Global tax could hit 1,400 Bermudian-registered firms
About a tenth of international businesses in Bermuda will be affected by the global minimum tax, MPs heard.
The tax will apply to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or “who will otherwise be required to pay tax under the GMT to another jurisdiction”.
The OBA’s Scott Pearman asked David Burt, the Premier, how many entities will fall into the potential tax bucket.
Mr Burt replied: “That information is not with me at this time. I know that it has been provided and I do not want to provide the incorrect information.
“When we talk about the total number of companies on Bermuda’s register, there is about 16,000, of those 2,000 local and 14,000 international.
“I will go with a ballpark of around 10 per cent, but I can get the specific information for the honourable member.”
He said that work was ongoing on the issue and that any figure provided now was an estimate.
The Premier also gave an update on the tax reform commission, which will look at the changes to the existing system of domestic taxation to ensure it is in line with the requirements of the GMT, set to be effective in 2025.
It will also examine what other changes to local taxes are needed to ensure Bermuda’s economy remains competitive.
Mr Burt explained: “I am cautiously optimistic of the potential this material change in Bermuda’s approach to taxation may bring as it presents a real opportunity to significantly reduce the cost of living and the cost of doing business by eliminating existing taxes and customs duties.”
Mr Burt announced the full make-up of the Commission which will be chaired by Darren Johnston, who has more than 30 years of experience in the financial services industry.
He was previously the chief executive officer of Price Waterhouse Cooper, Caribbean region, and is the chief operating officer of Orbis Investments, and a director of Orbis Holdings Ltd and other subsidiaries.
The other members are:
• Albert Benchimol, the international business representative, who is the former president and chief executive of Axis Capital and serves as a strategic adviser
• Brian Holdipp, the Progressive Labour Party representative, who is Corporate and Finance Counsel at law firm Mello Jones & Martin
• Douglas DeCouto, the One Bermuda Alliance representative and OBA shadow finance minister
• Chris Furbert, the Bermuda Trade Union Congress representative and president of the Bermuda Industrial Union
• Jonathan Howes representing the Bermuda Chamber of Commerce, who is the chief executive of Bermuda Press (Holdings) Ltd
The Premier said the Commission will have an additional member to be appointed later.
“I am pleased to announce this highly qualified and experienced group of individuals who will take forward this task critical to Bermuda’s continuing success,” added the Premier.
“I have faith that each commissioner will respect the integrity of their deliberations and keep all communications internal until the appropriate time.
“I am further confident that Bermuda and its economy will reap significant benefits from the work undertaken by this commission.
“I certainly look forward to receiving their report and the recommendations which will be contained therein, during this parliamentary session.”
• For the Premier’s full statement, see Related Media
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