Bermuda plans to levy corporate income tax on re/insurers from 2025

The Government of Bermuda is considering introducing a corporate income tax from 2025 on multinational enterprise groups (MNEs) operating on the island with annual revenue of €750 million ($820 million) or more. The rejig of the existing tax regimes aims to bolster policy initiatives to enhance Bermuda’s economic growth prospects, as well as lower the cost of living and doing business in Bermuda.

The proposed corporate tax regime would be expected to be effective for 2025. To allow interested parties to offer comments on the proposed tax regime, the Government of Bermuda is opening the first of a series of consultation periods. This first consultation will end on September 8.

“Bermuda is considering a corporate income tax that would be taken into account in calculating the effective tax rate of Bermuda businesses under the Organization for Economic Cooperation and Development’s global minimum tax rules,” the government said.

“These rules require companies in scope to pay a minimum tax of 15% in every jurisdiction in which they operate. The taxes paid under the proposed Bermuda corporate income tax regime would be those which would be payable to other jurisdictions under the global minimum tax framework,” it added.

“Any new corporate income tax adopted would also include certain tax credits which support Bermuda’s economic goals and maintains Bermuda’s global attractiveness.”

Bermuda Premier David Burt said: “Our approach is to use tax reform to bolster policy initiatives that will enhance Bermuda’s economic growth prospects.

“The Government continues to guide Bermuda to sustainable economic growth and development. We must attract and retain business in Bermuda, boost foreign investment, increase employment opportunities while expanding the workforce, and build our local economy to its fullest potential. These efforts will further our policies to make our island a better place to live and work.

“To assist in the appropriate policy development it is critical that organisations and individuals provide feedback on the matters addressed in the public consultation document.”

The statement noted that Bermuda has been committed to global compliance and transparency and is considered by the EU to be a fully cooperative tax jurisdiction. Bermuda currently has 41 bilateral Tax Information Exchange Agreements (TIEAs) and more than 125 multilateral treaty partners.

“The Government believes this proposed tax regime is supportive of Bermuda’s status as a leading international financial centre,” the statement said. “Bermuda plans to continue to invest in key policy initiatives including reduction in the cost of living, job creation, and other programs to stimulate the economy and enhance its attractiveness to MNEs.”

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