- Proposed legislation is expected to be a Covered Tax under OECD’s global minimum tax (“GMT”)
- Proposed tax designed to collect revenue otherwise payable under the OECD’s GMT for Multinationals wherever they operate or are domiciled
- Legislation to be debated in the House of Assembly on Friday, December 15, 2023
- Corporate Income Tax proposal to take effect in January 2025
14/12/2023 — HAMILTON, Bermuda — (BUSINESS WIRE)
Today the Government of Bermuda announced that the House of Assembly will debate the Corporate Income Tax (CIT) Act 2023 affecting Bermuda businesses that are part of Multinational Enterprise Groups (MNEs) with annual revenues of €750M or more. The legislation is the result of multiple public consultations and direct engagement with key industry participants by the Government and its international tax advisers.
Over 140 OECD member countries have agreed to make material changes to their tax regimes in accordance with the OECD’s Pillar II rules to incorporate a 15% minimum tax rate for in-scope MNEs wherever they operate, regardless of where they are domiciled.
Bermuda’s CIT allows for flexibility in balancing international tax compliance with sound economic policy while maintaining the island’s standing as an attractive mid-shore home for a wide variety of MNEs including insurance and reinsurance companies, trusts, maritime enterprises and companies in other industries.
The CIT will include Qualified Refundable Tax Credits (QRTCs) to be developed in 2024, incentivizing companies to support Bermuda residents through investments in key areas such as education, healthcare, housing, and other projects to help develop Bermuda’s workforce. Bermuda is advancing its CIT for implementation on January 1, 2025, and will continue to monitor further developments around the world as other jurisdictions address the OECD’s standards.
“Bermuda continues to be recognized for its commitment to global compliance and transparency, and is considered by the EU to be a fully cooperative tax jurisdiction. We’ve charted a new path forward for Bermuda’s economic prosperity that will drive investments in all sectors and enable us to reduce the cost of living and cost of doing business in Bermuda while allowing Bermuda to remain an ally to Multinational Companies seeking stability in an evolving global landscape,” said Premier and Finance Minister, the Hon. David Burt, JP, MP.
“Bermuda Government has worked collaboratively with industry and tax experts through consultation to develop this technical framework and closing it out in 2023 with the legislation is an important and essential first phase. Likewise, the next two phases of the CIT in 2024 will be critical to success, including reducing the cost of doing business by reviewing existing taxes and building ‘Qualified Refundable Tax Credits,’ along with establishing a Tax Administration framework to codify the Government’s commitment to fiscal responsibility,” said John Huff, CEO of the Association of Bermuda Insurers & Reinsurers (ABIR).
“BILTIR has welcomed engagement on this important matter and appreciates the hard work which has gone into ensuring, as far as possible, that the legislation contemplates the range of complex and different businesses of its members. Going into 2024 BILTIR will continue to collaborate with the government and looks forward to a balanced approach to the management of new and existing taxes,” said Christine Patton the Executive Director of Bermuda International Long Term Insurers and Reinsurers (BILTIR).
The Government continues to engage with all stakeholders in refining the new tax regime. Information about the CIT has been consolidated on the Government’s CIT page at: https://www.gov.bm/CIT.
Published by the Government of Bermuda (https://www.gov.bm)
Honey S. Adams
Collin J. Anderson