Global Daily Tax News, Bermuda Planning Payroll Tax Law Amendments, (Nov 18, 2024)

Bermuda's Governor, Rena Lalgie, outlined the territory's tax reform priorities during the new parliamentary term, in her recently delivered Speech from the Throne, focusing on payroll tax changes and the implementation of corporation tax.

On payroll taxes, the Governor said parliament will consider legislation to eliminate the employer's portion of payroll tax on Bermudian taxpayers continuing to work past age 65. Further, the Government intends to remove payroll tax on redundancy pay and introduce a new tax rate structure for operators of minibuses.

On the introduction of a corporate tax under the OECD's Pillar Two tax framework, the Governor said: "To support the implementation of Bermuda's corporate income tax regime, legislation will be introduced to update the Corporate Income Tax (CIT) framework and address matters relating to use of excess tax revenue."

"Based on the recommendations from the Tax Reform Commission and the International Tax Working Group, this legislation will codify how funds collected by the Corporate Income Tax regime will be reserved for use. The projections state that with the next 10 years, the Government should have enough in additional tax receipts to eliminate Bermuda's debt and establish a sovereign wealth fund to make strategic investments for Bermuda's future."

The new CIT, planned for implementation in 2025, applies only to large multinational corporations with revenues exceeding EUR750m, at a rate of 15 percent.

In October 2024, the Government said the Tax Reform Commission is actively reviewing ways to reduce existing taxes to lower costs for local businesses and residents.