Payroll Tax Act 1995

Link to law: http://www.bermudalaws.bm/Laws/Annual%20Laws/1995/Acts/Payroll%20Tax%20Act%201995.pdf

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Payroll Tax Act 1995
The Laws of Bermuda
Annual Volume of Public Acts 1995 : 16

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57

BERMUDA
1995 : 16

PAYROLL TAX ACT 1995

[Date of Assent 22 March 1995]

[Operative Date 1 April 1995]

ARRANGEMENT OF SECTIONS

1 Short title
2 Interpretation
3 Payroll tax
4 Meaning of "employer"
5 Meaning of "employee"
6 Meaning of "deemed

employee"
7 Remuneration
8 Exemption
9 Rate where employees are

in special situations
10 Rates for certain classes

of employer
11 Remuneration of deemed

employees
12 Notional remuneration
13 Indexing of notional

remuneration

14 Remuneration of self-
employed persons

15 Exempt undertakings
16 Exempt undertakings:

option A
17 Exempt undertakings:

option B
18 Commissioner may obtain

information
19 Recovery of tax from

employee
20 Refunds and remissions
21 Tax period
22 Reduction of tax period in

certain cases
23 Approval of schemes
24 Responsibility for

collection of tax

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25 Commencement
26 Repeals and con-

sequential, transitional
and saving provisions

FIRST SCHEDULE

SECOND SCHEDULE

WHEREAS it is expedient to repeal the law relating to
employment tax and hospital levy and replace that tax and that levy with
a single tax on employers in respect of their payroll, and to make
provision for those and connected purposes:

Be it enacted by The Queen's Most Excellent Majesty, by and
with the advice and consent of the Senate and the House of Assembly of
Bermuda, and by the authority of the same, as follows:

Short title
1 This Act may be cited as the Payroll Tax Act 1995.

Interpretation
2 (1) In this Act, unless the context requires otherwise—

"approved", in relation to a health insurance scheme or a
hospital scheme or a life insurance scheme or a
retirement scheme or a training scheme, means
approved by the Minister under section 23;

"business" means business carried on for gain in Bermuda,
or outside Bermuda from a place in Bermuda;

"the Commissioner" means the Tax Commissioner;

"the Companies Act" means the Companies Act 1981;

"employer", "employee" and "deemed employee" have the
meanings respectively assigned to them in sections 4, 5
and 6;

"exempt undertaking" has the meaning assigned to it by
subsections (3) to (6);

"farmer or horticulturist" includes any person who at any
farm, orchard, garden, plant nursery, greenhouse or
structure used for the growing or raising of any plants,
livestock or poultry, cultivates the soil or raises or
harvests any agricultural or horticultural commodity
including the raising, feeding, caring for, training and
management of livestock, bees and poultry, but does not
include a person operating or managing a livery

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stable, or a person engaged in the business of landscape
gardening or landscaping;

"financial year" means the period beginning on 1 April in
any year and ending on the 31 March next following;

"fisherman" means one holding a fishing boat licence issued
to him under the regulations under the Fisheries Act
1972;

"the Management Act" means the Taxes Management Act
1976;

"member", in relation to a governing body, means a person
entitled to vote at a general meeting of that body;

"the Minister" means the Minister of Finance;

"option A" and "option B' have the meanings respectively
assigned to them in sections 16 and 17;

"payroll"—

(a) in relation to an employer, means the sum of—

(i) the remuneration, or, in the case of an
employer who is an exempt undertaking
under option A, the assumed remuneration,
of the employer's employees; and

(ii) the deemed remuneration of the employer's
deemed employees, if the employer has
deemed employees;

(b) in relation to a self-employed person, means the
sum of—

(i) his own deemed remuneration; and

(ii) the sum of the remuneration of his
employees, if he has employees;

"profit-sharing scheme" means a scheme under which an
employee qua employee in any way shares his
employer's profit;

"the Rates Act" means the Payroll Tax Rates Act 1995;

"remuneration" means "actual remuneration" as defined in
section 7, but—

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(a) "assumed remuneration" has the meaning assigned
to it in subsection (2) of section 16;

(b) "deemed remuneration" has, in relation to a deemed
employee, the meaning assigned to it in subsection
(2) of section 11 and, in relation to a self-employed
person, the meaning assigned to it in subsection (2)
of section 14;

(c) "notional remuneration" has the meaning assigned
to it in section 12 as extended by subsection (4) of
section 14;

"self-employed person" has the meaning assigned to it in
subsection (3) of section 14;

"the standard rate" has the meaning assigned to it in
subsection (2) of section 3;

"tax" means payroll tax;

"tax period" has the meaning assigned to it in section 21.

(2) For the purposes of this Act, to pay remuneration to a
person means to pay or give it to him, or to pay or give it with respect to
him; and cognate forms of "pay" have corresponding meanings.

(3) Subject to subsections (4) and (5), the following are exempt
undertakings for the purposes of this Act—

(a) an exempted undertaking;

(b) a permit company.

(4) Subject to subsection (5), the following are not exempt
undertakings for the purposes of this Act—

(a) an exempted company which, in respect of any of its
business, requires either a licence under the Companies
Act or authority under some other public Act to carry on
business;

(b) an exempted company incorporated by a private Act,
being a company which, but for some provision to the
contrary in its private Act, would require such a licence
or authority;

(c) an exempted partnership or a permit company which is
carrying on business which—

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(i) if the partnership or company were an exempted
company, it would require a licence under the
Companies Act; or

(ii) it requires authority under some other public
Act,

to carry on.

(5) Where a body is not an exempt undertaking by reason of
subsection (4), the Commissioner—

(a) if he is satisfied that the business referred to in
subsection (4) is insignificant compared with the other
business of the body, shall direct that the body is an
exempt undertaking for the purposes of this Act;

(b) if he is satisfied that the business referred to in
subsection (4) is carried on as an enterprise distinct and
separate from the body's other business, shall direct
that the body is an exempt undertaking for the purposes
of this Act in relation to that other business;

and this Act shall then have effect in relation to the body in accordance
with the Commissioner's direction.

(6) In subsections (3) and (4)—

(a) "exempted company", "exempted undertaking" and
"permit company" have the meanings assigned to them
in subsection (1) of section 2 of the Companies Act; and

(b) "exempted partnership" has the meaning assigned to it
in section 1 of the Exempted Partnerships Act 1958.

Payroll tax
3 (1) Subject to this Act, a tax, to be known as payroll tax, shall
be charged in accordance with this Act on—

(a) every employer at the standard rate in respect of—

(i) remuneration paid by him to every employee;
and

(ii) deemed remuneration paid by him to every
deemed employee,

of his during any tax period for services rendered by the
employee or the deemed employee during that tax period

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wholly or mainly in Bermuda, whether or not the
remuneration is paid in Bermuda;

(b) every self-employed person at the standard rate in
respect of his deemed remuneration during any tax
period.

(2) In this Act, the expression "the standard rate" means, in
relation to an employer, the rate prescribed by the Rates Act for the
purpose of paragraph (a), and, in relation to a self-employed person, that
so prescribed for the purpose of paragraph (b), of subsection (1).

(3) In the application of sub-paragraph (i) of paragraph (a) of
subsection (1) to an exempt undertaking which is an employer,
"remuneration" means assumed remuneration if the exempt undertaking
is under option A and actual remuneration if the exempt undertaking is
under option B.

Meaning of "employer"
4 For the purposes of this Act, the employer of a person (call the
employer "A" and the latter "B") is the person to whom B renders services
as A's employee within section 5 or as A's deemed employee within
section 6, except that—

(a) where A does not have control of B's remuneration, then
the person having that control is B's employer; and

(b) where A resides outside Bermuda and B's remuneration
is paid on A's behalf by someone else who resides in
Bermuda (call this person "C"), then C is B's employer,

for the purposes of this Act.

Meaning of "employee"
5 (1) An individual who, whether by way of manual labour or
otherwise, renders services to another person under a contract of service
or apprenticeship is an employee of that other person for the purposes of
this Act.

(2) An individual who renders services to another person—

(a) as an insurance salesman; or

(b) soliciting orders from third parties otherwise than as a
salesman,

is an employee of that other person for the purposes of this Act.

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(3) A musician or other entertainer (whether or not, apart from
this subsection, he is the employee of any other person) is for the
purposes of this Act, as respects any performance for which he is
engaged by any person (regardless of the terms of the engagement), the
employee of the latter person and not of any other person.

(4) A person who, in accordance with a marketing method
approved by the owner or user of a trade mark or trade name, solicits
orders for goods bearing that mark or name which are to be delivered at
a future date, is for the purposes of this Act the employee of the owner or
user of that mark or name, as is any person who (whether directly or
indirectly) transmits any such orders to any such owner or user in
consideration of a commission or profit.

(5) Subsection (4) does not apply in relation to a salesman who
solicits orders for goods to be re-sold by the purchaser at any shop,
warehouse or other trade premises.

(6) An individual who is a director, officer or member of the
governing body of a body corporate is an employee of that body corporate
for the purposes of this Act.

(7) An individual who is a director, officer or member of the
governing body of an exempt undertaking is not for the purposes of this
Act an employee of that exempt undertaking, but he is for those
purposes such an employee if under a contract of service he regularly
performs managerial functions in connection with the day-to-day
conduct of the exempt undertaking's affairs.

(8) A person is not an employee for the purposes of this Act if—

(a) he is under sixteen years of age; or

(b) he is employed by an employer for sixteen hours or less
in any one calendar month; or

(c) he is ordinarily employed outside Bermuda and his
period of employment in Bermuda, whether with one or
more employers, does not exceed four consecutive
weeks;

but nothing in this subsection restricts or limits subsection (3) or (4).

Meaning of "deemed" employee
6 The persons described in the left-hand column of the Table
below are deemed employees, and the bodies specified in the right-hand
column opposite to them are respectively the employers of those persons,
for the purposes of this Act—

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Table

Deemed Employee Employer

(a) partner in a partnership,
being a partnership which is
carrying on business, who
renders services to the
partnership and otherwise
than as an employee
participates directly or
indirectly in income or profits
of the partnership: the partnership

(b) shareholder of a company (as
defined in subsection (1) of
section 2 of the Companies
Act), being a company which
is carrying on business, who
renders services to the
company and otherwise than
as an employee participates
directly or indirectly in
income or profits of the
company: the company

(c) member of the governing
body of an association
(whether incorporated or not),
being an association which is
carrying on business, who
renders services to the
association and otherwise
than as an employee
participates directly or
indirectly in income or profits
of the association: the association.

Remuneration
7 (1) Subject to this Act, the remuneration of a person for the
purposes of this Act is his actual remuneration, that is to say,
remuneration of any kind paid to him, including—

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(a) any wages, salary, leave pay, commission, gratuity, fee,
bonus, perquisite or allowance;

(b) any money paid under a profit-sharing scheme;

(c) any money or other thing of value paid or given to him
as an employee or an ex-employee in connection with
the permanent termination of his employment on
account of redundancy or otherwise, whether or not so
paid or given in a lump sum or in a series of payments
or in respect of one or more tax periods, being, money or
a thing paid or given for services to the employer wholly
or mainly in Bermuda; and it shall be assumed that any
money or thing paid or given by an employer to, or with
respect to, an employee or ex-employee of his at, or
within three years of, the permanent termination of the
employment is remuneration for the purposes of this Act
unless the contrary is proved;

(d) any amount paid with respect to him to a retirement or
provident fund, scheme or society, or under a hospital or
health insurance scheme;

(e) the value of any meals, board, lodging or other benefit of
any kind whatever, and whether provided in cash or
otherwise than in cash;

(f) the rental value of any place of residence provided rent-
free.

(g) where a place of residence is provided at a rent less than
the rental value, the excess of the rental value over that
rent;

(h) any gain obtained by the exercise by him of, or the
assignment or release by him of, a right to acquire
shares or stock in a body corporate, being a right arising
out of services rendered by him (whether in the capacity
of director otherwise) to that body corporate.

(2) Remuneration for the purposes of this Act does not
include—

(a) payments with respect to an employee under the
Contributory Pensions Act 1970, the Hospital Insurance
Act 1970 or under an approved health insurance,
hospital, life insurance or retirement scheme;

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(b) any money paid to an employee under the Workmen's
Compensation Act 1965, or otherwise on account of
sickness or injury or of medical or hospital expenses in
connection with sickness or injury but excluding leave
pay for sick-leave granted in accordance with the
contract or terms of employment;

(c) any money paid by an employer who is carrying on the
business of an hotel, restaurant, boarding house or
other like business out of a fund entirely constituted of
the proceeds of any service charge imposed upon
accounts rendered;

(d) the cost of passages provided at the commencement or
termination of his contract for a person engaged outside
Bermuda for employment in Bermuda under a contract
for a fixed period, and the cost of such passages for his
dependants;

(e) the value of any right to airline concessionary travel,
that is to say, any right to travel by air free of charge or
at a reduced rate granted to any employee of any
employer carrying on an air transport service, or to any
relation of such an employee, as part of that employee's
contract of service or apprenticeship with that employer;

(f) remuneration paid or given to an employee who is a full-
time student at any school, training institution,
university or other similar body, and who is employed on
a Saturday or a public holiday or during a period of
vacation including a half-term holiday;

(g) remuneration paid or given as a lay-off allowance to an
employee whose employment is temporarily discontinued
because of seasonal or other short-term reasons.

Exemption
8 Tax shall not be charged on an employer who is a foreign or
Commonwealth government or an agency of such a government.

Rate where employees are in special situations
9 (1) An employer is not chargeable to tax at the standard rate in
respect of remuneration paid to any employee of his who is in a special
situation, but is chargeable to tax instead at the rate prescribed by the
Rates Act for the purpose of this section.

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(2) An employee is in a special situation for the purposes of
subsection (1)—

(a) while, having Bermudian status, he is undergoing
training under an approved training scheme; or

(b) while he is doing jury service within the meaning of the
Jurors Act 1971; or

(c) while he is on duty with the Bermuda Volunteer Reserve;
or

(d) while he is on duty with the Bermuda Regiment; or

(e) if he is employed—

(i) as a taxi-driver, a fisherman or a farmer or
horticulturist; or

(ii) as a hotel employee in December, January or
February.

(3) Paragraph (a) of subsection (2), but nothing else in that
subsection, applies in relation to an exempt undertaking under option A.

Rates for certain classes of employer
10 (1) An employer who falls within a prescribed class is not
chargeable to tax at the standard rate in respect of remuneration paid to
any employee of his, but is chargeable to tax instead at the rate
prescribed in relation to that class.

(2) "Prescribed" in subsection (1) means prescribed by the
Rates Act for the purpose of this section.

Remuneration of deemed employees
11 (1) A deemed employee is deemed for the purposes of this Act
to be employed and be paid deemed remuneration.

(2) A deemed employee's deemed remuneration is—

(a) his actual remuneration; or

(b) his notional remuneration,

whichever is greater.

Notional remuneration
12 (1) For the purposes of this Act, the notional remuneration of a
deemed employee, in relation to his employer's business, is that amount

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which represents a fair and equitable valuation of his services to the
business.

(2) That amount shall be assessed in accordance with the
following provisions of this section.

(3) The assessment shall be made in the first instance by the
employer ("the taxpayer"), who shall have regard to the following factors
only—

(a) the nature and extent of the services of the deemed
employee to the business, including any such services
which directly or indirectly affect or influence the
financial viability of the business;

(b) the deemed employee's experience and any special skill;

(c) the nature of the business;

(d) the emoluments of—

(i) persons engaged in other businesses who render
to those businesses services similar to those
rendered by the deemed employee to the
employer's business;

(ii) persons engaged in the business who render to
the business services similar to those rendered
by the deemed employee;

(iii) persons engaged in the business other than
those mentioned in sub-paragraph (ii);

(e) the financial records of the business which show—

(i) the services of the deemed employee which
generate revenue for the business; and

(ii) the allocation to him of benefits from the
business.

(4) The Commissioner may make such enquiries as he thinks
fit for the purpose of ascertaining whether an assessment under
subsection (3) is adequate; and he may increase the assessment if he
concludes that it is not adequate.

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(5) The taxpayer shall include an assessment made by him
under subsection (3) in the return made by him under section 7, or, as
the case may be, section 8, of the Management Act.

(6) An assessment under subsection (3) or (4) of the notional
remuneration of a person in relation to a business in respect of a tax
period has effect in respect of any later tax period until varied by a
further such assessment, but so that—

(a) a further assessment under subsection (3) may not
reduce an assessment made and in force under
subsection (4); and

(b) the taxpayer may, at any time within three months
beginning on the last day of a tax period in respect of
which there is an assessment under subsection (4) in
force affecting him, in writing require the Commissioner
to review the assessment; and the Commissioner shall
thereupon confirm or vary the assessment.

(7) An assessment by the Commissioner under subsection (4)
or (6) shall—

(a) have regard to the factors specified in subsection (3) and
no others; and

(b) be retrospective to such tax period as the Commissioner
may determine;

but the Commissioner shall not exercise his powers under paragraph (b)
after the expiry of two years from the date on which the last return was
furnished for the purposes of section 7 or 8 of the Management Act.

Indexing of notional remuneration
13 (1) This section has effect for the purpose of facilitating the
determination under section 12 of a deemed employee's notional
remuneration.

(2) Subject to subsections (5) and (6), where the statutory
conditions obtain in relation to a deemed employee, his notional
remuneration is deemed to be the greater of the following two amounts—

(a) the amount arrived at by the operation of the indexing
mechanism set out in the First Schedule;

(b) the amount of his notional remuneration in financial
year 2, as assessed by the taxpayer.

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(3) The statutory conditions referred to in subsection (2), in
relation to a deemed employee, are that in respect of financial year 1—

(a) the taxpayer made an assessment of his notional
remuneration under subsection (3) of section 12; and

(b) the Commissioner did not make an assessment of the
deemed employee's notional remuneration under
subsection (4) or (6) of that section.

(4) In this section and the First Schedule—

"financial year 1" means the financial year immediately
preceding financial year 2;

"financial year 2" means the financial year in question.

(5) Subsection (2) does not have effect in relation to an
employer where the taxpayer, by application in writing setting forth his
reasons, requests the Commissioner to determine the deemed employee's
notional remuneration in financial year 2 on a basis different from that
provided for in that subsection and the Commissioner accedes to the
taxpayer's request.

(6) This section does not restrict the Commissioner's power to
make under subsection (7) of section 12 a retrospective assessment of a
deemed employee's notional remuneration, except where the
Commissioner has determined the deemed employee's notional
remuneration under subsection (5) of this section.

Remuneration of self-employed persons
14 (1) A self-employed person is deemed for the purposes of this
Act to employ himself and pay himself deemed remuneration.

(2) A self-employed person's deemed remuneration is—

(a) his actual remuneration; or

(b) his notional remuneration,

whichever is greater.

(3) For the purposes of this Act, a self-employed person is an
individual who carries on business otherwise than as an employee and
benefits from the income or profits of that business otherwise than by
way of, or in addition to, being paid actual remuneration.

(4) The provisions of sections 12 and 13 and the First Schedule
have effect mutatis mutandis in relation to a self-employed person as if—

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(a) references in those provisions to a deemed employee
were references to the self-employed person in his
character as an employee; and

(b) references there to the employer or taxpayer were
references to the self-employed person in his character
as an employer or taxpayer.

Exempt undertakings
15 (1) Where an employer is an exempt undertaking, it may make
an election under this section as to the remuneration on which it is to be
charged to tax under this Act.

(2) The election referred to in subsection (1) is an election
between option A and option B.

(3) Unless the requirements of subsection (2) of section 17 and
the Second Schedule are fulfilled in relation to an exempt undertaking in
respect of a tax period, that exempt undertaking is deemed to have made
an election under this section in favour of option A in respect of that tax
period.

(4) In this Act, an exempt undertaking that has, or is deemed
to have, made such an election in favour of option A is referred to as an
exempt undertaking under option A; and an exempt undertaking that is
not under option A is referred to in this Act as an exempt undertaking
under option B.

Exempt undertakings: option A
16 (1) Subsection (2) has effect in relation to an exempt
undertaking under option A.

(2) Such an exempt undertaking is not chargeable to tax with
reference to the actual remuneration paid by it to any of its employees for
services performed wholly or mainly in Bermuda, but is chargeable to tax
instead on the assumption that every such employee is paid for such
services during every tax period, as remuneration, such amount (in this
Act called "assumed remuneration") as is prescribed by the Rates Act for
the purpose of this section.

Exempt undertakings: option B
17 (1) Where an exempt undertaking is under option B, this Act,
apart from this section and the Second Schedule, has effect in relation to
the exempt undertaking as if it were not an exempt undertaking.

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(2) The Second Schedule has effect as to the procedure for
making an election under section 15 in favour of option B, the
consequences of making such an election, and otherwise in relation to
such an election.

Commissioner may obtain information
18 (1) Any person carrying on business in Bermuda or who
employs any other person in Bermuda may be required by the
Commissioner by notice in writing to furnish information to assist him in
the exercise of his powers of assessment under section 12 as extended by
section 14; but this subsection does not empower the Commissioner to
require any person to furnish information relating to an exempt
undertaking.

(2) Where the Commissioner by a notice under subsection (1)
requires a person to furnish him with information set out in the notice,
that person shall furnish the Commissioner with the information not
later than the time stated by the Commissioner in the notice, being a
time reasonable in the circumstances or such extended time as the
Commissioner in his discretion may allow.

(3) A person who—

(a) without reasonable cause refuses or neglects to furnish
information which he is required under subsection (2) to
furnish ; or

(b) without reasonable cause refuses or neglects to furnish
information when and as it required of him under that
subsection,

commits an offence and is liable on summary conviction to a fine not
exceeding $1,000.

(4) A person who furnishes material information under this
section which he knows to be false commits an offence and is liable on
summary conviction to imprisonment for a term not exceeding 6 months
or to a fine not exceeding $2,500.

Recovery of tax from employee
19 (1) An employer may deduct and retain from any salary or
wages paid by him to an employee of his during any tax period the
statutory proportion of the remuneration paid by him to the employee
during that tax period:

Provided that—

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(a) where an employee is paid salary or wages more than
once during a tax period, the employer shall as far as
may be reasonably practicable ensure that equal
amounts are deducted from each payment;

(b) if an employer fails to make a deduction for tax, or fails
to make the full amount of such a deduction, from any
payment referred to in paragraph (a) of this proviso, he
is not entitled to make that deduction from any later
payment; and

(c) where an employer is an exempt undertaking under
option A, it shall not, in making under this subsection a
deduction for tax from any salary or wages, deduct a
greater amount than it could have deducted under this
subsection if it had been an exempt undertaking under
option B at the time.

(2) The statutory proportion mentioned in subsection (1) is, in
relation to remuneration, such proportion of the remuneration as is
prescribed by the Rates Act for the purpose of this subsection.

(3) Subject to subsection (1), tax charged on an employer under
this Act is not recoverable by him from salary or wages paid by him to an
employee of his, notwithstanding any agreement to the contrary.

Refunds and remissions
20 (1) Where the payroll in respect of which any person is
chargeable to tax under this Act does not exceed—

(a) in the case of a person who is chargeable to tax during
the whole of any financial year, such sum as may be
prescribed by the Rates Act; or

(b) in the case of a person who is chargeable to tax during
part only of any financial year, such amount as bears to
that sum the same proportion as that part of the year
bears to a year,

the Commissioner shall refund to that person the amount of tax paid by
him in respect of any tax period during that year or that part of a year,
and shall remit any tax which has not been paid.

(2) This section applies to two or more bodies corporate deemed
to be associated under section 43 of the Management Act as if those
bodies corporate were a single person.

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Tax period
21 For the purposes of this Act "tax period" means each period of
three months commencing on the first day of April, July, October or
January.

Reduction of tax period in certain cases
22 (1) Subject to subsection (3), the Commissioner may, on
application made to him for the purpose by a person chargeable to tax
(hereafter in this section called a "taxpayer"), grant permission in writing
for that taxpayer's tax period to be each and every month for such time
not exceeding twelve months, subject to such conditions, as may be
specified in the permission.

(2) Subject to subsection (3), a permission granted by the
Commissioner may be renewed by him for such further time not
exceeding twelve months (whether or not continuously with the time of
an earlier permission granted to that taxpayer), and as often, as in the
Commissioner's opinion the circumstances warrant.

(3) The Commissioner shall not grant or renew a permission
under this section unless he is satisfied that the taxpayer in question will
suffer hardship if the permission is not granted or renewed.

(4) Where a permission granted or renewed under this section
is in force, the provisions of this Act respecting tax periods shall have
effect as respects that taxpayer subject to the terms of the permission.

(5) A decision made by the Commissioner under this section is
not a decision in relation to which Part IV of the Management Act
applies.

Approval of schemes
23 (1) The Minister may by order made under this section approve
for the purposes of this Act a scheme of any of the following kinds, that
is to say, a health insurance scheme, a hospital insurance scheme, a life
assurance scheme, a retirement scheme and a training scheme.

(2) An order under this section may be made subject to such
terms and conditions as the Minister thinks fit.

(3) The power to make an order under this section includes
power to revoke or vary by another such order an order previously made
in the exercise of that power, but before the Minister makes an order
varying or revoking an order under this section he shall give notice of his
intention to any person who the Minister thinks will be affected by

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the variation or revocation, and take any representation made by that
person into account.

(4) The Statutory Instruments Act 1977 does not apply in
relation to an order made under this section.

Responsibility for collection of tax
24 The Commissioner is responsible for the collection of tax.

Commencement
25 This Act comes into operation on 1 April 1995 ("the
commencement day").

Repeals and consequential, transitional and saving provisions
26 (1) Subject to this section—

(a) the provisions of Parts II to IV of the Miscellaneous Taxes
Act 1976 and every other provision of that Act referring
to those Parts or to employment tax or hospital levy are
repealed; and

(b) every provision of the Miscellaneous Taxes (Rates) Act
1980 prescribing or otherwise relating to a rate for that
tax or that levy is also repealed.

(2) A provision mentioned in subsection (1) is referred to in this
section as "a repealed provision".

(3) Consequentially upon the enactment of this Act—

(a) the Management Act is amended by adding to the list of
taxes specified in the First Schedule to that Act the
following—

"Payroll Tax"; and

(b) the remainder of the Management Act is deemed
amended so as to reflect the inclusion of payroll tax in
the list of taxes to which that Act applies, except that for
the avoidance of doubt it is declared that section 36A of
that Act has no application to payroll tax.

(4) Without prejudice to section 16 of the Interpretation Act
1951, the repeals made by subsection (1) above ("the above repeals") do
not affect any right of any person (including the Commissioner) or any
obligation of any person (including the Commissioner), being a right or
obligation that had arisen in relation to a matter regulated by a repealed

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provision before the commencement day and was in existence
immediately before that day.

(5) Subsection (4) above has effect only so far as it may be
needed for the exercise or enforcement, on or after the commencement
day, of a right or obligation under a repealed provision as in force
immediately before that day.

(6) Notwithstanding the above repeals—

(a) any matter requiring registration under a repealed
provision before its repeal that was accepted by the
Commissioner as being registered immediately before the
commencement day shall continue to be accepted by
him as being duly registered for the corresponding
purposes of this Act until its registration is discontinued
by the Commissioner; and the Commissioner may effect
such a discontinuance by issuing under this paragraph
a notice in writing for that purpose to such person or
persons as may be concerned; and

(b) any approval or determination by the Minister or the
Commissioner that was given or made by the Minister or
the Commissioner under a repealed provision as
respects a matter for which similar provision is made
under this Act shall, if the approval or determination
was in force immediately before the commencement day,
continue in force for the purposes of this Act until
discontinued by the Minister or the Commissioner; and
the Minister or the Commissioner may effect such a
discontinuance by issuing under this paragraph a notice
in writing for that purpose to such person or persons as
may be concerned.

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FIRST SCHEDULE (Section 13)

Indexing of Notional Remuneration

1 Paragraphs 2 and 3 of this Schedule state the manner of
operation of the indexing mechanism mentioned in section 13.

2 If the Bermuda Consumer Price Index published by the
Government ("the Index") for the December next preceding financial year
1 differed from the Index for the December next preceding that
December, then—

(a) the amount of the taxpayer's notional remuneration in
financial year 1, as assessed by him but altered to an
extent equal to the extent, in percentage terms, of that
difference, is the amount to be taken for the purposes of
subsection (2)(a) of section 13; but so that

(b) if in any case the result obtained by a calculation under
sub-paragraph (a) is not a multiple of $5, that result
shall be rounded up to the nearest amount that is such
a multiple.

3 If however the Index for the December next preceding financial
year 1 did not differ from the Index for the December next preceding that
December, then the amount of the taxpayer's notional remuneration in
financial year 1, as assessed by him, is the amount to be taken for the
purposes of subsection (2)(a) of section 13.

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SECOND SCHEDULE
(Sections 15, 16, 17)

Election by Exempt Undertaking under Section 15

Election in favour of option B
1 An exempt undertaking wishing to make an election under
section 15 in favour of option B must deliver to the Commissioner a
notice in writing in a form approved by him.

2 A notice under paragraph 1 must specify a financial year as that
as from which option B arrangements are to commence in relation to the
exempt undertaking, and must be received by the Commissioner on or
before the 31 December next preceding that financial year.

3 An election in favour of option B takes effect as soon as the
relevant notice is received by the Commissioner under paragraph 2.

Duration of operation of option B
4 (1) Where an election in favour of option B has once taken
effect under paragraph 3, that election may not be cancelled except with
effect from—

(a) the beginning of the third financial year next following
the financial year in relation to which the option B
arrangements commenced; or

(b) the beginning of some later financial year.

(2) An exempt undertaking wishing to cancel an election that it
has made in favour of option B must deliver to the Commissioner a
notice in writing in a form approved by him.

(3) A notice under sub-paragraph (2) must specify a financial
year as that as from which option A arrangements are to commence in
relation to the exempt undertaking, and must be received by the
Commissioner on or before the 31 December next preceding that
financial year.

(4) A notice once received by the Commissioner under sub-
paragraph (3) may not be withdrawn.

Duty to inform employees
5 An exempt undertaking which delivers a notice to the
Commissioner under paragraph 1 or 4(2) shall within fifteen days of
delivering the notice inform in writing each person who is at the time an

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employee of the exempt undertaking of the rights that the delivery of the
notice will confer upon that exempt undertaking as employer to make
deductions from his salary or wages.

Offence
6 If an exempt undertaking contravenes paragraph 5 in relation to
a person, it commits an offence in relation to him and is liable on
summary conviction to a fine not exceeding $1,000.

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