BERMUDA Law and Practice Contributed by: Natalie Neto, Rachel Nightingale and Tyson Oladokun, Walkers
9.8 Controlled Foreign Corporation Reform Bermuda does not operate a traditional CFC regime. 9.9 Anti-Avoidance Rules Bermuda has a limited network of double taxation agreements, with a greater emphasis on tax informa - tion exchange agreements. Treaty anti-abuse rules apply only where a relevant treaty exists. 9.10 Transfer Pricing and IP Taxation 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. 9.11 Country-by-Country Reporting and Transparency Provisions Bermuda implemented CbCR under its international co-operation framework, supported by statutory regu - lations, guidance notes and an electronic reporting portal. This requires large MNE groups with revenue over EUR750 million to submit reports to tax authori - ties with detailed financial information, including prof - its and taxes globally, to ensure transparency. 9.12 Digital Economy Businesses 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. 9.13 Approach to Digital Services Taxation Bermuda supports a consensus-based OECD solu - tion and has not introduced a standalone digital ser - vices tax. 9.14 Offshore IP Provisions 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.
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 competitive - ness 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 Ber - muda is involved and supportive of its ongoing work. 9.3 International Tax International tax has a high public profile in Bermuda. The public guidance on the Common Reporting Stand - ard focuses on strengthening tax transparency and compliance by sharing information with tax authori - ties. CbCR mandates that large MNE groups with rev - enue exceeding EUR750 million submit reports to tax authorities with detailed financial information, includ - ing profits and taxes globally. 9.4 Competitive Tax Policy Objectives Bermuda seeks to balance global minimum tax com - pliance with competitiveness by limiting corporate income tax to 15% for large MNE groups with rev - enue 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. 9.5 The Competitive Tax System 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. 9.6 Hybrid Instruments and BEPS Implementation 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 inter - national standards, particularly relating to how income and taxes are allocated in cross-border scenarios. 9.7 Interest Deductibility and Territorial Tax Regime Interest deductibility for In-Scope MNE Groups is addressed through the CIT Act and arm’s length trans - fer pricing requirements.
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