Bermuda: Second public consultation related to proposed corporate income tax

Second public consultation

Second public consultation

The government of Bermuda on 5 October 2023 released its second public consultation paper regarding the proposed introduction of a corporate income tax.

The second public consultation paper builds upon the general policy framework outlined in the first public consultation paper (read TaxNewsFlash) and provides further details regarding scope and the calculation of taxable income and the income tax.

Key elements of the policy proposals include:

  • The corporate income tax law will be enacted during 2023 and would be effective for fiscal years beginning on or after 1 January 2025.
  • As indicated in the first public consultation paper, the Bermuda income tax rules would be aligned as closely as possible to the global anti-base erosion (GloBE) rules to support consistent and predictable tax outcomes.
  • The Bermuda corporate income tax would apply to each Bermuda tax resident entity and Bermuda permanent establishment that is a constituent entity of a multinational entity (MNE) group that has consolidated revenue of at least €750 million in at least two of the four preceding fiscal years, subject to certain exemptions.
  • The calculation of taxable income begins with “financial accounting net income or loss” determined in accordance with the acceptable financial accounting standard used in preparing the consolidated financial statements of the ultimate parent entity of the MNE group or, at the election of the filing Bermuda constituent entity, another approved financial accounting standard.
  • Financial accounting net income or loss is subject to various adjustments to arrive at taxable income, including adjustments intended to mitigate potential distortions arising from the application of certain financial accounting standards and to support a fair and equitable transition into the Bermuda corporate income tax regime.
  • The Bermuda corporate income tax liability would be calculated based on a statutory tax rate of 15%, subject to reductions for foreign tax credits.
  • The government of Bermuda intends to introduce qualified refundable tax credits which would be determined by reference to substance-based factors (e.g., existing and expanded employment opportunities for Bermudians and Bermuda residents, training, infrastructure, innovation) with further details to be released in 2024.

The second consultation period runs from 5 October to 30 October 2023.  

The government of Bermuda has indicated that a third public consultation document, including full draft legislation, is expected to be released on or about 10 November 2023.

For more information, contact a KPMG tax professional in Bermuda:

Sarah Robey |


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