Business

Premier tables payroll tax amendment

  • Straight down to business: David Burt tabled three pieces of legislation on Friday

Despite Friday’s shortened Parliamentary proceedings that finished just before 1pm David Burt introduced three pieces of legislation to the House of Assembly.

The Premier tabled The Companies Amendment (No 2) Act 2017, The Payroll Tax Amendment (No 3) Act 2017 and the USA Bermuda Tax Convention (No 3) Act 2017 — although no further details of the legislation were provided.

A spokesman for the Ministry of Finance later provided more information on the three bills.

The Companies Act amendment referred to the change made in the last Budget to raise company licence fees — from $1,995 to $25,000 — specifically for those companies without a physical presence on the island.

This was intended to be a defence for Bermuda in the tax-haven debate, as it targets those subsidiaries with postbox addresses, used by multinational corporations to minimise their tax bills.

The amendment will carve out exclusions from the fee hike for companies in specific lines of business, namely the ownership, commercial management or operation of ships or aircraft; pharmaceutical operations; research and development in bioscience or biomedicine; or charity.

The Payroll Tax Amendment aims to clarify the definition of what compensation is subject to payroll tax, after a previous amendment earlier this year referred to “gross earnings” for the employee’s portion of payroll tax.

The amendment will make clear that the definition of “remuneration” in the Payroll Tax Act 1995 will apply to both employer’s and employee’s shares. Therefore “any wages, salary, leave pay, commission, gratuity, fee, bonus, perquisite or allowance” will be subject to the tax.

Referring to the USA Bermuda Tax Convention (No 3) Act 2017, a spokesman for the Ministry of Finance said the new legislation “proposes to amend the Act’s regulations-making provision from that of the affirmative resolution procedure to that of the negative resolution procedure as a proactive step, should the USA subsequently invite Bermuda to do something that required Bermuda to make further Regulations or amend the current Regulations under the USA-Bermuda Tax Convention Act 1986.

“The Premier and Minister of Finance also proposes to amend the Act to provide that a contravention or failure to comply with the terms and conditions of an arrangement for the automatic exchange of information under the Act might be subjected to a civil penalty as prescribed by regulations.”

Meanwhile Kim Wilson, the Minister of Health, introduced a further two proposed statutes: The Proceeds of Crime Amendment (No 2) Act and the Quarantine Amendment Act 2017.

The new legislation could be debated by MPs as early as next Friday.

Ms Wilson also laid down the Quarantine (Maritime and Air) Regulations 2017 for consideration of the House.