The European Union (EU) Savings Directive (2003) took effect on 1 July, 2005.

This article looks at the impact of the Directive in Bermuda, the Cayman Islands and the British Virgin Islands (BVI).

Given the fact the aim of the Directive is to ensure that individuals who are tax-resident within the EU are subject to effective taxation on interest income received by them, and that Bermuda is not included in the list of countries to which the Directive applies or which were required to implement 'equivalent measures', whereas the Cayman Islands and BVI are, the implementation of the Directive has had some rather surprising consequences.