Bermuda: Third public consultation related to proposed corporate income tax

First look at many of the detailed technical provisions

Third public consultation

The government of Bermuda on 15 November 2023 released its third public consultation paper regarding the introduction of a corporate income tax.

The third public consultation paper builds upon the general policy framework outlined in the first and second public consultation papers (read TaxNewsFlash) and includes 68 pages of draft Bermuda income tax legislation, providing a first look at many of the detailed technical provisions. Key elements of the policy proposals include:

  • The corporate income tax law would be enacted during 2023 and would be effective for fiscal years beginning on or after 1 January 2025.
  • As previously indicated, the Bermuda income tax rules are intended to align 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 Bermuda constituent entity, another approved financial accounting standard.
  • Financial accounting net income or loss would be 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 that will 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 third consultation period runs from 15 November to 30 November 2023. 

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

Sarah Robey |



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