Bermuda’s government has drafted legislation proposing a corporate income tax on large multinational corporations operating within the island, as reported by the Bermuda Royal Gazette. The draft, spurred by responses to a public consultation, suggests a 15% tax on multinational enterprise groups with annual revenues exceeding $814 million.
The draft law aims to align Bermuda with the global minimum tax initiative, ensuring that entities tax-resident in Bermuda but also taxed abroad can claim a foreign tax credit (FTC) to offset taxes paid in other jurisdictions. This move is part of a broader effort to modernize Bermuda’s tax system and is anticipated to be discussed in the House of Assembly next month, with the potential to be enacted in January 2025.
Stakeholders have the opportunity to review and comment on the draft until November 30, following the issuance of a third public consultation paper. The government has emphasized the importance of feedback, indicating that the law will likely undergo further refinement based on the insights gathered.
Premier and Minister of Finance David Burt has described this step as “the most fundamental tax reform in Bermuda’s history,” highlighting the significance of industry and public input in shaping this legislation.
In line with Bermuda’s commitment to international tax standards, the proposed corporate income tax will complement the OECD’s Global Anti-Base Erosion (GloBE) rules, aiming to minimize the additional taxes that Bermuda-based multinationals might face in other jurisdictions.
To balance the introduction of this tax and maintain Bermuda’s competitive edge as an international business center, the government is also developing a series of qualified refundable tax credits. These incentives will focus on encouraging corporate investments in workforce development, infrastructure, sustainability, innovation, and housing, contributing to Bermuda’s economic growth and attractiveness as an investment destination. This tax reform initiative reflects Bermuda’s ongoing efforts to adhere to evolving global tax norms and to continue fostering a fair and competitive economic environment.
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