The Economic Substance Act 2018 (ESA) came into effect at the start of 2019, and it has implications for multinational firms conducting businesses in low and no-tax jurisdictions around the world.
Organisations conducting relevant activities in Bermuda – banking, insurance, shipping, intellectual property (IP), headquarters, and holding companies – are required to submit data to the Registrar of Companies who will then make a determination if they fit the substance requirements. The implications of non-compliance range from civil penalties to fines to imprisonment if the relevant activities and core income generating activities are not being met.
In June 2019, Bermuda amended its ESA to include an exemption for entities that are tax resident in certain third party jurisdictions, consistent with other jurisdictions who have introduced economic substance legislation at the behest of the European Union.
View the timeline.
Download KPMG in Bermuda’s overview of the ESA, and contact us today to get ahead of the next regulatory milestone.
An update from the March 12, 2019 announcement from the EU Economic & Financial Affairs Council.