The Government of Bermuda is considering introducing a corporate income tax on businesses that are part of multinational enterprise groups (MNEs) with annual revenue of €750 million (£648.1 million) or more.
The proposed tax would be considered in calculating the effective tax rate of Bermuda businesses under the Organisation for Economic Cooperation and Development’s (OECD) global minimum tax rules.
The rules require companies in scope to pay tax of at least 15 per cent in each jurisdiction in which they operate.
The government plans to issue a public consultation paper as part of its considerations, which will allow interested parties to comment on the proposed changes. The initial consultation period, which began on 8 August, will end on 8 September.
Bermuda’s Tax Reform Commission will examine the possibility of restructuring existing tax frameworks to lower the cost of living and cost of doing business on the island nation.
Presently, Bermuda does not levy taxes on corporate income. The government has said that any new corporate income tax would also include tax credits to maintain Bermuda’s economic goals and attractiveness to businesses.
The country currently has 41 bilateral tax information exchange agreements (TIEAs) and is considered by the EU to be a fully cooperative tax jurisdiction.
David Burt, premier and finance minister of Bermuda, says: “Our approach is to use tax reform to bolster policy initiatives that will enhance Bermuda’s economic growth prospects.
“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 [...] 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.”
