Bermuda Corporate Income Tax

Corporate income tax (Pillar Two CIT)

Historically Bermuda imposed no corporate income tax. The Corporate Income Tax Act 2023 introduced a 15% CIT effective for fiscal years beginning on or after 1 January 2025, but it applies only to Bermuda constituent entities of multinational enterprise (MNE) groups with annual consolidated revenue of EUR 750 million or more. Companies outside that scope remain untaxed on profits.

• Corporate income tax rate (in-scope entities) — 15% percent (In-scope entities) (Corporate Income Tax Act 2023 (https://www.gov.bm/CIT))
• CIT effective date — Fiscal years beginning on or after 1 January 2025 (Corporate Income Tax Act 2023 (https://www.gov.bm/CIT))
• In-scope revenue threshold — MNE groups with annual consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years EUR ((two-of-four-years test — confirm exact wording)) EUR (Corporate Income Tax Act 2023 (https://taxsummaries.pwc.com/bermuda/corporate/taxes-on-corporate-income))
• Companies outside scope — No corporate income tax on profits, income, capital gains, dividends, interest or royalties (PwC Worldwide Tax Summaries — Bermuda, Taxes on corporate income (https://taxsummaries.pwc.com/bermuda/corporate/taxes-on-corporate-income))
• CIT tax base — Net taxable income of the Bermuda constituent entity, computed under GloBE-aligned rules (financial-accounting income with prescribed adjustments) (Corporate Income Tax Act 2023 (https://www.pwc.com/us/en/services/tax/library/pwc-bermuda-enacts-a-corporate-income-tax.html))
• Design alignment — CIT is designed to align with the OECD GloBE (Pillar Two) rules and to qualify as a Covered Tax (Corporate Income Tax Act 2023 (https://www.ey.com/en_gl/technical/tax-alerts/bermuda-parliament-passes-legislation-to-enact-a-15--corporate-i))
• Economic Transition Adjustment (ETA) — Default opening adjustment based on fair value of assets/liabilities (excluding goodwill) as at 30 September 2023; identifiable intangibles amortised over 10 years from 1 January 2025 ((confirm exact mechanics)) (Corporate Income Tax Act 2023 (https://www.pwc.com/us/en/services/tax/library/pwc-bermuda-enacts-a-corporate-income-tax.html))
• Out-of-scope entities — Investment funds, entities less than 80% owned by the Ultimate Parent Entity, and entities qualifying for the branch exemption election may fall outside CIT ((confirm conditions per entity)) (Corporate Income Tax Act 2023 (https://taxsummaries.pwc.com/bermuda/corporate/significant-developments))
• Withholding tax on dividends — 0% (none) percent (PwC Worldwide Tax Summaries — Bermuda, Corporate withholding taxes (https://taxsummaries.pwc.com/bermuda/corporate/other-taxes))
• Withholding tax on interest & royalties — 0% (none) percent (PwC Worldwide Tax Summaries — Bermuda, Corporate withholding taxes (https://taxsummaries.pwc.com/bermuda/corporate/other-taxes))
• CIT filing & payment — In-scope entities must register and file a CIT return; instalment/estimated payments apply during the fiscal year per the administrative regulations ((confirm precise filing and payment dates)) (Corporate Income Tax Act 2023 and Corporate Income Tax administrative regulations (https://www.ey.com/en_gl/technical/tax-alerts/bermuda-releases-final-cit-administrative-regulations))