New tax legislation is headed to the Bahamas parliament this year with regard to the new global corporate income tax, as the country remains engrossed in a public consultation on the issue that will continue until September 16.

The Domestic Minimum Top-up Tax Bill 2024 is in draft form, promising the possibility of adding more than $140 million in new annual revenues to the country’s treasury.

The Society of Trust and Estate Practitioners, in its Industry News publication, said the Bill is to be submitted for parliamentary approval on October 9.

The projected new income compares to the much larger anticipated revenue in Bermuda from changes to corporate income tax for multinationals here.

Bermuda’s House of Assembly passed the Bermuda Corporate Income Tax Act 2023 last December. It is set to come into full force on January 1.

Bermudian authorities revealed in February the expected CIT windfall as a result of the new tax regime, first proposed by European nations through the Organisation for Economic Co-operation and Development.

In the Budget Statement, David Burt, the Premier and finance minister, said: “The estimates of CIT revenue that have come to the Ministry of Finance and that have been shared with the Tax Reform Commission are that the Government should expect to receive, on average, at least $750 million in additional revenue each year and that initial payments on account from the CIT could commence by July 2025.”

But there still have not been any hard figures on what it will cost to collect that new tax, as Bermudian authorities have already indicated the need to establish a completely new tax authority separate from the existing facility that deals with standing taxation.

Meanwhile, back in the Bahamas and also in February, their government announced it too would introduce the corporate income tax, with Philip Edward Davis KC, the Prime Minister and Minister of Finance, calling the move “a significant measure under the OECD’s Pillar Two tax framework aimed at ensuring multinational enterprises operating within the Bahamas, pay their fair share of taxes.

“This initiative specifically targets MNEs with annual turnovers exceeding €750 million, aligning with our international obligations and efforts to combat tax base erosion and profit shifting.”

He said implementation of the tax “represents a landmark step towards enhancing fiscal fairness and strength within our nation. By imposing a 15 per cent corporate income tax on these large multinational entities, The Bahamas is poised to unlock a new and substantial revenue stream, initially estimated to exceed $140 million, annually.

“This move not only ensures that very large companies contribute appropriately to the national economy but also creates fiscal space that will be utilised to provide significant relief to Bahamian taxpayers.”

Mr Davis said announcement of the tax came after extensive consultation and preparation, including the release of a consultative Green Paper on Corporate Income Tax Strategies for The Bahamas and numerous discussions with stakeholders.

He added: “The Davis Administration believe that addressing only Pillar Two multinational enterprises is the proper approach. Any consideration of a wider business income tax would only happen if it is a more equitable approach for Bahamian businesses, and would only be done after proper consultation, with considerable lead time in order for Bahamian businesses to properly prepare.”

He said introduction of the tax “marks a pivotal moment in the Bahamas’ fiscal policy landscape.

“By targeting only the largest multinational enterprises, we aim to foster an environment of fairness and equity in taxation, ensuring that these entities contribute meaningfully to the jurisdictions in which they operate.

“This policy move is a clear indication of our commitment to fiscal responsibility, international compliance, and the wellbeing of our citizens and residents.”