Jim Barber/shutterstock.com_44999458
18 July 2024News

MPs to consider corporation tax agency law

Legislation establishing the agency which will collect the Bermuda corporate income tax has been introduced in the Bermuda House of Assembly. 

The Corporate Income Tax Agency will be a quasi-independent agency tasked with collecting the tax from qualifying companies. 

It will be overseen by a board of directors and is required to have an annual report. 

The CITA will be responsible for administering the processes and procedures for the filing of tax returns and the calculation of taxes owed, reviewing and where appropriate auditing tax returns and ensuring compliance and

prosecuting any enforcement action in connection with or under the CIT Act or regulations including having the power to reach settlements. 

The agency is barred from offering oral advice and is stated that any oral advice may not be relied upon.   

It will be funded by grants from the Government, any loan or advance to the agency and "any moneys accruing to the Agency in the course of the discharge of its functions".

Officers and employees of the agency will also be immune from lawsuits brought in respect of bona fide acts done in pursuance of Act and the CITA and its staff are also restricted by confidentiality provisions. 

The agency is also empowered to provide assistance to foreign tax authorities designated under foreign law.

Its decisions can be appealed to the Supreme Court. 

The bill was tabled last Friday in the House of Assembly and could be debated tomorrow when MPs return to the Chamber. 

The Bermuda Government has said it could receive an average of $750 million a year from the CIT, which is scheduled to be implemented in January, 2025.

Companies or their subsidiaries must be part of global companies with revenues of more than 750 million euros per annum. The tax will be on 15% of the company's annual profit. 

If the estimates are accurate, the additional revenue would be the equivalent of 60% of the $1.23 billion in revenue that the Government expects to raise in the next financial year. 

Several Bermuda-based re/insurance companies have begun setting aside funds against future corporation tax payments. 

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.