency for the purpose of an exempted transaction.

[section 3 repealed and replaced by 1992:27 effective 4 April 1992]

Accountant-General may authorize banks to render periodic returns of daily transactions

4 (1) Where the Accountant General is satisfied that the revenue would be adequately safeguarded he may by notice in writing authorize any bank to render to him weekly, monthly or quarterly, in such form and containing such particulars as he may require, a return of the daily amount of currency of Bermuda paid for the purchase of foreign cur rency from that bank in respect of transactions on which foreign cur rency purchase tax is payable.

(2) Where a return is made in pursuance of subsection (1) the bank shall at the same time remit to the Accountant General a sum equivalent to the amount of the tax due on the transactions shown in the return.

(3) A bank rendering a return under subsection (1) shall, if so required by the Accountant General, produce such evidence as he may require to satisfy himself that no tax fell to be paid in respect of any other purchases of foreign currency not included in the return; and if the Accountant General is not so satisfied, the bank making the return shall be liable to pay a sum equivalent to the amount of the tax which would have been payable in respect of such other purchases of foreign cur rency.

(4) No statement or information shall be required for the pur poses of any return under this section with respect to the account of any customer of a bank.

Penalties

5 (1) Any bank which knowingly fails to collect and remit any for eign currency purchase tax commits an offence:

Punishment on summary conviction: a fine of $5,000 or triple the amount of the tax payable, whichever is greater.

(2) Any person who, in connection with any return rendered or evidence produced under section 4, makes or produces or causes or al lows to be made or produced any statement or information which is false in a material particular and which he knows to be false, commits an of fence:

Punishment on summary conviction: imprisonment for 6 months or a fine of $500 or both such imprisonment and fine.

False statements

6 Any person who in connection with a claim for exemption from payment of tax under this Act makes or produces or causes or allows to be made or produced any statement or information which is false in a material particular and which he knows to be false or does not believe to be true commits an offence:

Punishment on summary conviction: imprisonment for 6 months or a fine of $1,000 or triple the amount of the tax payable whichever is the greater or both such imprisonment and fine.

Amendment of Schedules

7 (1) The Minister may by order amend—

(a) the First Schedule;

(b) the list of exemptions specified in the Second Schedule.

(2) An order made under subsection (1) is subject to the affirmative resolution procedure.

[Section 7 substituted 1994 : 3 effective 14 February 1994]

FIRST SCHEDULE (Section 2(2))

The rate at which tax is to be charged on a purchase for the purposes of a transaction which is not an exempted transaction is 0.25%.

[First Schedule repealed and replaced by 1994 : 3 effective 4 February 1994]

 

SECOND SCHEDULE (Sections 1A, 7(1)(b))

EXEMPTED TRANSACTIONS

1 A transaction by one of the following bodies —

(a) the Government;

(b) the Bermuda Monetary Authority;

(c) the Bermuda Housing Corporation;

(d) a bank;

(e) a deposit company licensed under the Deposit Companies Act 1974 [title 17 item 19];

(f) a credit union registered under the Credit Unions Act 1982 [title 13 item 14];

(g) a trust company licensed under the Trust Companies Act 1991 [title 17 item 6];

being, as respects any such body, a transaction undertaken by that body for its own account.

A transaction undertaken by a body for its own account is, for the above purpose, a transaction undertaken by the body otherwise than for or on behalf of another person or body, whether or not that other person or body is an affiliated or a subsidiary company of the first-mentioned body within the meanings given to the expressions "affiliated company" and "subsidiary company" in section 2(1) of the Companies Act 1981 [title 17 item 5].

2 A remittance, in each case with the permission of the Controller—

(a) of premium income by a local insurance company or a non-resident insurance undertaking; or

(b) of pension contributions by a local pension fund.

[Second Schedule repealed and replaced by 1992:27 effective 4 April 1992]

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