The Island’s tax system, in place for more than a century, was made to suit the needs of our jurisdiction—and built on taxing imports. This consumption-based, duty-tax system provides revenue for Bermuda’s Government to support the Island’s infrastructure. Unlike larger countries, Bermuda does not have the burden of large-scale infrastructure, healthcare and social insurance systems that require support via income or corporate taxes.
There are taxes in Bermuda.
The Island does not levy income tax or corporate taxes, but instead imposes payroll tax, import duties and custom duties on goods and services under its consumption-based approach. Custom and payroll duties form a major component of the Island’s tax revenues.
Bermuda’s tax revenue percentage is virtually parallel with that of the US.
Bermuda Government revenues total an estimated 16% of GDP. By comparison, US federal tax revenues total 19% of GDP.
Bermuda does not target certain companies for tax purposes.
Bermuda does not differentiate between local companies and exempted (foreign, Bermuda-domiciled) companies in the way they are taxed. All companies are treated the same.
Bermuda is recognised as a cooperative partner by the international community, including the US.
Bermuda has more than 40 Tax Information Exchange Agreements (TIEAs) in place with trading partners around the world, and the Island is cited as a cooperative partner by the US Departments of Justice, State and the Treasury. Bermuda is recognised as a leader on tax-transparency issues by the Organisation for Economic Co-operation and Development (OECD), the Financial Action Task Force (FATF) and G20 nations. The Island is also compliant with US and UK anti-money laundering (AML) and anti-terrorist financing (ATF) requirements, and does not have bank-secrecy laws.
The Bermuda market fulfils a critical role in the global economy.
Bermuda’s economic model supports close to a half-million jobs globally, creating and supporting jobs not only on the Island itself, but also in its onshore trading partners—including an estimated 350,000 jobs in the US and more than 100,000 in the UK. According to Standard & Poor’s, 16 of the top 40 reinsurance companies in the world are based on the Island. Bermuda is the single most important property and catastrophe market, and the largest supplier of catastrophe reinsurance to US insurers; over the past 12 years, Bermuda insurers and reinsurers have contributed $35 in catastrophe claims payments to US clients.
Bermuda’s regulatory system is respected worldwide.
A UK Overseas Territory, Bermuda is considered a highly reputable jurisdiction with a globally-recognised regulatory system, British Common Law, and recourse to the Judicial Committee of the Privy Council (JCPC).