Bermuda

Corporate - Significant developments

Last reviewed - 06 August 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. Further guidance regarding the ESA continues to be issued on a regular basis. See details in the Other issues section.

The 2020/21 Bermuda Budget brought updates to the payroll tax. The changes primarily entail adjustments to the rate of payroll taxes and the creation of new employer payroll tax bands for the small and medium sized business sector. See Payroll tax in the Other taxes section for details.