Bermuda is a favorite country for individuals seeking to start offshore companies and/or reduce their tax liability. Due to its relatively low tax rates and exemption of corporate tax, Bermuda continues to receive investment funds from US taxpayers around the world.
The following is a summary of Bermuda tax law.
Corporate Tax Law
Corporate Tax Law: There is no corporate tax rate in Bermuda
Residence: A Corporation will be considered a resident of Bermuda if it is incorporated in Bermuda.
Passive Income: There is no withholding tax on dividends, interest, or royalties.
Payroll Tax: There is a 14.5% tax on the total value of cash and benefits paid or otherwise given for services rendered in Bermuda by an employee, with the employer authorized to withhold of the 5.5% of the employees pay.
Real Property Tax: There are certain real estate property taxes involving the rental value of land in Bermuda.
Social Security: Employers must contribute a small amount to Bermuda social insurance by withholding payroll deductions weekly from employees.
Anti-Avoidance: There are no anti-avoidance rules per se in Bermuda such as transfer pricing, thin capitalization, or CFC rules
Personal Tax Law
Tax: whether a person is a resident or nonresident they are not subject to income withholding or capital gains tax in Bermuda.
Residence: in order to become a resident of Bermuda their various different requirements depending on whether the person is working or retiring, wherein the person will have to show a work permit was issued or show they will not be a burden to the country.
VAT: There is No Value Added Tax