Filing the Bermuda Corporate Income Tax Return Explained

Tax Filing in Bermuda: The Corporate Income Tax Return ExplainedCopy link to section

For most of its history, Bermuda imposed no tax on corporate profits, and many foreign owners chose the jurisdiction precisely for that reason. That changed with the Corporate Income Tax Act 2023, which created a 15% corporate income tax and, with it, the Bermuda Corporate Income Tax Return (CIT Return). The tax is administered by the Corporate Income Tax Agency (CITA), and it reaches only a narrow band of businesses: those forming part of large multinational groups.

This article explains who must file the CIT Return, how registration and filing work, the payment and instalment mechanics, and what happens to the many entities that fall outside the regime entirely. It is most relevant to foreign owners and advisers responsible for a Bermuda entity that belongs to a multinational group with substantial global revenue. The Government of Bermuda maintains an official CIT landing page hosting the governing materials and frequently asked questions.

Legal Basis for the Bermuda Corporate Income Tax ReturnCopy link to section

The CIT regime rests on the Corporate Income Tax Act 2023, enacted on 27 December 2023. Its operative provisions apply to tax years beginning on or after 1 January 2025.

A separate statute, the Corporate Income Tax Agency Act 2024, established CITA as the body charged with administering the tax and collecting receipts. The agency has also absorbed responsibility for economic substance and automatic exchange of information, consolidating international tax administration under one authority.

The detail of how filings, registration, payments, and disputes operate sits in the Corporate Income Tax (Administrative) Regulations 2025, issued on 12 May 2025 and effective 2 June 2025. These were further amended in December 2025, and the civil penalty for failure to file Form 001 was introduced by the Corporate Income Tax Amendment (No. 2) Act 2025 under section 46D.

The tax was designed in response to the OECD's Global Anti-Base Erosion (GloBE) Model Rules, often called Pillar Two. While the CIT borrows heavily from those rules, it diverges in important respects, so groups cannot assume their Pillar Two analysis maps cleanly onto the local return.

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Which Entities Must File the CIT Return: Bermuda Constituent Entities and the EUR 750 Million ThresholdCopy link to section

The CIT applies to "Bermuda Constituent Entities" (BCEs), a term covering both Bermuda tax residents and Bermuda permanent establishments that form part of an In-Scope MNE Group. Tax is charged at 15% of net taxable income, less applicable tax credits, on the Bermuda Constituent Entity Group as a whole.

A group is in scope where the consolidated financial statements of its Ultimate Parent Entity show annual revenue of EUR 750 million or more in at least two of the four fiscal years immediately preceding 2025. Given the size of that figure and the exclusions available, the great majority of Bermuda entities are not expected to be caught.

Liability is shared. Each BCE within the group is jointly and severally liable for the tax chargeable to the group, so the obligation cannot be quarantined within a single subsidiary.

Several carve-outs narrow the field further:

• Section 13 limited-footprint relief: A group is not treated as in scope where it has a limited international footprint, meets tangible asset value requirements, and where no constituent entity must apply income inclusion rules to a Bermuda entity. This relief runs for five fiscal years.
• Excluded entities (Section 10) and less-than-80%-owned entities (Section 9) were considered for separate treatment, and some non-BCEs may still face registration questions.
• International shipping income derived under the GloBE rules is excluded under Section 36 of the CIT Act.

The taxable base is built on book income, with adjustments for items such as creditable foreign taxes and the Economic Transition Adjustment.

Registering with the Bermuda Corporate Income Tax Agency (CITA)Copy link to section

Registration runs through the Bermuda Tax Portal, known as CITA Online, where a registered entity receives a Taxpayer Identification Number (TIN). Entities must supply detailed information about the wider group, including the identity of the Ultimate Parent Entity and the Filing BCE.

Timing depends on the entity's role within the group:

Registration is tied to the statutory Annual Return. Every Bermuda company, limited liability company, and exempted or overseas partnership must now answer two new questions on its annual return: whether it is a BCE under the CIT Act, and if so, the name of the Bermuda tax-resident entity acting as representative and point of contact. CITA may draw on information already filed with the Bermuda Registrar of Companies.

Advisers and other non-BCEs may register as authorised representatives, allowing them to act and file on behalf of in-scope entities. The precise form and manner of registration are prescribed by CITA, and certain format details remained under finalisation when the Administrative Regulations took effect.

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The Role of the Filing BCE in Submitting the CIT ReturnCopy link to section

Rather than requiring every group member to file separately, the regime designates a single filer: the Filing BCE. This entity submits the CIT Return on behalf of the whole group each year, together with the necessary accounts, statements, and supporting particulars.

Each group must appoint its own Filing BCE. If no appointment is made by the original due date, CITA may designate one itself, which removes the group's control over who carries the obligation.

The Filing BCE also makes CIT elections for the group, keeping the group's positions aligned and reducing duplicated administration. Elections are set out on the Corporate Income Tax Elections form (CT-ELP), published on 15 December 2023; this form is not a required filing and exists for groups wishing to make elections ahead of submitting the return.

Several practical powers attach to the role:

• Payment of instalments and tax may be made by the Filing BCE on behalf of underlying group entities.
• Overpayments may be reallocated to other BCEs in the same group at the Filing BCE's election.
• A filed CIT Return may be amended no later than three years after its original due date.

The return must be signed by a responsible person, generally an officer authorised to sign for the company or group.

What Must Be Reported in the Bermuda Corporate Income Tax ReturnCopy link to section

The CIT Return is expected to capture the matters, information, accounts, statements, and reports prescribed by CITA, signed off by an authorised officer. At its centre sits the taxable income computation, which begins with financial accounting net income and applies adjustments including creditable foreign taxes and the Economic Transition Adjustment.

Group composition data is maintained directly in CITA Online, where a taxpayer can edit details for both CIT and Tax Credit Benefit purposes. The Filing BCE confirms the group's elections either through the CT-ELP form or within the return itself.

Elections that may be reported or confirmed include:

• The international shipping income exclusion under section 36;
• The de minimis exemption;
• The opening tax loss carry-forward election, which lets in-scope entities carry forward losses over a prior five-year period to offset future profits;
• Fiscal transparency classifications.

One operational point deserves attention. CITA released Form 001 on 16 January 2026 to capture the computation of instalment payments. A BCE files a separate Form 001 for each of the first and second instalments, and the form is generally required regardless of whether an instalment payment was actually made.

The exact prescribed name and field-level specification of the annual CIT Return itself had not been finalised when the Administrative Regulations were issued, so groups should monitor CITA Online for the published format.

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Filing Deadline and Frequency for the CIT ReturnCopy link to section

Filing is annual, and the obligation persists for as long as the group remains in scope. The CIT Return falls due on the 15th day of the 10th month following the fiscal year-end, so a group with a 31 December year-end files by 15 October. Where that date is not a Bermuda business day, the deadline moves to the next one.

Before the return, two instalments must be declared and, where due, paid:

Smaller groups may avoid instalments altogether. A group is exempt where its annual CIT liability is under USD 10,000, or where its fiscal year runs between 32 and 52 weeks.

A "true-up" payment for any remaining balance is due no later than the return's due date, irrespective of when the return is actually lodged. For first and second instalments due before 31 December 2025, regulation 10A set a Form 001 filing deadline of 31 January 2026, extended to 2 February 2026 because 31 January fell on a Saturday. The return deadline itself may be extended by mutual agreement between the Filing BCE and CITA.

Paying the Tax Due Alongside the CIT ReturnCopy link to section

Tax is payable in US dollars unless CITA consents to payment in Bermuda dollars. Two instalments precede the annual return, with the final balance settled at the true-up stage.

The disclosure attached to payment has tightened. Before Form 001, a group needed only to report each instalment amount through CITA Online; Form 001 now requires the underlying computation methodology to be shown. Electronic records are mandated for most filings and communications, though CITA may accept or issue documents in another prescribed form at its discretion.

Interest runs in both directions. Underpayments attract interest at 4% plus the one-year US dollar risk-free spot rate published by the Bermuda Monetary Authority, rounded to the nearest 0.5%. Overpaid tax accrues interest at a published reference rate from 90 days after the return is filed, and a group may instead apply an overpayment against future amounts due.

CITA's enquiry window generally closes on the later of four years after the original due date or four years after a late return was filed. No time limit applies where no return was filed, or in cases of fraud or intentional misstatement.

No filing fee for the CIT Return has been publicly confirmed. Groups should check the fee schedule on CITA Online before assuming none applies.

E-Filing the Corporate Income Tax Return Through the CITA PortalCopy link to section

Filing is conducted electronically through CITA Online at cita.bm. The portal handles registration, submission of the CIT Return, processing of instalment payments, communications and enforcement, and access to technical guidance.

Registration through the portal is the route to a TIN, and group composition for CIT and Tax Credit Benefits is maintained there. The shift to Form 001 added a formal computation-disclosure step on top of the earlier instalment-amount reporting.

Where a foreign owner relies on a tax agent or adviser, that adviser can register as an authorised representative and file on the group's behalf. Because the finalised format of the annual return was still being prescribed when the regulations commenced, practitioners should watch the portal for updated specifications. The PwC Bermuda alert on the administrative regulations covers the registration and instalment mechanics in further detail.

Penalties for Late or Incorrect CIT Return FilingCopy link to section

Failure to file Form 001 in line with the regulations carries a civil penalty of USD 1,000 for each month or part-month the filing stays outstanding, under section 46D of the Corporate Income Tax Amendment (No. 2) Act 2025. Late annual CIT Returns draw civil penalties too, structured as fixed penalties accruing over time, tax-geared penalties, or a combination.

Where a return is late, incomplete, or inaccurate, CITA may raise its own assessment, with interest and penalties attached. Interest on underpayments follows the same formula used elsewhere in the regime: 4% above the one-year US dollar risk-free spot rate published by the Bermuda Monetary Authority, rounded to the nearest 0.5%.

Wilful evasion carries the heaviest exposure. Criminal penalties of up to 100% of the tax evaded, and up to five years' imprisonment, apply in such cases. Where no return is filed, or where fraud or intentional misstatement is found, the assessment period has no limit at all.

Record-keeping failures feed the same enforcement channel: not retaining the required books and records exposes the group to a CITA assessment on the footing that its return is incomplete or inaccurate. The KPMG summary of Form 001 and due dates sets out the section 46D penalty and the relevant deadlines.

Entities Outside CIT Scope and Their Filing PositionCopy link to section

The reality for most Bermuda companies is straightforward: they are not in scope, and they continue to owe no income tax. Exempted companies and partnerships that are not part of a multinational group remain entirely outside the regime.

Bermuda has never imposed tax on profits, income, dividends, or capital gains, sets no limit on the accumulation of profit, and requires no distribution of dividends. That position holds for out-of-scope entities, which also face no separate corporate income tax, capital gains tax, withholding tax, inheritance tax, or personal income tax.

One declaration is still required of everyone. Every registered company, limited liability company, and exempted or overseas partnership must state in its Annual Return whether it is in scope, and an entity claiming it is not a BCE must give a reason, such as not belonging to an In-Scope MNE Group or qualifying as an excluded entity.

Tax Assurance Certificates issued through the Bermuda Monetary Authority remain valid for out-of-scope undertakings, confirming protection from future tax until 31 March 2035; the CIT overrides them only where an entity is within scope. No CIT-specific record-retention duty attaches to out-of-scope entities, though ordinary company law, economic substance, and AML obligations continue independently.

ConclusionCopy link to section

For the overwhelming majority of foreign-owned Bermuda entities, the new corporate income tax changes nothing: they sit below the EUR 750 million group threshold and continue to file only the annual return declaration confirming they are out of scope. The decisive question is not the tax rate but the group test, and that is where attention belongs.

If your Bermuda entity belongs to a large multinational group, treat scope confirmation as the immediate priority, because registration timing, the Filing BCE appointment, and instalment deadlines all flow from it and the penalties for missing them accrue monthly.

How Expanship Can Help Your Business in BermudaCopy link to section

Expanship advises foreign owners on whether a Bermuda entity is within CIT scope, handles registration with CITA, the Filing BCE appointment, Form 001 instalment declarations, and submission of the annual CIT Return, while keeping the related annual return disclosures consistent. The same team supports the wider compliance needs of a foreign-owned entity in the jurisdiction.

• Company incorporation and structuring for Bermuda entities
• Registered agent and registered office services
• Ongoing compliance management and filing deadlines
• Accounting and bookkeeping support
• Economic substance and beneficial ownership reporting
• Banking introductions for new and existing companies

To assess your scope position or arrange filing support, contact Expanship Bermuda.

Frequently Asked QuestionsCopy link to section