Bermuda considers new Corporate Income Tax Regime

Rashaed Esson

Staff Writer

#Burmuda, August 14, 2023 – The Government of Bermuda announced that it is considering implementing a new corporate income tax regime, to apply to Bermuda businesses that are part of Multinational Enterprise Groups (MNEs) with an annual revenue of €750M or who will otherwise be required to pay tax under the global minimum tax to another jurisdiction.  For this, they will issue a consultation paper and launch a consultation period for the proposed changes, so that interested parties can comment.

The corporate income tax would be taken into account in calculating the effective tax rate of Bermuda businesses under the Organization for Economic Cooperation and Development’s (OECD) global minimum tax rules.

Under these rules, companies in scope are required to pay a minimum tax of 15 percent in every jurisdiction which they operate.

In continuation, the taxes paid under the  tax regime would be those payable to other jurisdictions under the global minimum tax framework; and any new corporate income tax adopted would also include certain tax credits which support Bermuda’s vision for  economic evolution and maintains Bermuda’s global attractiveness.

“Our approach is to use tax reform to bolster policy initiatives that will enhance Bermuda’s economic growth prospects,” said David Burt, Premier and Finance Minister.

“The Government continues to guide Bermuda to sustainable economic growth and development.  We must attract and retain business in Bermuda, boost foreign investment, increase employment opportunities while expanding the workforce, and build our local economy to its fullest potential.  These efforts will further our policies to make our island a better place to live and work,” he added.

Burt continued to urge the necessary parties to get vocal in the consultation papers to aid in the success of these policies.

“To assist in the appropriate policy development it is critical that organisations and individuals provide feedback on the matters addressed in the public consultation document.”

Additionally, the Government expressed that it believes this proposed tax regime is supportive of Bermuda’s status as a leading international financial centre.

Also, it was highlighted that the Tax Reform Commission will examine the possibility of restructuring the island’s current tax regimes in efforts to lower the cost of living and doing business in Bermuda.

The initial consultation period begins on August 8, 2023.  All comments should be submitted prior to the deadline of September 8, 2023.  For more information visit: www.forum.gov.bm to review the consultation document.