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Bermuda Releases 2013/2014 Budget

Mike Godfrey,, New York

04 July 2013

The 2013/2014 Budget Statement which was read by Bob Richards, Minister of Finance, on Friday, February 22, 2013, resulted in the following changes to tax administered under the Office of the Tax Commissioner.

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 percent 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.

An employer may deduct and retain from any salary or wages paid by him to an employee, a maximum of 5.25 percent during that tax period.

Wages have also been affected by the Budget and effective from April 1, 2013, self-employed persons and deemed employees are required to adjust their notional remuneration by at least 1.9 percent as a result of the annual increase in the Bermuda Consumer Price Index on December 31, 2012.

Some other changes include:

    Self-employed persons operating as full-time taxi drivers must report remuneration of USD7,316.00 with tax of USD530.44 per quarter and part-time taxi operators must report remuneration of USD3,658.00 and are liable for tax of USD265.22 per quarter.
    Qualifying Retail Establishments will continue to pay at a rate of 0 percent from April 1, 2013 to 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.e50 percent or more of the revenue must be generated through sales to the consumer.
    Qualifying restaurants will pay at a rate of 4.75 percent extended to March 31, 2014. Taxpayers must complete the Application Form issued by the Office of the Tax Commissioner and be approved before benefiting from the reduced tax rate.
    Qualifying Hotels will continue to receive tax concessions from April 1, 2013 to 2014 as laid out by the Memorandum of Understanding Agreement between the Bermuda Government and the Bermuda Hotel Association.

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.

TAGS: Finance | tax | business | employees | Bermuda | payroll | tax rates | charities | Education | Education

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