Tax Exemption Extension “A Positive Step”
Government’s pledge to extend by 29 years tax benefits granted to overseas firms operating in Bermuda which have been classified as exempted undertakings is being welcomed by international hedge fund operators.
The global industry journal ”Hedge Week” today (Dec. 24) highlighted the Government promise, announced in November’s Throne Speech at the reconvening of Parliament.
According to law firm Appleby, the current legislation, the Exempted Undertakings Tax Protection Act 1996 and related regulations, provide for assurances to be granted to exempted undertakings by the Ministry of Finance exempting such businesses from the imposition of tax under any applicable Bermuda law computed on profits or income or computed on any capital asset, gain or appreciation, or on any tax in the nature of estate, duty or inheritance tax, up to 28 March 2016.
This is provided that such exemption shall not prevent the application of any such tax or duty to such persons as are ordinarily resident in Bermuda and shall not prevent the application of any tax payable in accordance with the provisions of the Land Tax Act, 1967 or otherwise payable in relation to land in Bermuda leased to the exempted undertaking.
“Appleby says the proposed extension to 2035 is a positive and proactive step in reinforcing the Government’s commitment to international business in Bermuda,” said “Hedge Week”. “By confirming that an extension will be granted, the Government has provided certainty in relation to an important and attractive financial benefit for international business in Bermuda.”
“Although details are yet to be provided in relation to how the extension will be introduced, it is understood that further details will be forthcoming in early 2011.”
