Bermuda launches consultation on income tax

The Bermuda Government has launched a public consultation on the administration of the collection of the Corporate Income Tax, which is due to come into effect next year. 

The consultation states that a tax collection agency will be established to collect the tax, which will be done digitally.  

The consultation urges all stakeholders to respond to the consultation which ends on September 5. 

Under its plan, the tax agency will develop an online portal which will allow for companies in scope to register, file their returns, to submit instalment payments and to deal with queries both to and from the agency.

The system will allow for Bermuda Constituent Entities – which are part of multinational enterprises which have more than 750 million euros in annual revenues – to pay their tax liabilities in two instalments with a final reconciliation payment. 

The paper said further consideration was required to decide whether “certain non-BCEs” may be required to register with the tax agency, including entities which may be excluded or exempted from tax under the Act. 

The consultation paper also says the Agency will have the power to raise an enquiry within three years of the filing date or the date on which the CIT return was filed. 

The consultation paper allows for taxes to be paid in two instalments with a final “true up” payment due on the due date of the return, regardless  of when the return was filed. 

The CIT is due to come into effect in January, 2025. The majority of the tax is expected to be paid by members of the Association of Bermuda insurers and Reinsurers.  

Premier David Burt has predicted that the tax could raise an average of $750 million a year. 

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