Corporate Income Tax Third Consultation
The Government of Bermuda issued a third consultation paper relating to the administration of the Corporate Income Tax Act 2023, as amended.
A Government spokesperson said, “This consultation paper which is a follow on to the one previously issued on January 31st, addresses the broader administrative provisions relating to the timing of tax payments, returns, and other matters. An illustrative draft bill is included for reference.
“The Corporate Income Tax Act 2023 [the “Principal Act”] was enacted in December 2023 and provides that Bermuda Constituent Entity Groups [“BCE Groups”], comprised of one or more Bermuda Constituent Entities [“BCEs”] of an In-Scope MNE Group, are subject to Bermuda Corporate Income Tax [“CIT”] for fiscal years that began on or after January 1, 2025. In addition to the various technical provisions relevant to the determination of the CIT liability of a BCE Group, the Principal Act introduced the concept of a Bermuda CIT return to be filed by a Filing BCE on behalf of a BCE Group.
“The CIT became effective in January 2025, providing MNEs the necessary time to make relevant adjustments before transitioning into the new Corporate Income Tax regime in Bermuda.
“This Third Public Consultation period will run from February 17th to March 10, 2025. Submissions received after this date may not be considered. Consultation Paper Responses and Comments should be submitted by email to: FINANCE@gov.bm. Respondents should include “Corporate Income Tax Administration” in the subject box.
“The Government welcomes feedback from all stakeholders on these proposals, including comments and suggestions for improvements.”
The full Corporate Income Tax Administration – Third Public Consultation follows below [PDF here]:
“The Government welcomes feedback from all stakeholders on these proposals, including comments and suggestions for improvements.”
Repeal the Act so as not to drive more business away from Bermuda.
Agree, and if it is such a great deal, why all the consultations after it has been signed into law? Another ill thought out PLP piece of legislation?
The government should leave the tax system alone. We don’t need to tax IB to pay for universal healthcare.
Having your full-time employer pay half of your health insurance has been great for many years and forces people to stay employed and make a contribution to society.
Bernews, thanks for the opportunity to express my ’3 cents’ in this matter.’
I have been very interested in this matter from the initial ‘talks’ of implementation, my belief is that this decision is more re-active than pro-active, over the last 20 years this is a decision which should have been a PLP administration task, even if it was implemented in 2010, but that’s water under the bridge.
As with everything in LIFE there are pros and cons, hence, I did some research from the ‘Knowledgeable and past/present experience countries.
Of course Bermuda must consider various differential economic aspects, soo then we cannot paint with a wide brush. My thought is that consideration should be given to a tier rate structure.
Barbados’ general corporation tax rate is 9%, effective January 1, 2024, this has me thinking, ok yes Bermuda should, reason being, I TRUST the leader in Sister Mia Amor Mottley to support implementation this tax in 2024
The corporate tax rate in Cayman, Turks and Caicos is 0%. This applies to both local and international companies registered in the territory. This zero-tax environment attracts businesses seeking to maximize profits and minimize tax liabilities.
Ireland has a low corporate tax rate of 12.5 percent. Net operating losses can be carried back one year and carried forward indefinitely, allowing companies to be taxed on their average profitability.
Seven countries across four continents—Guinea, South Africa, Bangladesh, the Republic of Korea, Austria, Aruba, and Saint Vincent and the Grenadines—reduced their corporate tax rates in 2023. The tax rate reductions ranged from just 1 percentage point in Austria, the Republic of Korea, and South Africa, to 10 percentage points in Guinea.
My ‘People’ let’s not take this for granted as it has long-term implications.
Bermuda is in a ‘grave’ Economic S**hituation that our children are NOT prepared to work and be able to assist in repaying our debt.
Food for Thought ‘Never Bite the hand that feeds you’ because Those International Businesses have Been and Still are Contributing substantially to the Social Sector of Bermuda as well, therefore, we cannot afford to Throw the Babies Out with the dirty bath water.
Let Good Sense Prevail
Nathalee Simons aka Sojourner Truth
There is much more to consider then just comparing the corporate tax rate in Bermuda (15%) versus the tax rate in another jurisdiction, say Cayman (0%). That would make sense if the decision were binary – Bermuda versus Cayman, for example – but it is not. This is because of the very complicated Global Minimum Tax or Pillar II framework, as it is known, that has largely been adopted globally. Basically what it means is that a company that will be paying the 15% tax in Bermuda, if it relocated to Cayman for example, would likely still be paying 15% tax to another country even though Cayman has a 0% corporate income tax rate. Cayman would get no tax revenue and 15% tax would be paid to another country on the Cayman company’s income. In this example, moving from Bermuda to Cayman simply does not get you a better tax answer so there is little incentive to move. They are paying the 15% tax in either case.
By enacting the tax in Bermuda, Bermuda gets to keep the tax revenue that a Bermuda company would have had to inevitably pay somewhere else (i.e. enriching another country), had Bermuda done nothing. The conversation should naturally evolve to how Bermuda can responsibly use this new revenue source to improve the lives of Bermudian’s and remain competitive in international business. Fair to say, Pillar II is a political issue with decisions made at the OECD level, far outside of Bermuda’s borders. Cayman could have made the same decision but chose another path. Bermuda is just playing by the ‘new’ rules.
The unknown, and no one in the financial world inside or outside of Bermuda has the answer, is will there be any tax paid here? Burt has bragged about $750 million per year. Laughable. The major companies that have a presence here have already booked billions of dollars of tax credits, so forget that. They do no business here so why should they pay tax? They also have offices of tax experts to know how to mitigate tax.
Incidentally, has the tax exempt act that expires in 2035 under which exempt companies operate here, been revoked?
The PLP will run this country into the ground with this tax. Leave the tax system alone. International Business is our main industry. Please do not add more unnecessary taxes. Bermuda has no natural resources, no tangible exports, no real economic driver besides International Business and tourism which unfortunately is seasonal.
Introducing this tax could have major economic consequences for Bermuda. The PLP can marginally tweak payroll tax and import duties etc. but please do not introduce corporation tax when you do not know how things will play out. We cannot accept the risk.
They are already paying tax with our land tax and import duty..
“Never put you head in a lions mouth “.!
PAYROL TAX is nothing short of income tax for the working class .
The Governmrnt did not miss one day out of their pay packet .
Many people here are living on peanuts .
Pay packet and perks to the O.B.A. Cost less in allocation than that to the PLP.
Time has come to stop insulting one another in order in an attempt to gain popularity .
The OBA offered the token of pease and friendship last night.
One comes with verbal abuse the other leaves with contempt . TYPICAL !
We deserve better !
The numbers show one party with more responsibility for the national debt and the other party with less
who were the unlucky ones here . YOU !
How much did the 2025 election cost the Taxpayers.? where did that money come from .
Who did not retain their seats on the hill ?
It takes one brain to problen solve and ten brain to act it out . unless they can pass the buck .
TAX ALL THE RICH AND POOR.
When peopl live with over abundance the loose all respect for the value money
The whole idea of our offshore companies coming here in first place so the could be competitive with other countries
that benifits every body world wide even the USA we take that away and they leave hear my brother who works with off shore bussed al the need do i pusone key
get uf from their seat and walk .
Why is it that so many un ~workable decisions there are 51 reasons are made here with out rime or reason and the ultimate comsequences is the must like walking on thin ice fall through and drown . can blame the blame the opposition they are also the Government .
TAXATION is no a quick way in solving the national debt.
ACOUNTABILITY TOWN HALL at Bermudiana beach either the powers that be are up and running or they are not !