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openaccountants/skills/bermuda-tax.md
bermuda-tax.md327 lines12.1 KB
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1---
2name: bermuda-tax
3description: >
4 Use this skill whenever asked about Bermuda taxation, payroll tax, customs duties, or the absence of income tax and VAT in Bermuda. Trigger on phrases like "Bermuda tax", "Bermuda VAT", "Bermuda payroll tax", "Bermuda customs", or any request involving Bermuda tax compliance. Bermuda does NOT have income tax, capital gains tax, or VAT. Revenue is raised through payroll tax, customs duties, and various fees. ALWAYS read this skill before handling any Bermuda tax work.
5version: 2.0
6jurisdiction: BM
7tax_year: 2025
8category: international
9---
10 
11# Bermuda Tax Compliance Skill v2.0
12 
13---
14 
15## Section 1 -- Quick Reference
16 
17| Field | Value |
18|---|---|
19| Country | Bermuda |
20| Tax | Payroll tax (primary), customs duties, land tax, stamp duty, social insurance |
21| Currency | BMD (1:1 with USD) |
22| Tax year | Calendar year |
23| Primary legislation | Payroll Tax Act 1995 (as amended); Customs Tariff Act 1970 |
24| Supporting legislation | Companies Act 1981; Land Tax Act 1967; Stamp Duties Act 1976 |
25| Tax authority | Office of the Tax Commissioner |
26| Filing portal | https://www.tax.gov.bm |
27| Filing deadline | Payroll tax quarterly (Apr 15, Jul 15, Oct 15, Jan 15); annual reconciliation March 15 |
28| Contributor | Open Accountants Community |
29| Validated by | Pending -- requires sign-off by a licensed Bermuda practitioner |
30| Skill version | 2.0 |
31 
32### Tax Landscape Overview
33 
34| Tax Type | Status |
35|---|---|
36| Income Tax (personal) | None |
37| Income Tax (corporate) | None |
38| Capital Gains Tax | None |
39| Value Added Tax (VAT) | None |
40| Sales Tax | None |
41| Withholding Tax | None |
42| Payroll Tax | Yes -- primary revenue source |
43| Customs Duties | Yes -- on imports |
44| Land Tax | Yes -- on property |
45| Stamp Duty | Yes -- on real estate transfers |
46| Social Insurance | Yes -- contributory pension scheme |
47 
48Bermuda has a legislative guarantee (Tax Assurance Certificate) that no income, capital gains, or withholding taxes will be introduced before 2035.
49 
50### Payroll Tax Rates (Current)
51 
52| Employer Rate Tier | Employer Rate |
53|---|---|
54| Up to BMD 200,000 annual payroll | Reduced rate (concession) |
55| BMD 200,001 -- 350,000 | Intermediate rate |
56| BMD 350,001 -- 500,000 | Standard rate |
57| Above BMD 500,000 | Standard rate (10.25%) |
58 
59| Employee Income Tier | Employee Rate |
60|---|---|
61| Up to BMD 48,000 | 0.50% |
62| BMD 48,001 -- 96,000 | 9.25% |
63| BMD 96,001 -- 200,000 | 10.00% |
64| BMD 200,001 -- 500,000 | 11.50% |
65| BMD 500,001 -- 1,000,000 | 12.50% |
66 
67Payroll tax is capped at BMD 1,000,000 per person per year.
68 
69### Conservative Defaults
70 
71| Ambiguity | Default |
72|---|---|
73| Unknown employer classification | Standard rate |
74| Unknown employee income tier | Highest applicable rate |
75| Unknown customs duty category | General merchandise rate (22.25%) |
76| Unknown land tax ARV band | Higher rate band |
77 
78---
79 
80## Section 2 -- Required Inputs and Refusal Catalogue
81 
82### Required Inputs
83 
84**Minimum viable** -- employer payroll records for the quarter, number of employees, and total remuneration paid.
85 
86**Recommended** -- breakdown of remuneration by employee, employer classification (exempted undertaking vs local), prior quarter returns.
87 
88**Ideal** -- complete payroll system export, benefits-in-kind valuations, employer registration documents, prior annual reconciliation.
89 
90### Refusal Catalogue
91 
92**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."
93 
94**R-BM-2 -- VAT/sales tax computation.** "Bermuda does not have VAT or sales tax. No indirect tax return exists."
95 
96**R-BM-3 -- Economic substance detailed compliance.** "Economic substance requirements are too fact-sensitive. Escalate to a licensed Bermuda practitioner."
97 
98**R-BM-4 -- Insurance sector-specific rules.** "Insurance companies have specialised regulatory and tax requirements. Escalate."
99 
100---
101 
102## Section 3 -- Compliance Pattern Library
103 
104### 3.1 Employer Payment Patterns
105 
106| Pattern | Treatment | Notes |
107|---|---|---|
108| SALARY, WAGES, BONUS, COMMISSION | Payroll tax base | Include in taxable remuneration |
109| BENEFITS IN KIND, HOUSING ALLOWANCE | Payroll tax base | Include -- benefits are taxable remuneration |
110| PENSION CONTRIBUTION (employer) | Check | May be excluded from payroll tax base |
111| REIMBURSEMENT (business expense) | EXCLUDE | Not remuneration if properly documented |
112| CONTRACTOR PAYMENT | Check | If truly independent contractor, not payroll tax |
113| DIRECTOR FEE | Payroll tax base | Include |
114 
115### 3.2 Customs Duty Categories
116 
117| Category | Duty Rate | Notes |
118|---|---|---|
119| General merchandise | 22.25% -- 25% | Most goods |
120| Food items | 0% -- 10% | Many essentials at lower rates |
121| Clothing and footwear | 6.5% | |
122| Motor vehicles | 33.5% | Standard |
123| Prescription medications | 0% | Exempt |
124| Electronics/household goods | 25% | |
125| Alcohol | High specific rates | |
126| Tobacco | High specific rates | |
127 
128### 3.3 Social Insurance Contributions
129 
130| Component | Rate/Amount |
131|---|---|
132| Employer contribution | BMD 35.69 per week per employee |
133| Employee contribution | BMD 35.69 per week per employee |
134| Self-employed | BMD 63.10 per week |
135 
136---
137 
138## Section 4 -- Worked Examples
139 
140### Example 1 -- Payroll Tax for Standard Employer
141 
142**Input:** Employer with annual payroll BMD 600,000, 10 employees. Class not specified.
143 
144**Computation:**
145- Employer pays payroll tax at standard rate (10.25% on total payroll)
146- Employer payroll tax: BMD 600,000 x 10.25% = BMD 61,500
147- Employee portion: deducted from each employee's pay at applicable tier rate
148- File quarterly
149 
150### Example 2 -- Import of Goods
151 
152**Input:** Bermuda resident imports electronics valued at BMD 5,000.
153 
154**Computation:**
155- Customs duty at applicable rate (general merchandise ~22.25%)
156- Duty: BMD 5,000 x 22.25% = BMD 1,112.50
157- No VAT. No sales tax.
158 
159### Example 3 -- Self-Employed Individual
160 
161**Input:** Self-employed person in Bermuda.
162 
163**Classification:**
164- No income tax applies
165- Social insurance contributions required (BMD 63.10/week)
166- No payroll tax on self-employment income (payroll tax applies to employer-employee relationships only)
167 
168### Example 4 -- Real Estate Transfer
169 
170**Input:** Property sold for BMD 2,000,000.
171 
172**Computation:**
173- First BMD 100,000: 2% = BMD 2,000
174- BMD 100,001 -- 500,000: 4% = BMD 16,000
175- BMD 500,001 -- 1,000,000: 6% = BMD 30,000
176- Above BMD 1,000,000: 8% = BMD 80,000
177- Total stamp duty: BMD 128,000
178 
179---
180 
181## Section 5 -- Tier 1 Rules (When Data Is Clear)
182 
183### 5.1 No Income Tax / No VAT Confirmation
184 
185Bermuda 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.
186 
187### 5.2 Payroll Tax Filing
188 
189Filing 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.
190 
191### 5.3 Land Tax
192 
193Assessed annually on the annual rental value (ARV) of land and buildings. Progressive rates by ARV band. Payable in instalments (quarterly or semi-annually).
194 
195### 5.4 Stamp Duty on Real Estate
196 
197Progressive 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.
198 
199---
200 
201## Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)
202 
203### 6.1 Payroll Tax Exemptions and Concessions
204 
205Certain 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.
206 
207### 6.2 Exempt Company Payroll
208 
209Exempted 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.
210 
211### 6.3 Economic Substance
212 
213Entities 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.
214 
215---
216 
217## Section 7 -- Excel Working Paper Template
218 
219```
220BERMUDA TAX -- Working Paper
221Period: [Quarter / Year]
222 
223A. PAYROLL TAX
224 A1. Total remuneration paid ___________
225 A2. Number of employees ___________
226 A3. Employer classification (Class) ___________
227 A4. Employer payroll tax rate ___________
228 A5. Employer payroll tax ___________
229 A6. Employee payroll tax (per tier) ___________
230 
231B. SOCIAL INSURANCE
232 B1. Employer pension contributions ___________
233 B2. Employee pension contributions ___________
234 
235C. CUSTOMS DUTIES (if applicable)
236 C1. Import value ___________
237 C2. Duty rate ___________
238 C3. Total duty ___________
239 
240REVIEWER FLAGS:
241 [ ] Employer classification confirmed?
242 [ ] Payroll tax cap checked (BMD 1M/person)?
243 [ ] Concession eligibility confirmed?
244 [ ] Economic substance filing required?
245```
246 
247---
248 
249## Section 8 -- Bank Statement Reading Guide
250 
251### Bermuda Bank Statement Formats
252 
253| Bank | Format | Key Fields |
254|---|---|---|
255| Butterfield, HSBC Bermuda | PDF, CSV | Date, Description, Debit, Credit, Balance |
256| Clarien | CSV, PDF | Date, Narrative, Amount |
257 
258### Key Bermuda Banking Terms
259 
260| Term | Classification Hint |
261|---|---|
262| PAYROLL, SALARY | Remuneration -- payroll tax applies |
263| CUSTOMS, DUTY | Import duty payment |
264| LAND TAX | Property tax payment |
265| PENSION, CONTRIBUTORY | Social insurance contribution |
266| INSURANCE PREMIUM | May be exempt financial service |
267 
268---
269 
270## Section 9 -- Onboarding Fallback
271 
272```
273ONBOARDING QUESTIONS -- BERMUDA TAX
2741. Are you an employer with employees in Bermuda?
2752. How many employees do you have?
2763. What is your total annual payroll?
2774. Are you an exempted undertaking or local employer?
2785. Do you import goods into Bermuda?
2796. Do you own property in Bermuda?
2807. Are any employees non-Bermudian (work permits)?
2818. Have you applied for any payroll tax concessions?
2829. Do you conduct any "relevant activities" for economic substance purposes?
28310. Prior quarter payroll tax returns available?
284```
285 
286---
287 
288## Section 10 -- Reference Material
289 
290### Key Legislation
291 
292| Topic | Reference |
293|---|---|
294| Payroll tax rates | Payroll Tax Act 1995 (as amended); annual Budget |
295| Payroll tax cap | Payroll Tax Act 1995 |
296| Customs duties | Customs Tariff Act 1970 |
297| Land tax | Land Tax Act 1967 |
298| Stamp duty | Stamp Duties Act 1976 |
299| Social insurance | Contributory Pensions Act 1970 |
300| Economic substance | Economic Substance Act 2018 |
301| Tax Assurance Certificate | Tax Assurance Act |
302 
303### International Reporting
304 
305Bermuda has a specific arrangement with the US regarding insurance. No general double taxation treaties.
306 
307---
308 
309## PROHIBITIONS
310 
311- NEVER state that Bermuda has income tax -- it does not
312- NEVER state that Bermuda has VAT or sales tax -- it does not
313- NEVER apply VAT calculations to Bermuda transactions
314- NEVER apply income tax calculations to Bermuda entities
315- NEVER ignore payroll tax obligations (primary compliance requirement)
316- NEVER assume payroll tax rates without confirming current Budget rates
317- NEVER guess economic substance requirements -- escalate to practitioner
318- NEVER present calculations as definitive -- always label as estimated
319 
320---
321 
322## Disclaimer
323 
324This 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.
325 
326The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.
327 

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About

Use this skill whenever asked about Bermuda taxation, payroll tax, customs duties, or the absence of income tax and VAT in Bermuda. Trigger on phrases like "Bermuda tax", "Bermuda VAT", "Bermuda payroll tax", "Bermuda customs", or any request involving Bermuda tax compliance. Bermuda does NOT have income tax, capital gains tax, or VAT. Revenue is raised through payroll tax, customs duties, and various fees. ALWAYS read this skill before handling any Bermuda tax work.

BMty-2025

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