Govt Considers Introducing Corporate Income Tax

August 8, 2023 | 19 Comments

[Updated with video] The Government will issue a public consultation paper as part of its considerations on introducing a corporate income tax to apply to Bermuda businesses that are part of Multinational Enterprise Groups with annual revenue of €750M [$821M] or more.

A Government spokesperson said, “Today, the Government of Bermuda announced that it will issue a public consultation paper as part of its considerations on introducing a corporate income tax to apply to Bermuda businesses that are part of Multinational Enterprise Groups [MNEs] with annual revenue of €750M or more.

“The proposed corporate tax would be expected to be effective for 2025. To allow interested parties to offer comments on the proposed tax regime, the Government of Bermuda is opening the first of a series of consultation periods. This first consultation will end on September 8.

“Bermuda is considering a corporate income tax that 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. These rules require companies in scope to pay a minimum tax of 15 % in every jurisdiction in which they operate.

“The taxes paid under the proposed Bermuda corporate income tax regime would be those which would be payable to other jurisdictions under the global minimum tax framework. Any new corporate income tax adopted would also include certain tax credits which support Bermuda’s economic goals and maintains Bermuda’s global attractiveness. In addition, the Tax Reform Commission will examine the possibility of restructuring the island’s existing tax regimes as a means of lowering the cost of living and doing business in Bermuda.

“Bermuda is recognized for its commitment to global compliance and transparency and is considered by the EU to be a fully cooperative tax jurisdiction. Bermuda currently has 41 bilateral Tax Information Exchange Agreements [TIEAs] and more than 125 multilateral treaty partners. The Government believes this proposed tax regime is supportive of Bermuda’s status as a leading international financial centre. Bermuda plans to continue to invest in key policy initiatives including reduction in the cost of living, job creation, and other programs to stimulate the economy and enhance its attractiveness to MNEs.”

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

The spokesperson said, “As noted, 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: https://www.gov.bm/ or www.forum.gov.bm to review the consultation document.”

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Comments (19)

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  1. Collector says:

    plp looking for fresh money for friends and family.

  2. Great is your weakness…immediate gratification is your shame
    Think before you feast…it is your people and island that will suffer…in fact you yourselves . But do you nothing is in fact not revocable…unless it is agreed apon and tell me what will you use for money palmetto leaves . Well they are larger I guess that makes them worth more . At least think this through properly and please…take your head out yah tookass…it is not a hat .

  3. Graham says:

    The Government must be rubbing their hands, a get out of jail free card after years of financial mismanagement.

    So IB, basically the Insurance industry is forced by international law to recognise a global tax levy that is paid back to the local Government. The big question is what the Government will do to encourage IB to stay, most obviously remove other taxes.

    If they don’t IB will leave. So you might be reading this thinking a windfall, what great news. But if Burt pushes too far, he risks the bank. And if IB leaves, really what do we have?

    • Joe Bloggs says:

      “And if IB leaves, really what do we have?”

      We have our booming tourism industry. That is what attracted IB in the first place.

      • Graham says:

        Ha-ha, yeah good one.
        We literally have no tourists and no flights and no hotels.

    • Joe Bloggs says:

      We also have our casino gaming business!

    • LOL - the real one says:

      You have pink sand, homophobia, racism, a hatred for foreigners, poor education, and an electorate that doesn’t understand, nor care, about the economy.

  4. We need this says:

    This is a significant step in the right direction Bermuda. Understand that this particular economic sector see revenue from $300bn plus a year, so 1% of that is enough to revitalize the economy and change the whole island if we have good stewards of the funds and the allocation of the funds. Education and health care to me are priority and secondary issues are these roads and alternative energy sources not to mention infrastructure needs like Tynes Bay facilities can be upgraded and updated. Yes this tax will bring a significant amount of money to Bermuda but it will only be agreeable with certain terms in place. “No taxation without representation” Let’s talk!

    • Joe Bloggs says:

      Have you considered the fact that some international companies might simply leave Bermuda rather than incur the additional expense of a 15% corporate income tax on top of the other taxes and costs?

      • Graham says:

        Trust me, they are all evaluating options.
        Oh and by the way, Switzerland, Gibraltar, Vermont, Dublin, Malta etc are all sending delegates to meet with our major companies

  5. Joe Bloggs says:

    The OECD consists of Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States.

    Why is the PLP Government trying to appease those countries now?

  6. Ringmaster says:

    The vast majority of IB make no profits in Bermuda, so how can no profits be taxed and paid in Bermuda? Local businesses make local profits, so they will have to be taxed to make this have any meaning. Always the devil is in the detail and it seems the PLP want to seem like it is a world leader, rather like the efforts with climate change espoused by Roban, when in fact it can only hurt Bermuda as a whole.

  7. Navin Johnson says:

    Want to kill International business? 15% is preposterous

  8. aceboy says:

    Sure, kill off IB. The PLP legacy

  9. Curious says:

    Will Local business being taxed at 15%, how will this reduce the cost of living, everything just went up in price by 15%???

    • Anonymous says:

      No it would only be large businesses making more than $800 million~ per year.

    • Joe Bloggs says:

      No, local businesses will not be similarly taxed (“introducing a corporate income tax to apply to Bermuda businesses”), at least not at this stage.

      This is aimed (for now) at those nasty foreign companies in Bermuda. Once they leave, then local companies will be taxed on their income.

  10. Guy Carri says:

    This would be better if we could manage money.
    Imagine taxing 15% and the spending on the F&F and continuing to borrow more and not pay down debt and leaving our seniors in poverty and not alleviate the housing crisis.
    If we didn’t spend $126M/yr on INTEREST ONLY we sure could help a lot of our needy.

    TIGHTEN YOUR BELT AND GET YOUR HEAD OUT OF THE TROUGH

  11. So you want to pay taxes overseas?

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