Bermuda

Corporate - Significant developments

Last reviewed - 10 February 2020

The Bermuda government has extended the tax exemption granted to Bermuda companies under the Exempt Undertakings Act of 1976 from 28 March 2016 until 31 March 2035. The extended Undertaking provides protection to companies from any newly enacted taxes on income or capital gains until 31 March 2035. Existing companies are required to pay a fee of 179 Bermudian dollars (BMD) with an application for the tax exemption extension in order to benefit from this protection.

In December 2018, the Bermuda government passed the Economic Substance Act 2018 (ESA), requiring in-scope entities to comply with provisions of the ESA by 1 July 2019 with the first return due in 2020. See details in the Other issues section.

The 2019/20 Bermuda Budget, introduced in early 2019, imposes a 0.25% increase in the Foreign Currency Purchase Tax (from 1% to 1.25%), and increases to the Financial Services Tax for banks and domestic insurers. Additionally, the latest budget included a change to the land taxes on residential and commercial properties, and a new rate for tourist properties.

Effective November 2018, the Bermuda government introduced the vacation rental tax. See Vacation rental tax in the Other taxes section for details.