Bermuda Corporate Income Tax

Key insights to know

Effective 1 January 2025, Bermuda's Corporate Income Tax regime operates with a number of Bermuda-specific provisions, modifications, and exclusions that supplement its OECD Pillar Two-inspired framework. These jurisdiction-specific rules require careful analysis when assessing whether an entity falls within the scope of the regime and determining its resulting compliance obligations.

Certain Bermuda entities and MNE Groups may be excluded from the Bermuda corporate income tax. For example, excluded entities as defined by the legislation and MNE Groups with a limited international footprint.

A key feature of the regime is the Economic Transition Adjustment (ETA), a transitional mechanism unique to Bermuda that may significantly influence an organization's initial tax position. ETA as a feature of the Bermuda corporate income tax that is not included within the OECD Pillar Two GloBE Model Rules. The ETA will be applicable unless a taxpayer has elected to opt out of it.

The legislation also provides a range of elections that allows organizations flexibility in applying certain aspects of the rules, helping businesses align tax outcomes with their operational, financial reporting, and compliance objectives.

Elections may be made with the first tax return. For inscope Multi-national Enterprises (MNE) Groups, the Bermuda corporate income tax disregards previously issued Tax Assurance Certificates.

As organizations adapt to Bermuda’s evolving tax landscape, understanding the implications of scope, elections, compliance requirements, and the treatment of legacy arrangements, including previously issued Tax Assurance Certificates, is critical. Deloitte helps businesses navigate these complexities through strategic tax advisory, financial reporting support, and end-to-end compliance services tailored to the Bermuda CIT framework.

Additionally, substance based tax credit applies specifically to insurance companies with a significant on-island presence and related Bermuda-based payroll and operating expenditures. We advise insurance companies on the application of Bermuda’s payroll-linked tax credits, including circumstances where the group is not otherwise subject to CIT. Our services include eligibility assessments, calculations based on job and expense-based components, related accounting considerations, and preparation of required tax filings, with credits available to offset CIT or payroll tax or be claimed as a cash refund.