Corporate Income Tax in Bermuda
The Government of Bermuda issued a third Public Consultation Paper on the introduction of a corporate income tax (“CIT”) applicable to Bermuda businesses that are part of a Multinational Enterprise Group (“MNE”) with annual revenue of €750M or more.
The Government conducted two previous Public Consultations concerning the introduction of a CIT in 2023, in August, and October, respectively.
Bermuda aims to minimize Top-Up taxes levied on Bermuda MNEs in other jurisdictions where they operate. The CIT legislation is intended to come into force in its entirety in January 2025, providing MNEs time to make transition adjustments.
The Government has proposed a statutory tax rate of 15% and is developing a robust package of Qualified Refundable Tax Credits (QRTCs) to maintain Bermuda’s attractiveness.
This Consultation Paper includes Illustrative Draft CIT Legislation. Final legislation is expected to be debated in the House of Assembly in December 2023.
Premier and Minister of Finance, the Hon. David Burt JP, MP said, “The introduction of the Corporate Income Tax, which will only apply to large multinational corporations, in parallel with the work of our newly empaneled Tax Reform Commission, will allow the Government to fulfill its commitment to reduce the cost of living and doing business in Bermuda, benefitting both Bermuda's residents and businesses."
The third consultation period begins on November 15, 2023. All comments should be submitted prior to the deadline of November 30, 2023.
Media Contact: Honey S. Adams, hsadams@gov.bm
Consultation Feedback: Collin J. Anderson, cjanderson@gov.bm
Phases
First Public Consultation
This First Public Consultation is intended to be the first of a series, with two of those consultations to take place in 2023. For this First Public Consultation we are inviting replies from interested parties to any or all the below high-level questions with a view to gaining an understanding of the initial responses to the proposals.
Respondents are also invited to respond on issues not covered in this paper but which may otherwise be important to them, noting that a more detailed Second Public Consultation will be held later in the year to cover the specific aspects of the proposals such as how taxable income and creditable taxes are computed, to address detailed questions as to scope, and to address transitional matters.
Consultation Questions- Are there any aspects of the proposed scope of the Bermuda corporate income tax and the determination of which entities are within the scope that present concerns or require further clarification?
- Are there any proposed aspects of the definition of tax residency which require further clarification or present concerns?
- Do you have any comments on the proposed effective date of January 2025?
- Do you have any general comments or suggestions regarding the computation of Bermuda taxable income? Are there any specific comments regarding the accounting standards to be used as the starting point for the calculation of Bermuda taxable income or other adjustments in the calculation of Bermuda taxable income?
- Do respondents have recommendations as to the appropriate rate of corporate income tax?
- Do you have any comments or suggestions regarding possible QRTCs to be incorporated into the Bermuda corporate income tax regime?
- Do you have any views regarding the administrative aspects of reporting and payment obligations under the Bermuda corporate income tax regime?
- Are there simplification options which should be considered for the Bermuda corporate income tax regime?
- Are there aspects of the current tax regime in Bermuda that should be changed to ensure Bermuda’s competitiveness?
- Are there any other considerations of significance that should be considered in the development and implementation of a Bermuda corporate income tax?
The consultation period will run from 8th August 2023 to 8th September 2023. Submissions received after this date may not be considered.
Consultation Paper Responses should be submitted by email to: cjanderson@gov.bm. Respondents should include “Introduction of Corporate Income Tax in Bermuda” in the subject box.
Media Enquiries should be addressed to: hsadams@gov.bm.
10 issues
Filters
Total posts: 10No values available.