The Ministry of Finance has agreed that during the quarter ending 30th June 2020, payroll tax will be set at a zero rate for both the Employer and Employee portions of tax for Qualifying Restaurants and Bars.
Employers must cease deducting Payroll Tax from Employee salaries and if done so already this must be refunded to the Employee.
“The restaurant and bar sectors have been hit hard by the significant decline in sales volume and job losses as a result of the COVID-19 pandemic,” said Minister of Finance, Curtis L. Dickinson.
“As part of the Government’s emergency measures to assist businesses, we instituted short term relief from payroll tax to assist this sector. We recognise thatthe fiscal implications of these actions will be a reduction of Government revenue. However, we anticipate that this relief will ease some of the pressure on restaurants and bars, and especially the lessen the pain being experienced by many Bermudians who work in this sector.”
Applications will only be considered from:
1. Restaurants (as defined in the Restaurant Act 1961) which earn revenue primarily from the sale of prepared food.
2. Qualifying Bars (licensed under the Liquor License Act 1974) which earn revenue primarily from the sale of intoxicating liquor for consumption on the premises.
“Primarily” for the purposes of this relief means 50% or more of revenue generated through sales of prepared food or intoxicating liquor.
The following conditions must be met in order to qualify for the terms offered in this relief:
• Taxpayers must complete the ‘Application to Receive Payroll Tax Relief for Qualifying Restaurants, Bars and the Government of Bermuda’. Forms can be found online at www.gov.bm or a request for a copy can be sent to taxenquiry@gov.bm. Completed forms must be submitted on or before July 7th, 2020 to taxenquiry@gov.bm.
• Taxpayers in arrears must make payment arrangements before submitting the application.
• Employers are required to complete and submit returns via www.etax.gov.bm on or before July 15th. A minimum payment of $1 must be made in order to facilitate online submission. Returns must reflect the total remuneration paid in the quarter.
• Taxpayers must submit the Employee Portion calculator for the April-June 2020 tax period to taxenquiry@gov.bm reflecting the remuneration paid.
• Late returns will incur a 5% penalty. Returns submitted later than 2 weeks past the due date will not be eligible for the concession.
• Any form of Profit Sharing paid in this period will be subject to Payroll Tax. This includes payments such as Bonuses, Dividends etc.
Declarations are subject to audit by the Office of the Tax Commissioner. Penalties for non-compliance will be based on the full amount of tax due at the standard rate. Non-compliance may also be considered an offence of Criminal Tax Evasion which is an indictable offence under section 37 of the Taxes Management Act 1976.
Further queries can be made to taxenquiry@gov.bm.