There are several corporate structures that can be adopted in Bermuda, with the most common being the company limited by shares incorporated under the Companies Act 1981 (as amended) (the “Companies Act”) or, less commonly, directly by a private Act of the Bermuda legislature. Companies limited by shares are typically used for holding companies, operating companies, listed entities and investment vehicles. Shareholders’ liability on a winding up of the company is limited to the unpaid amount on their shares. It is also possible to form a company limited by guarantee under the Companies Act; these are used primarily for non-profit or quasi-public purposes (eg, charities, clubs and industry bodies). Members’ liability is limited to a predetermined fixed amount on the winding up of the company.

Under the Companies Act, companies may be either “exempted” or “local”. Exempted companies are the standard vehicle for international business and may carry on business outside Bermuda and with other exempted undertakings but not generally with the Bermuda public, unless they are licensed to do so by the Minister of Finance (the “Minister”). Local companies must be at least 60% owned and controlled by Bermudians (or be licensed by the Minister to conduct business in Bermuda).

Bermuda also permits limited liability companies (LLCs) under the Limited Liability Company Act 2016. LLCs are based on the Delaware limited liability company and offer flexibility in terms of governance. They are most commonly used for joint ventures, investment holding structures and private equity entities, including general partners. Generally speaking, the liability of members of an LLC will be limited to their agreed capital contribution and any other obligations expressly assumed by them under the LLC agreement.

Bermuda also has partnership legislation that enables the formation of exempted and local general partnerships and limited partnerships, which can elect to have separate legal personality, giving them the ability to hold property in the partnership’s name. General partners will have unlimited liability for the partnership’s obligations, whereas the limited partners in a limited partnership will not be liable for the partnership’s obligations, provided they do not take part in the management of it.

It is possible to register branches or permanent establishments of overseas companies and partnerships in Bermuda, which offers flexibility to those seeking to domicile outside of their country of jurisdiction for tax or commercial purposes.

Bermuda also provides structures that provide statutory segregation for exposure to liabilities, under the Segregated Accounts Companies Act, 2000 and the Incorporated Segregated Accounts Companies Act, 2019. These structures enable the assets and liabilities of a particular segregated or incorporated segregated account to be ringfenced from the assets and liabilities of other segregated accounts or incorporated segregated accounts, and from the company’s general operating accounts.

Bermuda’s Corporate Income Tax Act 2023 (as amended) (“CIT Act”) applies to in-scope Bermuda companies, limited liability companies, overseas companies registered in Bermuda that meet the definition of “Bermuda Permanent Establishments” (see further below), partnerships and similar arrangements.

To be caught by the CIT Act, an entity must be a Bermuda Constituent Entity (BCE) that is a constituent entity of an In-Scope MNE Group and either a Bermuda Tax Resident Entity – ie, an entity incorporated, formed or organised in Bermuda, unless the entity is tax resident in another jurisdiction under the laws of that jurisdiction based on its location of management and control; or

• a Bermuda Permanent Establishment – ie, a fixed place of business in Bermuda through which the business of a non-Bermuda Tax Resident Entity is wholly or partly carried on in accordance with Article 5 of the OECD Model Tax Convention (ie, a permanent establishment, branch or agency).

For these purposes, an “In-Scope MNE Group” is a group that meets the relevant revenue threshold of EUR750 million or more in annual revenues in at least two of the four fiscal years immediately preceding the fiscal year in question and is a multinational enterprise group comprising an ultimate parent entity and one or more entities located in another jurisdiction.

A “group” is defined for the purposes of the CIT Act as:

• a collection of entities that are related through ownership or control such that the assets, liabilities, income, expenses and cash flows of those entities are included in the consolidated financial statements of the ultimate parent entity (UPE), or are excluded from the consolidated financial statements of the UPE solely on size or materiality grounds, or on the grounds that the entity is held for sale; or
• an entity that is located in one jurisdiction and has one or more permanent establishments located in other jurisdictions, provided that the entity is not part of another group as described directly above.

Only groups that are made up of one or more BCEs (a “BCE Group”) and are part of an In-Scope MNE Group are subject to corporate income tax under the CIT Act.

Under the CIT Act, the charge to tax is imposed on the net taxable income of a BCE Group, not on each BCE on a standalone basis. All BCEs that are members of the same In-Scope MNE Group are aggregated, and a single corporate income tax computation is calculated for that BCE Group. One of the members of the BCE Group is designated as the filing entity. However, each BCE is jointly and severally liable for the tax chargeable to the BCE Group.

The typical use cases for transparent business structures would be:

• investment holding structures in investment fund and insurance groups;
• joint ventures; or
• corporate holding structures where investors or shareholders want look-through treatment for tax and accounting purposes, such as where the entity is a holding or feeder vehicle rather than an operating entity.

Their use is largely dictated by, and aligned to, the investors’ or shareholders’ home country tax rules.

Under the CIT Act, where an entity is considered fiscally transparent, its income, expenditure and profits or losses are treated as those of its parent company, rather than being taxed at the entity level offering the look-through treatment. The BCE shall be regarded as fiscally transparent for a fiscal year to the extent its financial accounting net income or loss has been allocated to its owner, and the portion allocated shall be excluded from the determination of the amount used to compute financial account net income or loss.

To be caught by the CIT Act, an entity must be a BCE (see 1.1 Corporate Forms and Their Tax Treatment).

For In-Scope MNE Groups, the CIT Act tax rate is 15% of the BCE Group’s net taxable income for the relevant fiscal year, minus any applicable tax credits.

Bermuda does not impose a general personal income tax; rather, Bermuda imposes payroll tax (payable by the employer and employee) on remuneration. Payroll tax is charged at progressive rates, with a tax cap of BMD1 million per person. For fiscal years 2025 and 2026, the top employer rate is 10%, applying to remuneration of between BMD500,001 and BMD1 million, and the top employee rate is 12.5%, applying to remuneration of between BMD500,001 and BMD1 million.

Corporate income tax is charged on the net taxable income of a BCE Group for each fiscal year.

The first step is to calculate the financial accounting net income or loss of each BCE, as reflected in the consolidated financial statements of the relevant MNE group in accordance with the applicable generally accepted accounting standard (IFRS or GAAP) determined on an accruals basis. The amounts are aggregated at the BCE Group level in accordance with the provisions of the CIT Act.

The next step is to calculate the taxable income or loss in accordance with the CIT Act, including:

• applying adjustments for fiscal transparency (excluding the portion of the income or loss of a fiscally transparent entity from its own tax base and including it at the level of the relevant owner within the BCE Group);
• adjusting for prior period errors and changes in accounting principles;
• applying statutory adjustments, as set out in Parts 5–7 of the CIT Act;
• adjusting for the impact of any exemptions and elections;
• applying adjustments to income or loss arising from the exclusion for qualifying international shipping activities (see 2.3 Special Incentives); and
• applying special rules to any Bermuda Permanent Establishments of non-Bermuda entities and flow-through entities owned by BCEs.

The taxable income is then aggregated at the BCE Group level, and the net taxable income is calculated by deducting taxable losses and loss carry-forward deductions.

Economic Transition Adjustment (ETA)

The ETA allows entities to adjust their tax position by revaluing assets and liabilities to their fair market value as of 30 September 2023, over a ten-year period. It adjusts taxable income to exclude gains or losses that were accrued before the transition date but are recognised in accounting profit afterwards, thereby preventing both double taxation and the taxation of historic, pre-tax profits. This ensures that the CIT Act applies only to economic income arising after the commencement of the regime.

Tax Loss Carry-Forward Election

The opening tax loss carry-forward election allows entities to carry forward losses incurred over a prior five-year period to offset future profits. There is an 80% limit on the use of tax loss carry-forward deductions. This limit may not apply where an insurance company incurs a shock loss (an event with a probability of 0.5% or less). Only losses arising under the CIT Act after the introduction of corporate income tax, including any permitted transitional losses, may be carried forward to offset future taxable income.

Exemptions and Elections

There are certain exemptions and elections (which may apply annually, for five years or on a one-off basis, depending on the specific exemption or election), including:

• MNE groups with a limited international footprint (ie, constituent entities in five or fewer jurisdictions outside of Bermuda) where the total net book value of tangible assets of all constituent entities located outside Bermuda does not exceed EUR50 million and no parent entity is required to apply an income inclusion rule with respect to any constituent entity of the MNE group located in Bermuda;
• the de minimis exemption, which is where the average revenue is less than EUR10 million and the average net taxable income (or loss) is less than EUR1 million;
• elections to treat <80% owned entities as BCEs;
• elections to enable entities to determine the composition of a BCE Group;
• elections to determine financial accounting net income or loss in accordance with an approved accounting standard;

• elections relating to investment entities (see 2.3 Special Incentives); and

• transaction-specific elections.

The tax rate is then applied to the extent that the BCE Group has net taxable income, and available foreign tax credits and other permitted tax credits are deducted to determine the final tax liability.

The CIT Act was designed to align with the OECD’s Pillar Two framework rules (the “GloBE Rules”). The objective is to reduce the amount of top-up tax payable to other jurisdictions, to prevent double taxation of profits earned in Bermuda, rather than to provide industry-specific tax incentives.

There are no special incentives under the CIT Act specifically for technology investments. Relief may arise through the tax credit framework or underlying financial accounting treatments.

The CIT Act has a number of industry-specific provisions.

International Shipping Income Exclusion

This exclusion is contained in Section 36 of the CIT Act and operates as a statutory adjustment to a BCE’s financial accounting net income or loss, by excluding a BCE’s income (or loss) derived from qualifying international shipping activities, which could potentially create opportunities for Bermuda’s economy and preserve its reputation as a shipping and maritime headquarters jurisdiction. The provisions under the CIT Act align to the equivalent provisions under the GloBE Rules. To qualify for the exclusion, the BCE must have its strategic or commercial management in Bermuda. This requirement aligns closely with Bermuda’s economic substance rules for entities conducting the relevant activity of “shipping business”, which applies to operators of ships in international waters.

Investment Funds

Investment funds have special treatment under the CIT Act. The subsidiaries of investment funds that are UPEs are excluded from corporate income tax. Most funds will not form part of a consolidated group for accounting purposes and would therefore be excluded or, to the extent that they do form part of a consolidated group, can usually avail themselves of the exemptions and exclusions such that corporate income tax will not apply. In particular, the taxable distribution method election may be used where a BCE owns an interest in an investment entity or an insurance investment entity and enables the treatment of the BCE’s ownership interest as generating taxable income that is distributed to the investors rather than being taxed at the entity level.

Tax Credits for Insurance Industry

These include substance-based tax credits that were designed for (re)insurers to reward tangible on-island presence, thereby boosting jobs and local spending, and incentivising economic substance for international businesses, especially those tied to the (re)insurance sector. The credit is refundable within four years and can therefore be used to reduce tax liability. If it is not used in full by the fourth year, then it is refunded in full.

BCE Groups with a least one entity licensed as an insurer under the Insurance Act 1978 will qualify. The BCE Group must derive over 50% of its Bermuda revenue from these insurance activities. The job-based component provides an uplift for eligible payroll tax expenses for employees who do not require a Bermuda work permit, and benefits for investment in training-related expenditures. It is based on the total number of full-time eligible employees for a fiscal year, starting at 0% for groups with fewer than 20 employees and increasing to up to 50% for groups with 150 or more employees. The expense-based benefit is calculated based on eligible Bermuda expenses, including premises, tangible assets, training, eligible services and other expenses, with a total cap of 25%.

Other Tax Credits

The community development tax credit provides a 25% credit for eligible charitable contributions, applicable across all industries. To qualify for this credit, businesses must meet a minimum threshold of USD300,000 in cash contributions over a three-year rolling period. Contributions must be directed to registered Bermuda charities with audited accounts, ensuring that at least 75% of the funds support Bermuda-based purposes.

The utilities infrastructure tax credit applies to entities that are regulated utilities with respect to electricity generation and distribution, digital communications and fuel distribution. The credit is designed to support capital-intensive infrastructure development in Bermuda.

The CIT Act includes a tax loss carry-forward deduction mechanism as part of calculating net taxable income and net taxable loss. As mentioned in 2.1 Taxable Profits, the opening tax loss carry-forward election allows entities to carry forward losses incurred over a prior five-year period, as an offset to future profits.

There is an 80% limit on the use of tax loss carry-forward deductions. This limit may not apply where an insurance company incurs a shock loss (an event with a probability of 0.5% or less). Only losses arising under the CIT Act after the introduction of the CIT Act, including any permitted transitional losses, may be carried forward to offset future taxable income.

There are no limits imposed on interest deductions, as there will be no corporate income tax for most local companies in Bermuda. The 15% tax rate imposed by the CIT Act applies only to Bermuda businesses that are part of an MNE group with annual revenues of EUR750 million or more. Therefore, most local companies will not be subject to the CIT Act.

The CIT Act is fundamentally group-based, as corporate income tax is imposed on a BCE Group and is calculated by reference to the group’s net taxable income for the fiscal year, with a designated BCE being responsible for filing and administration.

Bermuda does not impose a capital gains tax on corporations.

Exempted undertakings (including exempted companies, LLCs and partnerships) are entitled to apply for and will usually be issued with a statutory assurance under the Exempted Undertakings Tax Protection Act 1966 that, if Bermuda was to enact legislation imposing a tax computed on profits or income, capital assets, gains or appreciation or estate duty or inheritance tax, such tax will not apply to the exempted undertaking or its operations until 31 March 2035. Following the enactment of the CIT Act, this assurance does not apply to any BCEs that are liable for corporate income tax as part of an In-Scope MNE Group but will otherwise apply.

Due to the tax assurance issued to exempted undertakings, such undertakings are not generally subject to tax in Bermuda, other than payroll taxes.

Exempted undertakings are not generally subject to stamp duty because stamp duty applies to specific Bermuda‑connected instruments, and exempted undertakings are designed to conduct international business without creating Bermuda taxable transactions.

For local companies, LLCs and limited partnerships, other taxes would include payroll taxes, stamp duties and land tax on commercial real estate transactions.

There are no other notable taxes.

Most closely held local operating businesses in Bermuda typically use corporate forms or owner-managed structures (including partnerships), depending on the sector and ownership requirements. The CIT Act is targeted at In-Scope MNE Groups and is not intended to apply to typical local small or medium businesses due to the revenue and international presence requirements.

Bermuda does not have a general personal income tax, and the CIT Act is limited to In-Scope MNE Groups. There is therefore little risk of individual professionals being inadvertently charged at corporate rates. Individuals and owner-managed businesses are generally taxed through payroll tax (on remuneration) and other indirect taxes or fees, rather than through a broad income tax system.

There are no rules that prevent closely held corporations from accumulating earnings for investment purposes.

Bermuda does not impose personal income tax on dividends or capital gains for individuals. Remuneration paid by a company to an individual, as an employee, is subject to Bermuda payroll tax.

Bermuda does not generally impose personal income tax on dividends or capital gains realised by individuals from publicly traded shares. Bermuda payroll tax applies to remuneration for services in Bermuda, rather than to investment returns from shareholdings.

In Bermuda, there are no withholding taxes, and the CIT Act is the first piece of legislation providing for any form of corporate income tax payable by entities domiciled and/or registered in Bermuda. In the absence of income tax treaties, no withholding taxes apply to interest, dividends and/or royalties.

Bermuda itself is a primary tax treaty country used by foreign investors to make investments in local corporate shares or debt. As Bermuda charges no corporate taxes other than those recently imposed by the enactment of the CIT Act and payroll tax, for which employers are partly liable, many investors use Bermuda as the base/hub for holding companies both within Bermuda and outside of Bermuda.

In addition to this, Bermuda holds several bilateral tax information exchange agreements with various nations globally, including the United States, the United Kingdom, Canada, Denmark, France and Japan.

However, Bermuda is an open market and encourages investment from all countries with no specific preference, except for any entity or persons who have been identified as being subject to international sanctions.

The tax authority in Bermuda in relation to corporate tax is the Bermuda Corporate Income Tax Agency (CITA). Whether the CITA challenges the use of treaty countries by non-treaty residents remains untested as the CIT Act has only been in force for one year as of January 2026, and MNE groups that are within scope and subject to the CIT Act are yet to make their tax filings for the 2025 financial year.

However, Bermuda has always been aware of its position in the global market as a jurisdiction in which entities incorporate owing to certain tax benefits. To combat this, Bermuda enacted the Economic Substance Regime in 2017, which introduced thresholds an entity carrying out a relevant activity (banking, insurance, fund management, financing and leasing, holding entity) would need to satisfy in order to register and maintain registration in Bermuda. By ensuring compliance with the Economic Substance regime, Bermuda as a jurisdiction ensures that the use of Bermuda as a place of registration and incorporation is not solely for tax benefit purposes and that there is a substantial level of economic activity being carried out by the entity in Bermuda.

The biggest transfer pricing issue for inbound investors operating through a local corporation is the adjustment to corporate income tax in Bermuda. The CIT Act introduced the arm’s length principle, which requires transactions between constituents within the same In-Scope MNE Group to be recorded by reference to the conditions that would have been obtained between independent enterprises in comparable transactions and under comparable circumstances.

Prior to the enactment of the CIT Act, there were no challenges by authorities in Bermuda to the use of related-party, limited risk distribution arrangements for the sale of goods or provision of services locally. However, since the enactment of the CIT Act, the arm’s length principle provides that any transaction between a BCE and another constituent entity of the same group must be recorded in the same amount in the financial accounts of the BCE and the other constituent entity. This has been adopted to ensure profits reported in Bermuda reflect real economic activity, and to ensure consistency in financial reporting across BCE Group entities.

The local transfer pricing rules and enforcement in Bermuda are generally aligned with the OECD standards, although they differ in relation to the recognition of pre-regime losses and the method of calculation.

The CIT Act allows in-scope entities to calculate the opening tax loss carry-forward based on any losses incurred over a prior five-year period to offset future profits. The GloBE Rules do not have specific provisions directly facilitating carrying forward losses but rather rely on the deferred tax provisions in the accounts.

It is anticipated that the CITA will be more aggressive with respect to transfer pricing following the enactment of the CIT Act, as prior to this there was no local tax authority nor was there any corporate income tax.

As a result of its traditional status as a zero-corporate income tax jurisdiction, Bermuda does not have much – if any – experience with Mutual Agreement Procedures (MAPs). The frequency with which MAPs and transfer pricing disputes are resolved remains untested, given the corporate income tax regime has only recently become operative.

There is no explicit Bermuda statutory mechanism for transfer pricing compensating adjustments when a transfer pricing claim is settled. Instead, the CIT Act requires that related-party transactions are conducted on an arm’s length basis for corporate income tax purposes.

There is no standalone separate tax regime or different statutory rate specifically for local branches of non-local corporations compared to local subsidiaries of non-local corporations. Whether or not local branches of non-Bermuda corporations are subject to corporate income tax will depend on whether they meet the definition of a Bermuda Permanent Establishment.

Bermuda does not, directly or indirectly, impose tax on capital gains of non-residents on share disposals.

Under the CIT Act, a change of control does not itself trigger corporate income tax. Corporate income tax only applies to the taxable income of a BCE; it is not triggered by share disposals, whether direct or indirect.

However, stamp duty may be triggered in certain change of control circumstances, including:

• the direct transfer of shares in a Bermuda local company and certain instruments relating to Bermuda assets; and
• the transfer of shares in a company that directly or indirectly holds Bermuda real estate which results in a change of control or economic ownership.

Under the CIT Act, taxable income is determined based on the financial accounting results, adjusted as required by the arm’s length principle.

A deduction for payments is allowed to the extent that it is at arm’s length, relates to services actually rendered and provides a demonstrable benefit to the affiliate. This is consistent with the OECD’s transfer pricing rules.

Related-party borrowing by a foreign-owned affiliate is permitted, but deductions for interest and related financing costs are tightly constrained. Constraints include arm’s length pricing, and substance and commerciality restrictions.

Under the CIT Act, foreign-sourced profits are not automatically exempt simply because they are foreign. The tax is generally imposed on the net taxable income of Bermuda-based entities, which will include profits, whether domestic or foreign, unless specific exclusions apply.

Foreign tax credits are available to reduce the Bermuda tax liability for taxes paid to other jurisdictions, subject to limitations. Some specific types of income or industries may benefit from exclusions, but there is no blanket exemption for all foreign-sourced profits under the CIT Act.

There is no general rule in the CIT Act disallowing local deductible expenses merely because they are apportionable to foreign income. Similarly, local expenses are not automatically non-deductible simply because the associated income arises from foreign sources or qualifies for a statutory exclusion. They remain a part of the overall income and expense calculation, and only specific statutory adjustments can deny deductibility.

Bermuda does not have controlled foreign corporation rules that would apply to tax a Bermuda parent entity on the income of its foreign subsidiaries.

Dividends received from foreign subsidiaries would not generally be subject to tax in Bermuda.

Bermuda does not impose the automatic attribution of foreign subsidiary profits. Intangibles developed by a Bermuda company and used by a foreign subsidiary may give rise to Bermuda corporate income tax liability to the extent that value is attributed to the BCE by application of the arm’s length principle.

Bermuda does not adopt CFC-type rules that tax a local corporation on the income of its non-local subsidiaries as it is earned. However, the position is different where a Bermuda company operates overseas through a branch (permanent establishment) rather than a subsidiary. In this instance, the profits of non-local branches are treated as the profits of the Bermuda corporation and may be taxed on the current attribution basis.

Bermuda does not impose economic substance rules on non-local or foreign affiliates, although local branches or agencies of a non-local affiliate (which may include an overseas company or partnership registered in Bermuda) may be subject to Bermuda’s economic substance laws to the extent that they are conducting a relevant activity under those laws and would thereby be required to have a substantial economic presence in Bermuda.

The CIT Act taxes Bermuda-based entities on a book-income basis and relies on transfer pricing or arm’s length rules for related-party dealings.

Bermuda does not tax gains realised by a local corporation on the sale of shares in non-local affiliates.

Generally, Bermuda does not have an anti-avoidance system, but the CIT Act has introduced specific anti-avoidance measures, substance requirements and strict enforcement provisions. This relies on targeted integrity measures, including:

• an arm’s length transfer pricing rule for covered cross-border related-party transactions within an In-Scope MNE Group; and
• administrative enforcement powers administered by the CITA.

Bermuda’s economic substance regime also remains relevant as a separate compliance framework for entities conducting relevant activities in and from within Bermuda.

The Bermuda Monetary Authority (BMA) is responsible for the supervision, regulation and inspection of Bermuda’s regulated entities, and regularly audits such companies through a combination of off-site analysis of financial returns, regular prudential meetings with management and on-site compliance visits. The various regulatory acts provide the BMA with substantive licensing, supervision and intervention powers.

A key component of the BMA’s supervisory regime is the requirement for regulated companies to provide the BMA with annual statements audited by an approved auditor.

Bermuda does not operate a fixed routine audit cycle for non-regulated companies. Bermuda companies are required to prepare audited financial statements on an annual basis but this requirement may be waived for a specific period or indefinitely if the directors and shareholders agree.

Bermuda has implemented several BEPS-aligned measures, including economic substance requirements, Country-by-Country Reporting (CbCR), participation in the OECD Inclusive Framework, and a 15% corporate income tax for In-Scope MNE Groups as its Pillar Two response.

• Economic Substance Requirements mandate entities conducting relevant activities, such as banking, insurance, fund management, shipping and holding companies, to demonstrate that they have adequate economic presence in Bermuda.
• CbCR requires large MNE groups with revenue over EUR750 million to submit reports to tax authorities with detailed financial information, including global profits and taxes, to ensure transparency.
• The OECD Inclusive Framework includes initiatives such as the Pillar Two global minimum tax of 15% and implementing substance requirements for key activities to meet international standards.
• The CIT Act introduced a 15% corporate income tax on BCEs that are part of an In-Scope MNE Group.
• The Tax Credits Act 2025 introduced new corporate tax credits to encourage investment in Bermuda, linking tax relief to local jobs, spending and charitable donations.

The Bermuda government viewed BEPS as an opportunity to implement reforms to its tax regime, retain tax revenue and boost its attractiveness for international business. The goal is to adapt to global standards and boost economic growth.

Government policy supports the OECD Two-Pillar solution while preserving Bermuda’s competitiveness as an offshore financial centre. Bermuda has implemented Pillar Two domestically via the CIT Act, with effect generally from 1 January 2025. Pillar One remains subject to international agreement and Bermuda is involved and supportive of its ongoing work.

International tax has a high public profile in Bermuda. The public guidance on the Common Reporting Standard focuses on strengthening tax transparency and compliance by sharing information with tax authorities. CbCR mandates that large MNE groups with revenue exceeding EUR750 million submit reports to tax authorities with detailed financial information, including profits and taxes globally.

Bermuda seeks to balance global minimum tax compliance with competitiveness by limiting corporate income tax to 15% for large MNE groups with revenue in excess of EUR750 million while maintaining a tax-neutral environment for other businesses. Some tax burdens are offset through payroll tax cuts and tax incentives such as the Tax Credits Act 2025.

Bermuda’s historic tax-neutral system faced vulnerability under Pillar Two. The introduction of a 15% corporate income tax mitigates exposure to foreign top-up taxes.

The CIT Act addresses the tax treatment of hybrid entities to ensure compliance with corporate income tax rules. This is aligned more closely with OECD international standards, particularly relating to how income and taxes are allocated in cross-border scenarios.

Interest deductibility for In-Scope MNE Groups is addressed through the CIT Act and arm’s length transfer pricing requirements.

Bermuda does not operate a traditional CFC regime.

Bermuda has a limited network of double taxation agreements, with a greater emphasis on tax information exchange agreements. Treaty anti-abuse rules apply only where a relevant treaty exists.

The transfer pricing changes introduced by BEPS shifted Bermuda from a tax-neutral jurisdiction to one that complies with global minimum tax standards through the introduction of a 15% corporate income tax on MNE groups.

The CIT Act requires arm’s length pricing for covered cross-border related-party transactions. IP-related profits are taxed within the CIT framework where attributable to relevant entities.

Bermuda implemented CbCR under its international co-operation framework, supported by statutory regulations, guidance notes and an electronic reporting portal. This requires large MNE groups with revenue over EUR750 million to submit reports to tax authorities with detailed financial information, including profits and taxes globally, to ensure transparency.

There are no specific digital services tax or rules imposing tax solely based on remote digital activity. The main change in Bermuda tax legislation relates to the CIT Act.

Bermuda supports a consensus-based OECD solution and has not introduced a standalone digital services tax.

Bermuda does not impose a specific offshore IP tax or withholding tax. IP income is addressed through the CIT Act for In-Scope MNE Groups.