- How can I register for Corporate Services Tax?
Under the Corporation Services Tax Act 1995 (the 1995 Act), a provider of corporate services is required to apply to the Tax Commissioner for registration within thirty days after becoming a provider of corporate services. Registration forms are available from the Office of the Tax Commissioner, 1st Floor F. B Perry Building, 40 Church Street, Hamilton HM12. Telephone enquires may be made at 441-295-5151.
- Who is a provider?
A provider is an individual natural person, a company, partnership, association, or body of persons, whether incorporated or unincorporated, but does not include an exempted undertaking. An exempted undertaking means an exempted company, an exempted partnership or a permit company.
- What are corporate services?
Corporate services means any one or more of the following services provided to an exempted undertaking: corporate administrative services, corporate management services, corporate secretarial services, the provision of a registered office, functioning as director or resident representative, and the provision of accounting and financial services.
Corporate Services do not include:
- Banking business transacted in Bermuda with and through a bank licensed under the Banks and Deposit Companies Act 1999. Banking business is defined as the business of receiving a current, savings, deposit or other similar account, money which is repayable on demand by cheque or order and which may be invested by way of advances to customers or otherwise. All services as outlined above as well as any services provided by financial and securities institutions are subject to this tax.
- The audit of financial statements.
- The management of an insurance company by a local company.
- How are these services defined?
The following is a guide to the interpretation of the terms used in the 1995 Act, and indicates that the terms relate to functions described for the most part in the Companies Act 1981 (the 1981 Act). The following references to "sections", unless otherwise stated, are in reference to the 1981 Act.
- Corporate Administrative Services
The provision of services of an administrative nature which are not specifically referred to in paragraphs 2 to 7. This includes services relating to the formation of an exempted undertaking in Bermuda and the administration of its affairs after formation.
- Corporate Management Services
Section 91 requires directors to manage a company's affairs. Where the management of an exempted undertaking's affairs is contracted to be done on a fee for service basis, those fees are taxable. This management may include the provision of directors' service.
- Corporate Secretarial Services
Section 92 requires a company's directors to appoint a company secretary. The company secretary holds office in accordance with the company's bye-laws and usually ensures that the company follows its procedural and legal obligations. Where company secretarial functions are contracted to be done on a fee for service basis, those fees are taxable.
- Provision of a registered office
Every company must have a registered office in accordance with Section 62 to which all communications and notices may be addressed and where the share register and accounts are kept. An exempted partnership is also required to maintain a registered office.
- Performance of functions in the capacity of director
Section 91 requires a minimum of two company directors. Section 130 requires sufficient directors to be resident in Bermuda in order to form a quorum at meetings. Where the provision of corporate services for a fee includes the services of persons who are elected as directors, such fees are taxable.
- Performance of functions in the capacity of resident representative
Section 130 allows a resident representative to be appointed in lieu of directors ordinarily resident in Bermuda. The resident representative is required to keep minutes, financial statements, records of account, and evidence of listing of the company on an appointed stock exchange. Fees for providing this service are taxable. It should be noted that the terms include a partnership representative and a permit company representative.
- Accounting and Financial Services
Sections 83 and 84 require every company to cause to be kept proper records of account and financial statements of exempted undertakings for a fee is a service which makes the fee taxable. The fee for an audit of the financial statements is not taxable.
- When should payment of tax be made?
The Corporate Service Tax return must be completed and filed with payment of tax at 6% within 15 days of the end of each calendar quarter. Late payments attract a penalty of 5% per month to a maximum of 30%. Further information may be obtained from the Office of the Tax Commissioner.
Click here to return to Frequently Asked Questions