Bermuda has no general corporate income tax and no personal income tax, though Bermuda introduced a new 15% Corporate Income Tax (CIT) for large multinational groups (Pillar Two in-scope entities), effective for fiscal years beginning on or after 1 January 2025 - a genuinely major, current structural change already covered in more detail elsewhere on this page. Bermuda has no CFC regime.
For groups now subject to Bermuda's new CIT, the tax year follows the group's own fiscal year; for all other purposes, Bermuda has no general income tax year given the absence of a broader income tax.
Bermuda's headline corporate income tax (CIT) rate is 15% (if subject to Bermuda CIT) or 0%.
0% - Bermuda has no personal income tax.
0% - Bermuda has no VAT, GST, or general sales tax.
Bermuda has traditionally had no defined concept of residence for tax purposes, since it imposes no general income, profits, or capital gains tax on individuals or most companies. A company is generally considered resident in the traditional sense if it has its registered office and its management and control is exercised in Bermuda. This changed for large multinational groups with the Corporate Income Tax (CIT) Act: for entities within scope of the 15% CIT (see below), the Act formally introduces a "tax residency" concept - a Bermuda entity is deemed tax resident in Bermuda unless, under another jurisdiction's laws, it is tax resident there based on the location of the entity's management and control. Individuals have no personal income tax exposure regardless of residency status, and there is no physical-presence day-count test for tax purposes; Bermuda's "status" (citizenship-equivalent) and Permanent Resident Certificate systems govern immigration rather than taxation.
For groups in scope of Bermuda's new CIT, a non-Bermuda entity has a Bermuda permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Bermuda on the entity's behalf, following the OECD Model Treaty definition; for all other entities, the concept has limited application given the absence of a general corporate income tax.
Bermuda does not adopt CFC-type rules taxing a Bermuda entity on the current income of its non-local subsidiaries as earned. Note the position differs where a Bermuda company operates overseas through a branch/permanent establishment rather than a subsidiary, which is taxed differently under ordinary source rules rather than CFC attribution. Separately, the new CIT Act contains specific provisions addressing Bermuda entities that are themselves treated as CFCs under a foreign parent's home-country rules (notably a "CFC Income Exclusion Election" relevant to US-owned Bermuda Constituent Entities subject to US Subpart F/GILTI) - this is the CIT Act managing double-counting with foreign CFC regimes applied to Bermuda entities, not Bermuda operating its own CFC regime.
No traditional statutory thin capitalization ratio applies to ordinary Bermuda companies, consistent with the absence of general corporate income tax outside the CIT regime. For entities within scope of the new 15% CIT (multinational groups with consolidated annual revenue of at least EUR 750 million in at least two of the four preceding fiscal years), interest deductibility is instead addressed through arm's-length transfer pricing requirements built into the CIT Act, functioning similarly to a thin-cap-style limitation for large in-scope groups specifically, rather than a general debt-to-equity ratio applicable economy-wide.
Bermuda does not use an elective check-the-box classification system. Bermuda's new CIT for large multinational groups incorporates Pillar Two-aligned mechanics, which include anti-arbitrage features relevant to hybrid structures within in-scope groups specifically.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts - consistent with the absence of a general income tax return outside the new CIT regime for large in-scope multinational groups.
Bermuda's new CIT includes its own specific relief mechanisms for qualifying dividends and equity interests within in-scope multinational groups, already described in more detail elsewhere on this page.
Bermuda's new CIT includes a foreign tax credit mechanism aligned with Pillar Two principles for in-scope groups; outside the CIT's scope, the concept has limited application given the absence of a general corporate income tax.
Bermuda has not entered into comprehensive income tax treaties historically, because it did not impose income or capital gains taxes for which such treaties would provide relief - confirmed directly by a Bloomberg Tax/Appleby country guide. Instead, Bermuda relies on an extensive network of bilateral Tax Information Exchange Agreements (TIEAs) - with the United States and over 40 other jurisdictions per TaxAtlas - plus participation in the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters covering 100+ countries. With the 2025 introduction of the 15% CIT for large MNE groups, Bermuda's practitioner commentary (Chambers and Partners) notes the jurisdiction may develop an actual bilateral tax treaty network over time, and flags that how the Bermuda Corporate Income Tax Agency (CITA) will treat use of treaty-country structures by non-treaty residents remains untested, since the CIT Act had been in force only about a year as of early 2026 with no filings yet completed for the first (2025) tax year. This is a genuinely evolving area - confirm current status before relying on any treaty-based planning assumption for Bermuda.