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• 2013/2014 BUDGET



The 2013/2014 Budget Statement which was read by the Hon. E.T. Bob Richards, J.P., M.P., Minister of Finance on Friday, February 22nd, 2013, resulted in the following changes to tax administered under the Office of the Tax Commissioner:
Payroll Tax

New Bermudian Hire Payroll Tax Relief:

The Payroll Tax Amendment Act 2013 (PTAA 2013) stipulates that Employers who hire Bermudian Employees from April 1, 2013 – March 31, 2015 inclusive will pay tax at 5.25% for the first two years of employment on the remuneration earned by those employees.  Only those New Bermudian Hires who had been unemployed for at least three consecutive months immediately prior to the date of employment will be eligible for the reduced rate. 
Employers wishing to take advantage of the reduced rate must complete the New Bermudian Hire – Statement of Eligible Employees Form and submit it to the Office of the Tax Commissioner each time a Bermudian is hired under the terms of the PTAA 2013.
Statutory portion withheld from Employees:
An employer may deduct and retain from any salary or wages paid by him to an employee, a maximum of 5.25% during that tax period.
Rates:
The standard tax rates have not been adjusted for 2013/2014 and will remain as follows:

14.00% applicable to:
Taxpayers with an annual payroll greater than $1,000,000 and Exempt undertakings.

12.75% applicable to:
Taxpayers with an annual payroll greater than $500,000 and up to $1,000,000.

10.75% applicable to:
Taxpayers with an annual payroll between $200,000 and $500,000.

9.75% applicable to:
Taxpayers operating an hotel or restaurant with an annual payroll of $200,000 or greater.

7.75% applicable to:
Remuneration paid to employees in Special Situations, e.g. persons on jury duty or on duty with the Bermuda Regiment or Bermuda Volunteer Reserve; persons employed as farmers; fishermen or horticulturists; hotel employees in December, January or February; and Retail establishments in the quarter January - March.

7.25% applicable to:
Employers and self-employed persons with an annual payroll of less than $200,000. Educational; sporting; or scientific institutions or societies.  Taxi drivers; farmers; fishermen; and horticulturists.  The Bermuda Hospitals Board and the Corporations of Hamilton and St. George's.

5.25% applicable to:
The Government, Parish Councils, Government Boards, the Bermuda College, approved schools, registered charities, religious and cultural organizations, the Bermuda Festival Ltd., and qualified taxpayers in an Economic Empowerment Zone for the first nine periods of establishing a business.
Other:
• Consumer Price Index- Effective April 1, 2013, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 1.9% as a result of the annual increase in the Bermuda Consumer Price Index at December 31, 2012.
• Taxi Drivers - Self-employed persons carrying on business as full-time taxi operators must report remuneration of $7,316.00 with tax of $530.44 per quarter and part-time taxi operators must report remuneration of $3,658.00 and are liable for tax of $265.22 per quarter.
• Retail Establishments– Qualifying Retail Establishments will continue to pay at a rate of 0% from April 1, 2013 – March 31, 2014 (as extended from October 1, 2011).  Qualifying establishments are those whose revenue is generated primarily from the sale of goods to the final consumer.  I.e. 50% or more of the revenue must be generated through sales to the consumer.
• Restaurants – Qualifying restaurants will pay at a rate of 4.75% extended to March 31, 2014.  Taxpayers must complete the Application Form furnished by the Office of the Tax Commissioner and be approved before benefiting from the reduced tax rate. 
• Hotels – Qualifying Hotels will continue to receive tax concessions from April 1, 2013 – 2014 as laid out by the Memorandum of Understanding Agreement between the Bermuda Government and the Bermuda Hotel Association.
Corporate Services Tax
Section 4 of the Corporate Services Tax Act 1995 has been amended to reflect an increase in the Corporate Services Tax Rate from 4 percent to 6 percent effective April 1, 2013.
Land Tax
The following Annual Rental Value bans will be in effect as of July 1, 2013: 
ANNUAL RENTAL VALUE BAND	$	RATE OF TAX %
5	44,001 – 90,000	9.6%
6	90,001 – 120,000	19.20
7	120,001	23.00



• 2012/2013 BUDGET



The 2012/2013 Budget was read by the Hon. Paula A, Cox, J.P., M.P., Premier and Minister of Finance on Friday, February 24th, 2012.

Payroll Tax

There were no changes relating to Payroll Tax for the fiscal year beginning April 1, 2012.  Therefore the rates will be carried forward as follows:

Statutory portion withheld from Employees:
An employer may deduct and retain from any salary or wages paid by him to an employee, a maximum of 5.25% during that tax period.


Rates:

14.00% applicable to:
Taxpayers with an annual payroll greater than $1,000,000 and Exempt undertakings.

12.75% applicable to:
Taxpayers with an annual payroll greater than $500,000 and up to $1,000,000.

10.75% applicable to:
Taxpayers with an annual payroll between $200,000 and $500,000.

9.75% applicable to:
Taxpayers operating an hotel or restaurant with an annual payroll of $200,000 or greater.

7.75% applicable to:
Remuneration paid to employees in Special Situations, e.g. persons on jury duty or on duty with the Bermuda Regiment or Bermuda Volunteer Reserve; persons employed as farmers; fishermen or horticulturists; hotel employees in December, January or February; and Retail establishments in the quarter January - March.

7.25% applicable to:
Employers and self-employed persons with an annual payroll of less than $200,000. Educational; sporting; or scientific institutions or societies.  Taxi drivers; farmers; fishermen; and horticulturists.  The Bermuda Hospitals Board and the Corporations of Hamilton and St. George's.

5.25% applicable to:
The Government, Parish Councils, Government Boards, the Bermuda College, approved schools, registered charities, religious and cultural organizations, the Bermuda Festival Ltd., and qualified taxpayers in an Economic Empowerment Zone for the first nine periods of establishing a business.

Other:

• Consumer Price Index- Effective April 1, 2012, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 2.9% as a result of the annual increase in the Bermuda Consumer Price Index at December 31, 2011.
• Taxi Drivers - Self-employed persons carrying on business as full-time taxi operators must report remuneration of $7,180.00 with tax of $520.55 per quarter and part-time taxi operators must report remuneration of $3,590.00 and are liable for tax of $260.28 per quarter.
• Retail Establishments– Qualifying Retail Establishments will pay at a rate of 0% from April 1, 2012 – March 31, 2013 (as extended from October 1, 2011).  Qualifying establishments are those whose revenue is generated primarily from the sale of goods to the final consumer.  I.e. 50% or more of the revenue must be generated through sales to the consumer.

Stamp Duty

Under the authority of the Stamp Duties Amendment Act 2012, Government will waive the existing 1/10 percent charge on the Assignment or Transfers of Mortgage deeds between local financial institutions.  Effective date: April 1, 2012.

Land Tax

Government has amended the Land Tax Exemption for seniors. As such, in accordance with the Land Tax Amendment Act 2012, seniors having properties with Annual Rental Values (ARV) above $50,000 will be required to pay the assessed tax on the portion above the $50,000 threshold.  Effective date: July 1, 2012.

• 2011/2012 BUDGET
  
  
The 2011/12 Budget as read by the Hon. Paula A, Cox, J.P., M.P., Premier and Minister of Finance Friday, February 18th, 2011 resulted in the following changes to Payroll Tax with effect from April 1, 2011:
Statutory portion withheld from Employees:

An employer may deduct and retain from any salary or wages paid by him to an employee, a maximum of 5.25% during that tax period.
Rates:
14.00% applicable to:
Taxpayers with an annual payroll greater than $1,000,000 and Exempt undertakings.
12.75% applicable to:
Taxpayers with an annual payroll greater than $500,000 and up to $1,000,000.
10.75% applicable to:
Taxpayers with an annual payroll between $200,000 and $500,000.
9.75% applicable to:
Taxpayers operating an hotel or restaurant with an annual payroll of $200,000 or greater.
7.75% applicable to:
Remuneration paid to employees in Special Situations, e.g. persons on jury duty or on duty with the Bermuda Regiment or Bermuda Volunteer Reserve; persons employed as farmers; fishermen or horticulturists; hotel employees in December, January or February; and Retail establishments in the quarter January - March.
7.25% applicable to:
Employers and self-employed persons with an annual payroll of less than $200,000. Educational, sporting, or scientific institutions or societies. Taxi drivers, farmers, fishermen and horticulturists. The Bermuda Hospitals Board and the Corporations of Hamilton and St. George's.
5.25% applicable to:
The Government, Parish Councils, Government Boards, the Bermuda College, approved schools, registered charities, religious and cultural organizations, the Bermuda Festival Ltd., and qualified taxpayers in an Economic Empowerment Zone for the first nine periods of establishing a business.
Other:


• Consumer Price Index - Effective April 1, 2011, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 2.7% as a result of the annual increase in the Bermuda Consumer Price Index at December 31, 2010.
• Taxi Drivers - Self-employed persons carrying on business as full-time taxi operators are liable for tax of $505.69 per quarter and part-time taxi operators are liable for tax of $253.03 per quarter.
• Retail Establishments - Retail Establishments with remuneration greater than $200,000.00 will pay at 7.75% during the January, February and March 2012 tax period.
• Businesses in Arrears – Businesses in arrears with respect to Payroll Tax, who are maintaining installment payment plans may opt to reduce this debt by offering services to Government of like value.



• 2010/2011 BUDGET
  
  

The budget for the fiscal year April 1, 2010 to March 31, 2011 was presented to Parliament on Friday, February 26, 2010 by the Hon. Paula A, Cox, J.P., M.P., Minister of Finance. The Minister announced the following amendments to:

Payroll Tax

An employer may deduct and retain from any salary or wages paid by him to an employee, a maximum of 5.75% during that tax period.

Rates Effective April 1, 2010:

16.00% applicable to:
Taxpayers with an annual payroll greater than $1,000,000 and exempt undertakings.

14.75% applicable to:
Taxpayers with an annual payroll greater than $500,000 and up to $1,000,000.

12.75% applicable to:
Taxpayers with an annual payroll between $200,000 and $500,000.

11.75% applicable to:
Taxpayers operating an hotel or restaurant with an annual payroll of $200,000 or greater.

9.75% applicable to:
Remuneration paid to employees in Special Situations, e.g. persons on jury duty or on duty with the Bermuda Regiment or Bermuda Volunteer Reserve, persons employed as farmers, fishermen or horticulturists and hotel employees in December, January or February.

9.25% applicable to:
Employers and self-employed persons with an annual payroll of less than $200,000. Educational, sporting, or scientific institutions or societies. Taxi drivers, farmers, fishermen and horticulturists. The Bermuda Hospitals Board and the Corporations of Hamilton and St. George's.

5.75% applicable to:
The Government, Parish Councils, Government Boards, the Bermuda College, approved schools, registered charities, religious and cultural organizations, the Bermuda Festival Ltd., and qualified taxpayers in an Economic Empowerment Zone for the first nine periods of establishing a business.

Land Tax


Effective July 1, 2010 the land tax rate will increase from 18.23% to 19.20% for private dwellings in band 6 with an ARV value of $110,001 or over.



Stamp Duty


In accordance with the Government Fees Amendment Regulations 2010, the adjudication fee is $180.00 (per adjudication) from 1st April, 2010.



Foreign Currency Purchase Tax


This tax represents a charge on foreign currency purchased by a resident from a local bank and is payable at the rate of 1%.


Other


• Taxpayers are required to report remuneration up to a maximum of $750,000 per annum per employee.
• Self-employed persons carrying on business as full-time taxi operators are liable for tax of $628.08 per quarter and part-time taxi operators are liable for tax of $314.04 per quarter.
• Retail Establishments with remuneration greater than $200,000.00 will pay at 9.75% during the January, February and March 2011 tax period.
• Taxi Drivers and Taxi Dispatchers will receive a rebate of tax for the period January - March 2010.

Effective April 1, 2010, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 1.0% as a result of the annual increase in the Bermuda Consumer Price Index at December 31, 2009.

• 2009/2010 BUDGET
  
  

The budget for the fiscal year April 1, 2009 to March 31, 2010 was presented to Parliament on Friday, February 20, 2009 by The Hon. Paula A, Cox, J.P., M.P., Minister of Finance. The Minister announced the following amendments to:

Payroll Tax


The Office of the Tax Commissioner will institute a payroll tax amnesty programme that, under specific conditions, will waive all penalties and additional taxes levied on outstanding payroll taxes. The Amnesty period will be run from May 1, 2009 – October 31, 2009.


Stamp Duty


• The Stamp Duties Regulations 2009 came into effect April 1, 2009, giving first time homeowners an exemption from the payment of Stamp Duty on a purchase of a property for a consideration of $750,000.00 or less.
• The Stamp Duties Regulations (No. 2) 2009 came into effect June 26, 2009, extending the exemption for first time homeowners to Bermudians with non-Bermudian spouses, provided that all of the requirements are met.


Other


• Taxpayers are required to report remuneration up to a maximum of $350,000 per annum per person.
• Self-employed persons carrying on business as full-time taxi operators are liable for tax of $487.56 per quarter and part-time taxi operators are liable for tax of $243.60 per quarter.

Effective April 1, 2009, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 4.9% as a result of the annual increase in the Bermuda Consumer Price Index at December 31, 2008.

• 2008/2009 BUDGET
  
  

The budget for the fiscal year April 1, 2008 to March 31, 2009 was presented to Parliament on February 15, 2008 by The Hon. Paula A. Cox, J.P., M.P., Minister of Finance. The Minister announced the following amendments to:

Payroll Tax


• The standard rate of 13.50% will increase to 14.0% and applies to taxpayers with an annual payroll greater than $1,000,000 and exempt undertakings.
• New start-up businesses in Economic Empowerment Zones will have a concessionary Payroll Tax rate of 4.75% in their first 9 tax periods of operation.


Stamp Duty


• For properties that sell for amounts up to $1,000,000, the lowest rate of Stamp Duty on the conveyance or transfer on the sale of land will be reduced from 2.5% to 2.0.
• For properties that sell for more than $1,000,000, the two highest rates of Stamp Duty on the conveyance or transfer on the sale of land will be increased by one percentage point to 6% and 7% respectively.


Airline Departure Tax


The rate will increase by $10 to $35.


Yacht Arrival Tax


The rate will increase to $35.


Land Tax


The Old State House in the Town of St. George will be exempted from Land Tax by way of an Exemption Order under the Land Tax Act 1967.


• 2007/2008 BUDGET
  
  

The budget for the fiscal year April 1, 2007 to March 31, 2008 was presented to Parliament on February 16, 2007 by The Hon. Paula A. Cox, J.P., M.P., Minister of Finance. The Minister announced the following amendments to:

Payroll Tax


• The standard rate of 13.50% remains the same but the salary cap will be increased from $235,000 to $350,000.
• Hotels have been granted an extension to the period during which they are charged Payroll Tax at the reduced rate of 7.75%. The months of November and March will be added to the current period of December through February.
• New start-up businesses in the Economic Empowerment Zone will have a concessionary Payroll Tax rate of 4.75% in their first 12 months of operation.


Foreign Currency Purchase Tax


The Foreign Currency Purchase Tax rate will be increased from 25 basis points or 0.25 per cent to 50 basis points or 0.50 per cent.
These Budget changes take effect April 1, 2007.


• 2006/2007 BUDGET
  
  

The budget for the fiscal year April 1, 2006 to March 31, 2007 was presented to Parliament on February 17, 2006 by The Hon. Paula A. Cox, J.P., M.P., Minister of Finance. There were no major changes to taxes under the administration of the Office of the Tax Commissioner.

• The Memorandum of Understanding (MOU) Agreement between the Government of Bermuda and the Bermuda Hotel Association (BHA)
  
  
Extended to: March 31^st 2014

To qualify for the Hotel MOU as offered Hotel Properties had to be part of the BHA when the Agreement was initiated and signed on February 21, 2009.  Hotel Properties who have joined the BHA after the initial date must have their application vetted and approved by the Department of Tourism before being declared eligible for the Hotel Concession.

Payroll Tax (Under MOU)

• Quarter ending December 2008 - Employee portion only due and payable by 31/March/2009
• Quarters ending March 2009 thru March 2014 - Payroll Tax returns must be completed as normal and submitted each quarter, without payment.

Hotel Occupancy (Under MOU)

• December 2008 Return – Tax due was payable by February 28, 2009
• March 2009 thru March 2014 Tax Returns - Tax is due and payable on a quarterly basis.

Note: Taxpayers failing to abide by the terms of the above agreement will be subject to penalties and underpayments.




• The Memorandum of Understanding (MOU) Agreement between the Government of Bermuda and the Bermuda Chamber of Commerce (Restaurant Division) and other Qualifying Restaurants
  


Extended to:  March 31^st 2014

To qualify for the Restaurant MOU as offered, Restaurants must complete an application form furnished by the Office of the Tax Commissioner and be current with respect to payroll taxes at the time of application.
 
Once approved, qualifying Restaurants are permitted to pay the employee portion of Payroll Tax at the reduced rate of 4.75% at the quarter end following the date of approval.  Taxpayers are to be advised of the following conditions with respect to the application of the Restaurant MOU:


• The application is not retroactive – That is periods before the approval of a completed application will be subject to the normal tax rate.
• Taxpayers who pay a return during a period under the MOU, will not be refunded.
• Taxpayers filing late returns will be subject to late payment penalties on the 4.75%.
• The 4.75% is to be calculated on the gross remuneration given (Section D).
• Taxpayers under the MOU are not eligible for Special Relief deductions.

Note: Taxpayers failing to abide by the terms of the above agreement will be subject to penalties and underpayments.



• The Retail Payroll Tax Concessions Agreement between the Government of Bermuda and the Retail Sector



Extended to: March 31^st 2014

Taxpayers qualifying as a Retail Establishment have been provided the concessionary rate of 0% for the period October 1st 2011 to March 31^st 2013 with an extension for the fiscal year April 1^st 2013 thru March 31^st 2014.

Establishments falling under this concession are required to provide a fully completed Payroll Tax Return each quarter - without payment.

For the purpose of this concession a Retail Store is defined as: "….Any place which is used for the carrying on of a business the "primary purpose" of which is the sale of goods by "retail" to customers";

Please note that… "Primary Purpose" requires that more than 50% of the businesses revenues are derived from the sale of good to customers.

Taxpayers unsure of their 'Retail' status must submit their query in writing. Queries submitted by email must be sent to taxenquiry@gov.bm.

Note: Taxpayers failing to abide by the terms of the above agreement will be subject to penalties and underpayments.

The Stamp Duties Amendment Act 2005 exempts the Primary Family Homestead from Stamp Duty which would otherwise be payable upon the death of an owner. It provides that an owner can designate a property for this exemption. In particular, it will allow an owner of more than one property to choose which one should benefit from the exemption. The exemption is from the Stamp Duty chargeable on the estate of an owner upon death and it would be granted on the Affidavit of Value. It does not affect the existing exemption from Stamp Duty on assets passing to a surviving spouse. For questions regarding the application of the Primary Family Homestead designation please contact:  Kamelah Moore (kzmoore@gov.bm, tel. 294-9122), Julia Washington (jwashington@gov.bm tel. 297-7749) or Janice Williams (jwilliams@gov.bm tel. 297-7684).