Burt happy to lose ‘ridiculous tax haven moniker’

Bermuda Premier David Burt hopes the imposition of Corporate Income Tax (CIT) in 2025 will remove the island’s “ridiculous moniker of a tax haven”. 

“There is no one in Bermuda who feels undertaxed, or does not think taxes are too high,” the Premier told the Bermuda Risk Summit yesterday. 

Bermuda last year passed legislation putting the 15% corporation tax in place. It will be levied on multinational companies operating in Bermuda which have revenues of more than €750 million.

Passage of the tax took place after consultation with the international business sector and a tax reform commission is now considering reductions in some of the island’s existing taxes, Burt said. 

The Premier was taking part in the opening session of the Risk Summit with Marc Grandisson, chief executive officer of Bermuda-based re/insurer Arch Capital. 

Asked to explain the process behind the development of the Corporate Income tax, Burt said it “had been a long time coming”. 

“This is a dream of people in Brussels for a long time,” Burt said. “President Biden pushed ahead with the global minimum tax, and we had to choose between being a compliant and cooperative jurisdiction or an outlier. 

“We had to establish long term certainty,” he said, noting that businesses dislike uncertainty more than anything else.  

Burt said the government, working with business, got “the best and the brightest” together and ended up with a bill which will serve Bermuda’s interests going forward. 

“Businesses know they can plan, and they have planned, for the change. We are going to press forward to be a cooperative and compliant company.” 

Asked by Grandisson what needed to happen next, Burt said the Tax Reform Commission  was reviewing how to revise the tax system to make Bermuda more competitive. 

Burt admitted that it was unusual for a labour party of the centre left like his Progressive Labour Party to be looking at tax reductions. 

But he said he like cutting taxes as they were good for business growth. 

He said he hoped Bermuda would not have to worry as much about  international demands and examinations while the TRC would work through changes to domestic tax structure to make Bermuda more competitive. 

He said the advantage of introducing the CIT now was that it was possible to make it high tech and highly responsive. At the same time, the Government needed to detail the system of qualified refundable tax credits which would allow companies to continue to demonstrate the significant contribution they make to Bermuda. 

Grandisson noted that news of the CIT had not affected re/insurers’ share prices. 

“For years, Bermuda re/insurance companies had a discount  due to the uncertainty over their tax status,” he said. But he said when the CIT was announced, there was no reaction to the tax in terms of the stock price. 

“It will alleviate uncertainty in the long term,” he said. 

Burt was upbeat about Bermuda’s future and the state of the international business sector, saying the island’s epitaph had been written many times in the seven years he had been Premier. 

He noted that there were more people working in international business now than before the 2008 financial crisis and that the “Bermuda Triangle” of government, the regulator and business working together had enabled the island to overcome each challenge it encountered. 

On immigration, Burt said Bermuda recognised the need to generate jobs in order to expand the economy. 

“We have to recognise that where there is an ageing population, we need to support them with younger workers. I am proud to see young Bermudians in international business and want to make sure they stay.” 

He added: “Bermuda is the world’s risk capital, the undisputed leader, and every insurance innovation in 20 years has happened here. There is uncertainty around the world – you don’t get that in the Bermuda market. 

“Both political parties are committed to the growth of international business. if you are an investor and you are planning to set up the next great risk strategy, or looking at how established companies already have innovated, this is the place to be.” 

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