Cultural Goods and Bermuda Tax Law

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Cultural Goods and Bermuda Tax Law Foreword The following Memorandum has been prepared for the assistance of anyone who is considering importing Cultural Goods (which includes artwork and antiques) into
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Cultural Goods and Bermuda Tax Law Foreword The following Memorandum has been prepared for the assistance of anyone who is considering importing Cultural Goods (which includes artwork and antiques) into Bermuda, and who may later wish to sell those Cultural Goods. It deals in broad terms with the requirements of Bermuda law and, where applicable, the policies of the Bermuda Government. It is not intended to be exhaustive but merely to provide general information to our clients and their professional advisers. We recommend that our clients seek legal advice in Bermuda on their specific proposals before taking any steps to implement them. This Memorandum has been prepared on the basis of the law and practice as at the date referred to below. Conyers Dill & Pearman February 2013 Page 2 of 6 TABLE OF CONTENTS 1. TAXATION 2. IMPORTATION AND EXPORTATION OF CULTURAL GOODS 3. STAMP DUTY Page 3 of 6 TAXATION There is no income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by persons ordinarily resident in Bermuda. Generally all goods that are imported into Bermuda are subject to import duty. The rate of duty depends on the type of goods, the unit and the mode of transport. IMPORTATION AND EXPORTATION OF CULTURAL GOODS If a person imports Cultural Goods into Bermuda by aircraft, and the goods accompany that person, duty shall be imposed at the standard rate, which is presently 25% of the value of the good. This is the most expensive way to import Cultural Goods. If the Cultural Goods are imported by courier or postal service, the amount of duty payable is presently 8.5%. The amount of duty payable is based on the type of good imported. If the Cultural Goods are Collections or Collectors Pieces of Zoological, Botanical, Mineralogical, Anatomical, Historical, Archaeological, Palaeontological, Ethnographic or Numismatic Interest then the rate of duty is 0.00% There are export taxes in Bermuda and the rate is 10% of the value of the goods. If however, the Cultural Goods were imported into Bermuda and the import duty has been duly paid, then the Cultural Goods will be exempt from export taxes. If Cultural Goods are to be imported into Bermuda for a limited period of time it is possible that the goods will be exempted from import and export duty. It is also possible to get exemptions from import and export duty if the Cultural Goods are to be imported for exhibition, auction or sale under certain conditions. Page 4 of 6 STAMP DUTY The only other tax that is applicable on Cultural Goods is Stamp Duty. This is payable on all documents evidencing transfers including sales, lifetime transfers and transfers on death during the process of obtaining the grant of probate. Where a person dies owning property in Bermuda and an application for a grant of probate is required, probate Stamp Duty is payable on the value of the Bermuda assets (which would include Cultural Goods located in Bermuda). Stamp Duty is payable at a rate of up to 20% of the sworn value of the estate. For lifetime transfers by way of sale and voluntary transfers to another person, the Stamp Duty payable ranges from 2.5% for the first $100,000 of the value of the property to 6% if over $1,500,000. Ownership of Cultural Goods by a corporate entity may avoid the Stamp Duty due upon death. Page 5 of 6 This publication is not a substitute for legal advice nor is it a legal opinion. It deals in broad terms only and is intended merely to provide a brief overview and give general information. About Conyers Dill & Pearman Founded in 1928, Conyers Dill & Pearman is an international law firm advising on the laws of Bermuda, the British Virgin Islands, the Cayman Islands and Mauritius. With a global network that includes 140 lawyers spanning eight offices worldwide, Conyers provides responsive, sophisticated, solution driven legal advice to clients seeking specialised expertise on corporate and commercial, litigation, restructuring and insolvency, and trust and private client matters. Conyers is affiliated with the Codan group of companies, which provide a range of trust, corporate, secretarial, accounting and management services. Page 6 of 6
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