The Government of Bermuda has made an announcement regarding its intention to introduce a corporate income tax for Bermuda businesses that are part of Multinational Enterprise Groups (MNEs) with annual revenue of €750M or more. To gather input on this proposed tax, the government will be releasing a public consultation paper (read here) and initiating a series of consultation periods. The first consultation period will run until September 8.
The purpose of this corporate income tax is to comply with the global minimum tax rules set forth by the Organization for Economic Cooperation and Development (OECD). Under these rules, companies within the scope are required to pay a minimum tax of 15% in every jurisdiction where they operate.
The taxes paid under the proposed Bermuda corporate income tax regime would be in line with what would be payable to other jurisdictions under the global minimum tax framework. Additionally, the new corporate income tax would include certain tax credits to support Bermuda’s economic goals and maintain its global appeal. The Tax Reform Commission will also explore the possibility of restructuring the island’s existing tax regimes to reduce the cost of living and doing business in Bermuda.
Bermuda is widely recognized for its commitment to global compliance and transparency, and it is regarded by the European Union as a fully cooperative tax jurisdiction. Currently, Bermuda has 41 bilateral Tax Information Exchange Agreements (TIEAs) and over 125 multilateral treaty partners. The proposed tax regime is seen as a way to uphold Bermuda’s status as a prominent international financial center. The government intends to continue investing in key policy initiatives aimed at lowering the cost of living, promoting job creation, and implementing programs to stimulate the economy and attract MNEs.