On August 8, 2023, the Government of Bermuda announced that it was launching a public consultation on the introduction of corporate income tax for companies that are part of multinational enterprise groups (with annual income of €750 million or more.
To give stakeholders an opportunity to comment on the proposed tax regime, the Government of Bermuda is opening the first of a series of consultation periods. The first consultation will end on September 8th.
Bermuda is considering introducing a corporate income tax that will be considered in calculating the effective tax rate for businesses in Bermuda, in line with the Organization for Economic Co-operation and Development (OECD) global minimum tax rules. These rules require companies within the scope to pay a minimum tax of 15% in each jurisdiction in which they operate. Taxes payable under Bermuda’s proposed corporate income tax regime would be the same as those payable in other jurisdictions under the global minimum tax system. Any new corporate income tax will also include certain tax incentives that support Bermuda’s economic goals and maintain Bermuda’s global appeal. In addition, the Tax Reform Commission will consider restructuring the island’s existing tax regimes as a means of reducing the cost of living and doing business in Bermuda.
The proposed corporate tax is expected to come into effect in 2025.