The proposed tax would be applicable to Bermuda tax-resident entities and permanent establishments that are part of multinational enterprise groups with an annual revenue of at least EUR750mn ($793mn), according to a note from PwC.
Under the proposal, the tax would be effective from 2025.
PwC said one of the primary policy underpinnings of the tax was alignment with the OECD’s Global Anti-Base Erosion (GLoBE) rules.
The GLoBE rules are a key pillar of the OECD’s plans to ensure large multinational companies pay a minimum level of tax in each of the jurisdictions where they operate.
However, PwC noted that Bermuda had no plans to introduce an income inclusion rule or the undertaxed profits rule.
PwC said multinationals should analyse the potential tax accounting implications of the proposed tax for 2023 financial year reporting.
“The impact of the proposed CIT regime on Bermuda insurance companies’ regulatory capital requirements also should be considered, along with the impact on M&A or other transactions,” PwC said.
The Bermudian government signed up to global efforts to create a new international tax framework for multinational companies in summer 2021, with a global minimum tax of 15%.
