In conjunction with the creation of the Corporate Income Tax (CIT) agency, Bermuda has officially put its CIT regulations into effect following the 2023 act. The CIT act applies a 15 per cent corporate income tax to Bermuda constituent entities (BCEs) that belong to large multinational enterprise (MNE) groups with an annual revenue of at least €750 million. Companies and partnerships that are not part of an MNE group are exempt from the act. Each BCE group must designate a filing BCE, which will then be responsible for filing tax returns and making tax payments on behalf of its BCE group. Filing BCEs need to register with the agency a minimum of 10 days before payment of any required instalment on behalf of their relevant group. Failure to designate a filing BCE will result in one being chosen on behalf of the group by the agency. Instalment payments are not required if the group’s Bermuda CIT for the relevant fiscal year is under US$10,000, or if their fiscal year is between 32 and 52 weeks long. If these exemptions are not applicable, instalments are required with the CIT regulations providing guidance on how to calculate both the first and second instalments. The tax returns are due within 10 months of the fiscal year end, with amendments being possible for up to three years post-filing, unless exceptions apply. In the case of over or underpayments, the agency also has the power to impose interest and reallocate the excess funds to other BCEs within the same group. Moreover, BCEs must keep sufficient records for five years after filing a return, with the agency also possessing the power to request BCEs provide documentation, which is required to be kept under the CIT regulations for any assessments.
