Bermuda corporation tax rate likely to be 15%
Bermuda intends to have a 15% effective tax rate on should it implement a corporate income tax on its largest international companies.
The Government had earlier said the tax rate was likely to be between 9% and 15%.
The news came as the Government issued its second public consultation paper on the proposed introduction of the tax that would be applicable to multinational companies operating in Bermuda with annual consolidated revenues of at least €750 million in at least two of the previous four fiscal years to maintain consistency with GloBE Rules, the Government said in a press release.
It added: "Bermuda intends that its CIT is recognised as a Covered Tax under GloBE rules. This would minimise incremental expense for MNEs in the form of top-up taxes that could be collected in other jurisdictions through the Income Inclusion Rule or UTPR while recognising Creditable Foreign Taxes. To that end, Bermuda is proposing an effective rate of 15% for profits of covered MNEs.
"The CIT would become effective in 2025, providing MNEs the necessary time to make adjustments to their systems as they transition to paying a corporate income tax in Bermuda."
The statement said the Government proposes to introduce details of a Qualified Refundable Tax Credit (QRTC) programme in 2024 to become effective in 2025.
"It is anticipated that QRTCs will be designed to support Bermuda-based job retention and growth, as well as investments in career training, infrastructure, sustainability, and other initiatives to promote Bermuda as an attractive mid-shore jurisdiction in which to live and work."
Bermuda’s Tax Reform Commission under the chairmanship of former PwC managing partner Darren Johnston will soon be looking at ways of lowering the cost of living and doing business in Bermuda.
"Investments in key initiatives that foster job creation and other programs to accelerate economic development remain top-of-mind to help attract investments from MNE" the statement said,
“We are highly appreciative of the feedback received from the first consultation period, and directly from industry leaders, and I am confident that our new CIT regime represents an attractive path forward for Bermuda that is in line with international tax rules,” said Premier and Finance Minister David Burt.
“Under this new structure, the Government can impact everyday life by easing the burden on our citizens, maintaining our competitiveness for international business investments, and continuing our commitment to being a global compliance leader that fosters fairness and consistency in tax policy around the world. I look forward to continuing to partner with our key stakeholders in the further refinement of this proposal, and the positive impact the new CIT regime will have on Bermuda’s future.”
The second consultation period begins on October 5, 2023. All comments should be submitted prior to the deadline of October 30, 2023.