On Friday, the Premier and Minister of Finance, the Hon. E. David Burt JP, MP, tabled a bill in the House of Assembly entitled "Corporate Income Tax Agency Act 2024". The tabling of this bill represents another significant milestone for Bermuda in the development and implementation of an appropriate and effective corporate income tax regime to meet the changing global tax environment.
In December 2023, Bermuda enacted the Corporate Income Tax Act 2023, which was a historic event for our jurisdiction, which for more than 100 years had a tax system that was primarily consumption-based. In general, the Corporate Income Tax Act created a framework whereby Bermuda will assess a 15% corporate income tax on the Bermuda business of multinational groups that are "in scope" of the Organization for Economic Cooperation & Development Pillar Two Rules (commonly referred to as the Global Minimum Tax).
This bill aims to establish a Corporate Income Tax Agency (CITA) as a corporate body that administers the Bermuda Corporate Income Tax (CIT) regime. Jurisdictions around the globe have developed many different models to collect their taxes, as there are no global requirements dictating their specific structure.
Having developed a reputation for robust and effective regulatory oversight, the Ministry incorporated, to the extent appropriate, key characteristics of the structure of our well-respected financial services regulator, but where necessary, modified these characteristics to take account of the differing responsibilities between a regulator and a tax authority, using a G-7 country as a model for effective reporting, governance and oversight of our tax framework.
The agency's structure allows for a Board of Directors to ensure effective governance and oversight and a Chief Executive Officer and staff responsible for effective and appropriate tax administration and enforcement. Ensuring that persons with the required experience and expertise to manage the responsibilities appropriately and consistent with Bermuda's reputation as a premier international financial centre are selected for these roles will be a key next step for the Government.
Through the Ministry of Finance, the Government of Bermuda remains committed to working with all stakeholders to ensure that Bermuda remains an effective and cooperative partner while appropriately addressing global tax matters.