Tax in Bermuda

Who is the tax authority?

The Office of the Tax Commissioner (OTC), under Bermuda's Ministry of Finance, runs the tax system. The OTC administers payroll tax, land tax, and stamp duty. From 1 January 2025 it also administers the Corporate Income Tax (CIT) under the Corporate Income Tax Act 2023.

The legal foundation rests on four main statutes. The Payroll Tax Act 1995 (as amended) covers the employment-income levy. The Corporate Income Tax Act 2023 brings the first-ever corporate income tax into force. The International Cooperation (Tax Information Exchange Agreements) Act 2005 underpins the TIEA network. The Digital Asset Business Act 2018 (DABA) regulates VASP licensing.

Bermuda is a British Overseas Territory. HM the King is head of state. The Governor is appointed by London. Bermuda is a signatory to the OECD BEPS Inclusive Framework — the commitment that led directly to the 2025 CIT introduction.

What is the tax year and when are returns due?

Bermuda uses the calendar year (1 January to 31 December). There is no personal income tax return — Payroll Tax is filed quarterly by employers. CIT annual returns under the Corporate Income Tax Act 2023 are due 15 months after the entity's fiscal year-end.

Who counts as a Bermuda tax resident?

Residency has limited direct-tax relevance for individuals because there is no personal income tax. The OTC issues tax-residency certificates for treaty purposes based on physical presence and economic-substance criteria.

For Corporate Income Tax purposes, the relevant question is not personal residence but entity scope. The CIT applies to Bermuda Constituent Entities that are part of in-scope MNE Groups — those with consolidated revenue of EUR 750 million or more in at least two of the prior four fiscal years. Out-of-scope entities, domestic SMBs, and non-MNE companies remain at 0% CIT.

For immigration purposes, Bermuda maintains a distinct framework. Long-term work permits, permanent resident certificates, and Bermudian status each carry different rights and obligations under Bermuda's work permit regime.

What is the personal income tax rate?

Payroll Tax is the primary employment-income levy. It is charged on wages and is split between the employer and the employee. The employer files quarterly and remits both sides.

Small employers receive reduced rates. The employer side dominates and the combined effective rate runs approximately 10–11% on most commercial wages.

Deep-dive: see payroll and employment tax in Bermuda for the full band table and remittance mechanics.

How does corporate tax work?

Bermuda had zero corporate income tax for its entire modern history — until 2025. The Corporate Income Tax Act 2023 introduced Bermuda's first-ever CIT, effective 1 January 2025, aligned with the OECD Pillar Two GloBE rules.

There is no general withholding tax on dividends, interest, or royalties paid from Bermuda. The CIT Act provides a Foreign Tax Credit mechanism so MNEs can offset Pillar Two top-up tax obligations recognised in other jurisdictions.

Deep-dive: see corporate tax in Bermuda for the CIT computation mechanics and foreign-tax-credit rules.

What about indirect taxes?

Bermuda has no VAT and no general sales tax. The primary indirect-revenue source is customs duty, which applies on most imported goods at approximately 25%.

Customs duty is a meaningful cost for businesses operating in Bermuda. Many goods that arrive duty-free in other jurisdictions carry a full 25% levy in Bermuda. Some categories — food, medicine, certain capital equipment — attract reduced or zero rates. A Chartered Tax-Adviser familiar with Bermuda import classifications can identify applicable exemptions.

How are cryptoassets treated?

Bermuda enacted the Digital Asset Business Act 2018 (DABA), establishing a globally recognised licensing and regulatory framework for digital asset businesses. The Bermuda Monetary Authority (BMA) issues DABA licences and supervises VASPs operating from Bermuda.

Deep-dive: see digital asset and crypto tax in Bermuda for the DABA licensing tiers and BMA compliance requirements.

What is the treaty network?

Bermuda's treaty network is thin on full income-tax DTAs and deep on Tax Information Exchange Agreements (TIEAs). Historically, Bermuda relied on TIEAs rather than full bilateral double-tax agreements to fulfil its international-cooperation obligations. It has approximately 40 or more TIEAs but only a very small number of full DTAs.

The MLI has not been ratified by Bermuda. Bermuda adopted Common Reporting Standards (CRS) from 2017 and FATCA compliance under the US TIEA framework. The absence of a full US DTA means cross-border income flows between Bermuda entities and the United States rely entirely on US domestic law — including IRC sourcing rules, FIRPTA, FDAP withholding, and the CFC/PFIC regimes — rather than treaty protection.

Deep-dive: see TIEA and treaty relief in Bermuda for TIEA scope versus full DTA rights.

Where does Bermuda sit in the offshore cohort?

Bermuda leads the UK Overseas Territory offshore-finance archetype alongside the Cayman Islands, BVI, Anguilla, and Turks and Caicos. It competes with the Crown Dependencies (Guernsey, Jersey, Isle of Man) as a global captive-insurance and reinsurance hub.

Currency framework

UK Overseas Territory status

Common pitfalls

Foreign companies and individuals encounter recurring traps when operating in or through Bermuda:

When should you talk to a Bermuda tax pro?

Some Bermuda situations are straightforward. Others require specialist input quickly:

Situations that warrant professional input include:

• Your MNE group approaches or crosses the EUR 750M revenue threshold — the 15% CIT becomes active
• You are structuring a captive-insurance company under the Insurance Act 1978 and BMA licensing
• Your entity needs to demonstrate Economic Substance under the Economic Substance Act 2018
• You are a US person with a Bermuda company and need to navigate CFC, PFIC, or FDAP withholding rules without a full DTA
• You are applying for a DABA licence under the Digital Asset Business Act 2018
• You received an OTC notice of assessment or a CRS/FATCA exchange-of-information query
• You are setting up a payroll in Bermuda and need to apply the correct employer/employee split

You can find vetted Bermuda practitioners through the directory below.

This page is general information. It is not personal guidance for your specific situation. Tax rules change. Always check current figures on the Government of Bermuda website or with a licensed Bermuda practitioner before filing.