Mission Statement To leverage modern technology to ensure taxpayer compliance through quality service and effective enforcement.
Vision Statement To be a modern, innovative, fair and user-friendly tax authority.
Core Values Our commitment to serve one another within OTC is extended to our internal and external stakeholders as reflected in our core values:
- Professionalism
- Integrity
- Confidentiality
- Cooperation
Services
The OTC provides services to the public in relation to the reporting and collection of the following taxes. All services provided are free of charge except for stamp duty fees (refer to Stamp Duties section below).
Payroll Tax Payroll Tax, introduced on 1st April 1995, is charged on every employer and self-employed person at the standard rate. The tax base consists of actual remuneration paid, given or assessed by the employer and self-employed person to every employee and deemed employee plus any benefits derived by the employee as a result of his/her employment, whether paid in cash or in kind.
Payroll Tax is payable on a quarterly basis and is charged under the authority of the Payroll Tax Act 1995 and the Payroll Tax Rates Act 1995.
Corporate Services Tax Corporate Services Tax, introduced 1st April 1995, is charged on a local service provider on the gross earned fee revenue charged to an exempted undertaking for taxable corporate services provided during each tax period.
Corporate Services Tax is charged under the authority of the Corporate Services Tax Act 1995. The tax is charged at the rate of 7.00% and is payable quarterly.
Betting Duty Betting Duty is charged under the authority of the Miscellaneous Taxes Act 1976 and the Betting Act 1975 on licensed bookmakers or pool betting agents who negotiate the bets. The tax is charged at the rate of 20% on all bets made, received or negotiated by the licensed persons.
Land Tax Land Tax is charged under the authority of the Land Valuation and Tax Act 1967 and the Land Tax Act 1967. Land tax is assessed on the annual rental value of each valuation unit, depending on whether the unit is a private dwelling or a commercial property.
Foreign Currency Purchase Tax (FCPT) Foreign Currency Purchase Tax is charged under the authority of the Foreign Currency Purchase Tax Act 1975. This tax represents a charge on foreign currency purchased by a resident from a local bank and is payable at the rate of 1.25%.
Financial Services Tax (FST)
Effective 1 April 2017, FST is a tax charged on the following financial services providers:
- Banks, 0.0075% on its consolidated gross assets as at the end of a tax period;
- Domestic insurers, 3.5% of gross premiums written in a tax period, excluding premiums relating solely to health insurance and
- Money Service Business, 1% on aggregated outgoing money transmission volume in a tax period.
Every financial services provider chargeable to FST shall within 30 days after each tax period submit to the OTC a return specifying the consolidated gross assets or gross premiums or aggregated outgoing money volume and pay the financial services tax due in respect of that tax period.
Hotel Occupancy Tax Hotel Occupancy Tax (introduced in 1973) is charged on the proprietors of hotels licensed under the hotels (Licensing and Control) Act 1969. It is calculated as a percentage of the rack rate charged to the hotel's guests. The term 'rack rate charge' means the total charge made by the hotel to the guest for accommodation, and includes meals where a separate charge has not been made.
Hotel Occupancy Tax is charged under the authority of the Miscellaneous Taxes Act 1976 and the Miscellaneous Taxes (Rates) Act 1980 and their respective Amendments. Tax is charged at the rate of 7.25% and is payable on a monthly basis.
Cruise Ship Departure Tax This tax is charged under the authority of the Miscellaneous Taxes Act 1976 in respect of every passenger departing from Bermuda by passenger ship. The tax is payable by the owner, operator or agent of the vessel within seven (7) days from the date of departure.
Transport Infrastructure Tax (TIT) TIT came into effect on 1st May 2020 and is charged under the authority of the Miscellaneous Taxes Act 1976. TIT is charged on the owner, operator or agent of a vessel in respect of each visit by a passenger ship to Bermuda where the ship is docked in Dockyard, or is at anchor with tender to Dockyard.
TIT is calculated by reference to the number of passengers departing from Bermuda on the ship at a rate of $25 per passenger, where the ship's visit to Bermuda includes any day between 1 April and 31 October. There is no charge for the rest of the year.
Yacht Arrival Tax This tax is charged under the authority of the Miscellaneous Taxes Act 1976 in respect of every passenger arriving in Bermuda by pleasure craft. The tax is payable on arrival by the owner/operator of the pleasure craft.
Stamp Duties Stamp duty represents a duty or tax on various instruments (i.e. documents) as specified under the various Heads of Charge in the Schedule to the Stamp Duties Act 1976 (as amended). These include legal documents such as mortgage deeds and conveyance deeds. The various Heads of Charge stipulate the deadline for the duty payable depending upon the nature of the instrument.
Some stamp duty fees are as follows: a. Adjudication fee of $212.00 (per section 22 of the Stamp Duties Act 1976); b. Application fee for primary family homestead designation - $28; and c. A fee for an application for a re-issue of a certificate obtained for primary family homestead designation - $58
Timesharing Service Tax Introduced with effect from January 1982, Timesharing Services Tax is charged on the managing agent of a timesharing property as a percentage of the membership and maintenance fees charged in respect of the operational and maintenance costs of the timesharing scheme. The tax is charged at the rate of 5% and is payable on a monthly basis.
Timesharing Occupancy Tax Introduced with effect from 1st August 1981, Timesharing Occupancy Tax is charged on the developing owner of a timesharing property as a percentage of the purchase price of each timesharing interval. The tax is chargeable on the initial purchase and the resale of each interval.
Timesharing Occupancy Tax is charged under the authority of the Miscellaneous Taxes Act 1976 and the Miscellaneous Taxes (Rates) Act 1980. The tax is charged at the rate of 10% and is payable within a specified period of the sale/resale of each timesharing interval.
Programmes
The OTC administers various relief programmes which can be legislated or administrative. Current relief programmes include Senior Land Tax Relief and Payroll Tax Employer Portion relief.
Persons 65 years old or over who own and occupy a private dwelling, can be exempted from $1,941 in Land Tax annually. This exemption applies to homes with annual rental value (ARV) up to $45,500. Tax will be due on the value of the ARV in excess of $45,500. Application forms must be completed and can be found online at Seniors Land Tax Exemption.
Employer engaging New Hires; and employers with Disabled Persons can apply for Employer portion tax relief. With effect from April 1, 2019, approved retail establishments are those with remuneration greater than $500,000 whose primary sales are in fashion, shoes, jewellery, and perfume. New Hire (NH) relief was legislated under the Payroll Tax Amendment Act 2018 and is effective from April 1, 2018 – March 31, 2026. The engaging of the NH must have the effect of increasing the number of full time persons reported on the tax return compared to the number of full time persons reported in the baseline quarter of January – March 2018. In order for an employer to qualify for the Disabled Person relief, a physician must certify that the Employees disability will impede the person's chances of getting full time employment. This came into effect from April 1, 2018 however an employer can also apply for persons hired prior to that date.
New Start Up relief is available for small businesses. An employer who establishes a small business (within the meaning of the Bermuda Economic Development Corp Act 1980) and registers it under section 4 (1) (c) of that act will be exempt from the Employer portion of tax for the first four (4) quarters of establishing such a business. A Letter must be provided by BEDC confirming eligibility.
Relief is also available for projects that have been approved by the Minister of Finance as projects of national importance.
