In response to the Pillar Two global minimum tax rules (the GloBE Rules) set out by the Organisation for Economic Co-operation and Development (OECD), and following three rounds of public consultation, in December 2023 the Government of Bermuda enacted legislation (CIT Act1) to introduce a corporate income tax (CIT Regime) in the jurisdiction. The applicable statutory rate of tax under the CIT Regime is 15% effective for fiscal years beginning on or after 1 January 2025.

The CIT Regime applies to Bermuda tax resident entities and Bermuda permanent establishments that are part of Multinational Enterprise Groups (MNEs) with consolidated annual revenue of at least €750M in at least two of the four preceding fiscal years. For these purposes an “entity” is construed broadly as any legal person whether or not it has separate legal personality, together with any arrangement that prepares separate financial accounts. The CIT Act also introduces into Bermuda law the concept of “tax residency”. A Bermuda entity will be deemed to be tax resident in Bermuda unless, under the laws of another jurisdiction, it is tax resident in that other jurisdiction based on the location of the entity’s management and control.

A key objective of the CIT Act is to impose tax liability on Bermuda entities no greater than that which would otherwise be payable to other jurisdictions under the GloBE Rules, while seeking to avoid double taxation. The new CIT Regime therefore includes provisions for crediting an in scope Bermuda entity’s foreign tax liability as an offset against its tax liability under the CIT Act. The CIT Act also largely mirrors the exclusions under the GloBE Rules for certain forms of income (such as dividends and certain gains on the disposal of equity interests), certain entities (such as investment funds and not-for-profits) and certain industries (such as international shipping businesses).

Entities which are subject to the CIT Regime are able immediately and in advance of filing a corporate income tax return to complete a form which allows them to make certain elections for the 2024 fiscal period, prior to the charging provisions of the CIT Act coming into force on 1 January 20252. One possible election under the CIT Regime which will be of particular interest to groups with losses in the past five years is that the CIT Regime permits the use of an “opening tax loss carry forward” which essentially allows losses for the last five years to be carried forward and applied as an offset to future profits. The CIT Regime also incorporates the GloBE Rules’ five year exemption from taxation for groups with a “limited international presence” (in essence, groups with a presence in six or fewer jurisdictions) starting with the year in which the group would otherwise be in scope based on the revenue threshold.

The Bermuda government has issued a “Frequently Asked Questions” publication that provides guidance on the application of the CIT Regime. This document has been updated since it was first published in December 2023 and includes topics such as elections, the aforementioned opening tax loss carry forward deduction, tax credits, changes in accounting principles, adjustments due to IFRS17 and LDTI, transfer pricing adjustments, and the economic transition adjustment3.

Due to the €750M annual revenue threshold and the aforementioned exclusions, the majority of Bermuda entities will not be affected by the new CIT Regime. Furthermore, to the extent entities are tax-resident in jurisdictions outside Bermuda, they are not in scope and are therefore not subject to tax under the CIT Regime.

Bermuda exempted entities (i.e. entities that carry on business outside of Bermuda) are typically issued with a tax assurance from the Bermuda Minister of Finance that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, such tax shall not, until March 31, 2035, be applicable to the entity. However, following the introduction of the CIT Act, any liability for tax of a Bermuda constituent entity in scope of the CIT Regime applies notwithstanding the tax assurance.

Bermuda based businesses that belong to in-scope MNEs should assess the impact of the CIT Regime and consider the appropriateness of the elections contained within the CIT Act. If you have any questions regarding the CIT Regime, please reach out to out to your regular Conyers contact or any of the experienced lawyers in our Bermuda Corporate Practice.


1Bermuda Government – CIT

2Corporate Income Tax Election Form

3CIT FAQs (29 January 2024)


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