Tax in Bermuda

Who is the tax authority and where do filings live?

Bermuda's Office of the Tax Commissioner administers Bermuda's tax system [SC1]. Substantive law: Payroll Tax Act 1995 (as amended); Corporate Income Tax Act 2023 (effective 1 January 2025 — Bermuda's first-ever corporate income tax framework); International Cooperation (Tax Information Exchange Agreements) Act 2005; Digital Asset Business Act 2018; and successive amendments. Bermuda is a British Overseas Territory; OECD-Inclusive-Framework adherent.

What is the tax year and when are returns due?

Individual tax year is the calendar year. No personal income tax [SC1]. Payroll Tax quarterly returns. Corporate Income Tax annual returns under Corporate Income Tax Act 2023 due 15 months after fiscal year-end (effective for fiscal years beginning on or after 1 January 2025).

Who is a Bermuda tax resident?

Residency framework largely irrelevant for direct-tax purposes given zero general direct-tax framework [SC2]. Tax residency certificates issued for treaty-purposes based on physical presence and economic-substance criteria. Corporate Income Tax applies to Bermuda Constituent Entities of in-scope MNE Groups (consolidated revenue EUR 750m+).

What are the personal income tax rates?

No personal income tax [SC1]. Payroll Tax combined employer-and-employee progressive: 1.5 percent (employee on first BMD 48k); 10 percent (employer general rate). Combined effective rate ~9.5-10.25 percent depending on band and employer category. Social Insurance contributions BMD 71.84 (employee) + BMD 71.84 (employer) per week.

How does Bermuda's corporate tax work?

Corporate Income Tax 15 percent effective 1 January 2025 under Corporate Income Tax Act 2023 — Bermuda's first-ever corporate income tax framework [SC2]. Applies to Bermuda Constituent Entities of in-scope MNE Groups (consolidated revenue EUR 750m+ for two of four prior fiscal years). Substantial out-of-scope framework: Bermuda Constituent Entities of non-MNE Groups continue under zero-CIT framework. Foreign Tax Credit framework to offset Pillar Two top-up obligations elsewhere. Economic Substance Act 2018 post-2018 framework requires Economic Substance for relevant activities. No general withholding tax on dividends, interest, or royalties.

What about indirect tax?

No VAT or sales tax [SC3]. Customs duties typically 25 percent on most goods. Land Tax annual.

How are cryptoassets taxed?

Digital Asset Business Act 2018 (DABA) provides framework for VASP licensing under Bermuda Monetary Authority [SC2]. No capital gains tax on cryptoasset disposals. No general income tax on cryptoasset trading gains (subject to Pillar Two CIT for in-scope MNEs).

What is the treaty network and what are the audit triggers?

Bermuda has approximately 1 active comprehensive double tax treaty (US) plus extensive TIEAs [SC4]. MLI not yet ratified. Standard SOL 5 years.

What are the common penalties and pitfalls for foreigners?

Penalty framework: late filings, failure to file, incorrect declarations [SC5]. Common pitfalls: (1) Corporate Income Tax 15 percent effective 1 January 2025 under Corporate Income Tax Act 2023 is Bermuda's first-ever corporate income tax — substantial framework transition for in-scope MNEs; (2) zero general direct-tax framework with Payroll Tax 1.5-10.25 percent combined employer-employee progressive; (3) Economic Substance Act 2018 post-2018 framework requiring Economic Substance for relevant activities; (4) DABA Act 2018 VASP licensing framework under BMA; (5) significant reinsurance-hub framework with separate Insurance Act 1978 and Bermuda Solvency Capital Requirement (BSCR); (6) extremely limited treaty network (1 comprehensive DTC - US, plus extensive TIEAs); (7) MLI not yet ratified; (8) British Overseas Territory legal framework; (9) anglophone tradition; (10) BMD-denominated framework with 1:1 USD peg; (11) premier offshore-financial-centre relevance — substance requirements critical post-2018; (12) CRS adopter from 2017.