House To Debate Corporate Income Tax Act

The House of Assembly will debate the Corporate Income Tax [CIT] Act 2023, “affecting Bermuda businesses that are part of Multinational Enterprise Groups [MNEs] with annual revenues of €750M or more.”

A Government spokesperson said, “Today the Government of Bermuda announced that the House of Assembly will debate the Corporate Income Tax Act 2023 affecting Bermuda businesses that are part of Multinational Enterprise Groups with annual revenues of €750M or more. The legislation is the result of multiple public consultations and direct engagement with key industry participants by the Government and its international tax advisers.

“Over 140 OECD member countries have agreed to make material changes to their tax regimes in accordance with the OECD’s Pillar II rules to incorporate a 15% minimum tax rate for in-scope MNEs wherever they operate, regardless of where they are domiciled.

“Bermuda’s CIT allows for flexibility in balancing international tax compliance with sound economic policy while maintaining the island’s standing as an attractive mid-shore home for a wide variety of MNEs including insurance and reinsurance companies, trusts, maritime enterprises and companies in other industries.

“The CIT will include Qualified Refundable Tax Credits [QRTCs] to be developed in 2024, incentivizing companies to support Bermuda residents through investments in key areas such as education, healthcare, housing, and other projects to help develop Bermuda’s workforce. Bermuda is advancing its CIT for implementation on January 1, 2025, and will continue to monitor further developments around the world as other jurisdictions address the OECD’s standards.”

Premier and Finance Minister David Burt said, “Bermuda continues to be recognized for its commitment to global compliance and transparency, and is considered by the EU to be a fully cooperative tax jurisdiction. We’ve charted a new path forward for Bermuda’s economic prosperity that will drive investments in all sectors and enable us to reduce the cost of living and cost of doing business in Bermuda while allowing Bermuda to remain an ally to Multinational Companies seeking stability in an evolving global landscape.”

John Huff, CEO of the Association of Bermuda Insurers & Reinsurers [ABIR], said, “Bermuda Government has worked collaboratively with industry and tax experts through consultation to develop this technical framework and closing it out in 2023 with the legislation is an important and essential first phase.

“Likewise, the next two phases of the CIT in 2024 will be critical to success, including reducing the cost of doing business by reviewing existing taxes and building ‘Qualified Refundable Tax Credits,’ along with establishing a Tax Administration framework to codify the Government’s commitment to fiscal responsibility.”

Christine Patton, Executive Director of Bermuda International Long Term Insurers and Reinsurers [BILTIR], said, “BILTIR has welcomed engagement on this important matter and appreciates the hard work which has gone into ensuring, as far as possible, that the legislation contemplates the range of complex and different businesses of its members. Going into 2024 BILTIR will continue to collaborate with the government and looks forward to a balanced approach to the management of new and existing taxes.”

“ABIC applauds the collaborative manner in which the Bermuda Government has addressed the approach to the corporate income tax over the past few years. From the very beginning, the government made it clear that this work could only be accomplished with consultation between government and industry. ABIC is pleased to have contributed to these deliberations, alongside other industry associations. An enormous amount of work has been done to ensure, to the extent possible, that the legislation considers the full diversity of businesses that will most likely be in scope. ABIC looks forward to continued collaboration with government as the corporate income tax is introduced, to deliver the best national tax strategy possible, which serves the interests of all stakeholders,” said Wayne Smith, Executive Director of the Association of Bermuda International Companies (ABIC).

The spokesperson said, “The Government continues to engage with all stakeholders in refining the new tax regime. Information about the CIT has been consolidated on the Government’s CIT page.”

The Government noted that the legislation will be debated in the House of Assembly on Friday, December 15.

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