Bermuda Tax & Business Guide - Deloitte

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Basic facts
Population 64,935 Inflation 3.2% (2005)*
Main languages English (official), Portuguese GDP per head US$59,864
Currency Bermuda dollar (BMD) GDP growth 2.6% (2005)*
GDP sources 1% agriculture, 10% industry, 89% services
*Economist Intelligence Unit.
Political environment

Bermuda is a representative democracy. It is the largest and oldest remaining Overseas Territory of the UK.

The present government is formed by the Progressive Labour Party (PLP), which won power for the first time in 1998. Its leader, Alex Scott, is the premier. The next general election is due in 2008.
Foreign trade and investment
Exports US$20.0m (2005)* Imports US$994.0m (2005)*
*Economist Intelligence Unit.

Major exports: Pharmaceuticals (re-exports).

Main export markets: The EU.

International business and financial intermediation, together with real estate and property services, account for around 40% of national output and generate the bulk of the islandÌs foreign-exchange earnings.

Tourism is an important employer.
Business and financing
Business forms Trusts, exempt company

Bermuda has a growing reputation for being an ideal location for the establishment of trusts.

Exempt companies are most frequently set up by international businesses, as they may be entirely owned by non-Bermudans, although they may have up to 20% Bermudan ownership. Exempt companies may conduct business anywhere in the world, but generally are not permitted to conduct transactions in Bermuda.

The island is a major world centre for insurance, especially reinsurance.
Labour environment
Unemployment rate 2.6% (2004)*
*Economist Intelligence Unit.

Legislation was recently enacted making the payment of overtime mandatory.
Taxation
Corporate tax
Main rate No corporate tax on profits

No tax is charged on corporate profits.
Individual tax
No individual income tax

There is no individual income tax. Employers and the self-employed are liable to the payroll tax at 13.5% of salary, a portion of which (4.75%) may be withheld from salaries. These taxes are applied against the first US$235,000 in salary Ûsalary paid in excess of US$235,000 is not subject to the payroll tax. Lower rates apply when the employerÌs payroll is small.
Capital gains
No taxation of capital gains

Capital gains are not subject to tax.
Indirect tax
No VAT or sales tax

There is no value-added tax (VAT) or sales tax in Bermuda.
Tax administration and compliance
Tax year Corporations: April 1st; Government: April 1st

Generally, payroll tax returns must be submitted quarterly, and payroll taxes are generally remitted on a bi-monthly basis.
Additional tax information
Withholding taxes There are no withholding taxes.
Tax treaties A treaty with the US addresses mutual assistance in tax matters.
Dividends There is no taxation of dividends.
Revenue protection There are no transfer-pricing or anti-tax-haven (CFC) rules.
Groups There is no provision for group taxation.
Incentives There are no specific tax incentives.
Other taxes Betting duty, Contract exchange tax, Corporate services tax, Departure tax, Excise duties, Foreign-currency purchase tax, Hotel occupancy tax, Import and export duties, Land tax, Municipal rates, Passenger cabin tax, Payroll tax, Time-sharing occupancy tax, Stamp duty, Time-sharing services tax.