Government launches third CIT consultation
The Government has launched a third consultation on corporate income tax, which focuses on the administration of the provisions of the Act by the new Corporate Income Tax Agency.
In so doing, it has apparently cleared up some concern regarding the availability of mechanisms for disputes and appeals to agency decisions.
A statement from a finance ministry spokeswoman said: “Many respondents in the first consultation were concerned about the ability to dispute an action from the agency. Provision is made for an appeal to be made notwithstanding the appeals procedures set out in the other parts of the CIT Laws.”
The just-released consultation paper is a follow-on to the one previously issued on January 31.
The spokeswoman said the Government welcomes feedback from all stakeholders on these proposals, including comments and suggestions for improvements.
The paper addresses the broader administrative provisions relating to the timing of tax payments, returns and other matters, a statement pointed out.
The consultation includes an illustrative draft Bill for reference.
The Corporate Income Tax Act 2023 was enacted in December 2023 and provides that Bermuda constituent entity groups, comprised of one or more Bermuda constituent entities of in-scope multinational enterprises, are subject to corporate income tax for fiscal years that begin on or after January 1.
In addition to the various technical provisions relevant to the determination of the CIT liability of a BCE group, the principal Act introduced the concept of a Bermuda CIT return to be filed by a filing BCE on behalf of a BCE group.
The CIT became effective in January, providing MNEs the necessary time to make relevant adjustments before transitioning into the new corporate income tax regime in Bermuda.
The proposed Corporate Income Tax Administrative Regulations 2025 include new terms regarding the introduction of necessary administrative procedures and the ability for the Corporate Income Tax Agency to effectively administer the CIT.
That includes holding the necessary data for proper and fair administration of the CIT. The information also refers to the payment of taxes and returns.
The consultation document refers to requirements for two instalment payments.
It states: “The first instalment payment is the lesser of 50 per cent of the tax liability for the year and a safe harbour calculation as prescribed in the regulations. The first instalment payment is required to be paid by the fifteenth day of the eighth month of the fiscal year.
“The second instalment payment is the lesser of 90 per cent of the tax liability and safe harbour calculation, less the first instalment payment. The second instalment payment is required to be paid by the fifteenth day of the twelfth month of the fiscal year.
“The actual tax due for a fiscal year should be fully paid by the due date of the tax return, irrespective of whether a tax return is filed.”
• The third public consultation period will run from February 17 to March 10. Submissions received after this date may not be considered. Consultation paper responses and comments should be submitted by e-mail to finance@gov.bm. Respondents should include “Corporate Income Tax Administration” in the subject box
• For more on the Third Public Consultation, Corporate Income Tax Administration, see Related Media
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