Bermuda Tax Compliance Skill v2.0

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Section 1 -- Quick Reference

Field	Value
Country	Bermuda
Tax	Payroll tax (primary), customs duties, land tax, stamp duty, social insurance
Currency	BMD (1:1 with USD)
Tax year	Calendar year
Primary legislation	Payroll Tax Act 1995 (as amended); Customs Tariff Act 1970
Supporting legislation	Companies Act 1981; Land Tax Act 1967; Stamp Duties Act 1976
Tax authority	Office of the Tax Commissioner
Filing portal	https://www.tax.gov.bm
Filing deadline	Payroll tax quarterly (Apr 15, Jul 15, Oct 15, Jan 15); annual reconciliation March 15
Contributor	Open Accountants Community
Validated by	Pending -- requires sign-off by a licensed Bermuda practitioner
Skill version	2.0

Tax Landscape Overview

Tax Type	Status
Income Tax (personal)	None
Income Tax (corporate)	None
Capital Gains Tax	None
Value Added Tax (VAT)	None
Sales Tax	None
Withholding Tax	None
Payroll Tax	Yes -- primary revenue source
Customs Duties	Yes -- on imports
Land Tax	Yes -- on property
Stamp Duty	Yes -- on real estate transfers
Social Insurance	Yes -- contributory pension scheme

Bermuda has a legislative guarantee (Tax Assurance Certificate) that no income, capital gains, or withholding taxes will be introduced before 2035.

Payroll Tax Rates (Current)

Employer Rate Tier	Employer Rate
Up to BMD 200,000 annual payroll	Reduced rate (concession)
BMD 200,001 -- 350,000	Intermediate rate
BMD 350,001 -- 500,000	Standard rate
Above BMD 500,000	Standard rate (10.25%)

Employee Income Tier	Employee Rate
Up to BMD 48,000	0.50%
BMD 48,001 -- 96,000	9.25%
BMD 96,001 -- 200,000	10.00%
BMD 200,001 -- 500,000	11.50%
BMD 500,001 -- 1,000,000	12.50%

Payroll tax is capped at BMD 1,000,000 per person per year.

Conservative Defaults

Ambiguity	Default
Unknown employer classification	Standard rate
Unknown employee income tier	Highest applicable rate
Unknown customs duty category	General merchandise rate (22.25%)
Unknown land tax ARV band	Higher rate band

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Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

Minimum viable -- employer payroll records for the quarter, number of employees, and total remuneration paid.

Recommended -- breakdown of remuneration by employee, employer classification (exempted undertaking vs local), prior quarter returns.

Ideal -- complete payroll system export, benefits-in-kind valuations, employer registration documents, prior annual reconciliation.

Refusal Catalogue

R-BM-1 -- Income tax computation. "Bermuda does not have income tax. If the question relates to income tax in another jurisdiction, use the appropriate country skill."

R-BM-2 -- VAT/sales tax computation. "Bermuda does not have VAT or sales tax. No indirect tax return exists."

R-BM-3 -- Economic substance detailed compliance. "Economic substance requirements are too fact-sensitive. Escalate to a licensed Bermuda practitioner."

R-BM-4 -- Insurance sector-specific rules. "Insurance companies have specialised regulatory and tax requirements. Escalate."

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Section 3 -- Compliance Pattern Library

3.1 Employer Payment Patterns

Pattern	Treatment	Notes
SALARY, WAGES, BONUS, COMMISSION	Payroll tax base	Include in taxable remuneration
BENEFITS IN KIND, HOUSING ALLOWANCE	Payroll tax base	Include -- benefits are taxable remuneration
PENSION CONTRIBUTION (employer)	Check	May be excluded from payroll tax base
REIMBURSEMENT (business expense)	EXCLUDE	Not remuneration if properly documented
CONTRACTOR PAYMENT	Check	If truly independent contractor, not payroll tax
DIRECTOR FEE	Payroll tax base	Include

3.2 Customs Duty Categories

Category	Duty Rate	Notes
General merchandise	22.25% -- 25%	Most goods
Food items	0% -- 10%	Many essentials at lower rates
Clothing and footwear	6.5%
Motor vehicles	33.5%	Standard
Prescription medications	0%	Exempt
Electronics/household goods	25%
Alcohol	High specific rates
Tobacco	High specific rates

3.3 Social Insurance Contributions

Component	Rate/Amount
Employer contribution	BMD 35.69 per week per employee
Employee contribution	BMD 35.69 per week per employee
Self-employed	BMD 63.10 per week

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Section 4 -- Worked Examples

Example 1 -- Payroll Tax for Standard Employer

Input: Employer with annual payroll BMD 600,000, 10 employees. Class not specified.

Computation:

• Employer pays payroll tax at standard rate (10.25% on total payroll)
• Employer payroll tax: BMD 600,000 x 10.25% = BMD 61,500
• Employee portion: deducted from each employee's pay at applicable tier rate
• File quarterly

Example 2 -- Import of Goods

Input: Bermuda resident imports electronics valued at BMD 5,000.

Computation:

• Customs duty at applicable rate (general merchandise ~22.25%)
• Duty: BMD 5,000 x 22.25% = BMD 1,112.50
• No VAT. No sales tax.

Example 3 -- Self-Employed Individual

Input: Self-employed person in Bermuda.

Classification:

• No income tax applies
• Social insurance contributions required (BMD 63.10/week)
• No payroll tax on self-employment income (payroll tax applies to employer-employee relationships only)

Example 4 -- Real Estate Transfer

Input: Property sold for BMD 2,000,000.

Computation:

• First BMD 100,000: 2% = BMD 2,000
• BMD 100,001 -- 500,000: 4% = BMD 16,000
• BMD 500,001 -- 1,000,000: 6% = BMD 30,000
• Above BMD 1,000,000: 8% = BMD 80,000
• Total stamp duty: BMD 128,000

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Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 No Income Tax / No VAT Confirmation

Bermuda has no personal income tax, no corporate income tax, no capital gains tax, no VAT, no sales tax, no withholding tax. Tax Assurance Certificate guarantees this until 2035.

5.2 Payroll Tax Filing

Filing frequency: quarterly. Q1 deadline: April 15. Q2: July 15. Q3: October 15. Q4: January 15. Annual reconciliation: March 15 following year-end. Method: electronic via tax.gov.bm.

5.3 Land Tax

Assessed annually on the annual rental value (ARV) of land and buildings. Progressive rates by ARV band. Payable in instalments (quarterly or semi-annually).

5.4 Stamp Duty on Real Estate

Progressive rates: 2% on first BMD 100,000; 4% on 100,001--500,000; 6% on 500,001--1,000,000; 8% above 1,000,000.

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Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Payroll Tax Exemptions and Concessions

Certain entities may receive payroll tax concessions or exemptions: hotels/tourism sector, new businesses, charitable organizations. Flag for practitioner -- concession eligibility must be confirmed with Tax Commissioner.

6.2 Exempt Company Payroll

Exempted company status relates to Companies Act provisions, NOT tax exemptions on payroll tax. Payroll tax applies to all employers including exempt companies. Verify if any concession rates apply.

6.3 Economic Substance

Entities carrying on "relevant activities" must demonstrate adequate economic substance in Bermuda. Relevant activities include: banking, insurance, fund management, financing and leasing, headquarters, shipping, distribution and service centre, intellectual property, holding entity. Flag for practitioner.

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Section 7 -- Excel Working Paper Template

BERMUDA TAX -- Working Paper
Period: [Quarter / Year]

A. PAYROLL TAX
  A1. Total remuneration paid                      ___________
  A2. Number of employees                          ___________
  A3. Employer classification (Class)              ___________
  A4. Employer payroll tax rate                    ___________
  A5. Employer payroll tax                         ___________
  A6. Employee payroll tax (per tier)              ___________

B. SOCIAL INSURANCE
  B1. Employer pension contributions               ___________
  B2. Employee pension contributions               ___________

C. CUSTOMS DUTIES (if applicable)
  C1. Import value                                 ___________
  C2. Duty rate                                    ___________
  C3. Total duty                                   ___________

REVIEWER FLAGS:
  [ ] Employer classification confirmed?
  [ ] Payroll tax cap checked (BMD 1M/person)?
  [ ] Concession eligibility confirmed?
  [ ] Economic substance filing required?

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Section 8 -- Bank Statement Reading Guide

Bermuda Bank Statement Formats

Bank	Format	Key Fields
Butterfield, HSBC Bermuda	PDF, CSV	Date, Description, Debit, Credit, Balance
Clarien	CSV, PDF	Date, Narrative, Amount

Key Bermuda Banking Terms

Term	Classification Hint
PAYROLL, SALARY	Remuneration -- payroll tax applies
CUSTOMS, DUTY	Import duty payment
LAND TAX	Property tax payment
PENSION, CONTRIBUTORY	Social insurance contribution
INSURANCE PREMIUM	May be exempt financial service

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Section 9 -- Onboarding Fallback

ONBOARDING QUESTIONS -- BERMUDA TAX
1. Are you an employer with employees in Bermuda?
2. How many employees do you have?
3. What is your total annual payroll?
4. Are you an exempted undertaking or local employer?
5. Do you import goods into Bermuda?
6. Do you own property in Bermuda?
7. Are any employees non-Bermudian (work permits)?
8. Have you applied for any payroll tax concessions?
9. Do you conduct any "relevant activities" for economic substance purposes?
10. Prior quarter payroll tax returns available?

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Section 10 -- Reference Material

Key Legislation

Topic	Reference
Payroll tax rates	Payroll Tax Act 1995 (as amended); annual Budget
Payroll tax cap	Payroll Tax Act 1995
Customs duties	Customs Tariff Act 1970
Land tax	Land Tax Act 1967
Stamp duty	Stamp Duties Act 1976
Social insurance	Contributory Pensions Act 1970
Economic substance	Economic Substance Act 2018
Tax Assurance Certificate	Tax Assurance Act

International Reporting

Bermuda has a specific arrangement with the US regarding insurance. No general double taxation treaties.

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PROHIBITIONS

• NEVER state that Bermuda has income tax -- it does not
• NEVER state that Bermuda has VAT or sales tax -- it does not
• NEVER apply VAT calculations to Bermuda transactions
• NEVER apply income tax calculations to Bermuda entities
• NEVER ignore payroll tax obligations (primary compliance requirement)
• NEVER assume payroll tax rates without confirming current Budget rates
• NEVER guess economic substance requirements -- escalate to practitioner
• NEVER present calculations as definitive -- always label as estimated

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Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

The most up-to-date, verified version of this skill is maintained at openaccountants.com. Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.

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