Bermuda has no sales tax. There is no VAT, no general services tax, and nothing added at the register when you pay. The government raises the equivalent revenue at the border, through customs import duties charged on almost everything shipped onto the island, and through a small set of targeted taxes on specific services like hotel stays and vacation rentals. The duty is paid by the importer and folded into the shelf price, so the tax is real but invisible at checkout.
How Bermuda Taxes Consumption Instead
Bermuda has never adopted a broad-based consumption tax. The idea has been studied over the years, but successive governments have stuck with customs duties and payroll taxes as the main revenue engines. The reason is geographic: with almost no domestic manufacturing, nearly every physical product on the island has been imported, and taxing goods once at the port is simpler than tracking retail transactions across thousands of shops.
The result is a higher cost of living without a visible tax line. Duty on general commercial imports averages 22.25%, and that charge is already baked into the sticker price you see. You don’t get a receipt breaking out how much of your grocery bill is tax, but it is there.
Customs Import Duty: The De Facto Sales Tax
Customs import duty is the closest thing Bermuda has to a sales tax on goods. It is levied on the importer when goods enter the country, calculated as a percentage of the transaction value under the WTO valuation rules Bermuda follows.1Privacy Shield. Bermuda – Import Tariffs
The most common rate is 22.25% for general commercial imports. Food items generally sit between 5% and 15%. Medicines, corrective eyewear, and reading materials come in at 0%.1Privacy Shield. Bermuda – Import Tariffs Some categories are taxed much more heavily.
Alcohol and Tobacco
These are charged at specific per-unit rates rather than a straight percentage. Spirits carry a duty of $32.00 per liter of absolute alcohol. Wine is $6.00 per liter and beer $1.36 per liter. Cigarettes are taxed at $80.00 per kilogram (roughly per 200 units), and cigars at 35% of value.2Government of Bermuda. Bermuda Customs Tariff 2025 Retail prices reflect it.
Vehicles
Motor taxis are charged a 10% import duty.3Government of Bermuda. Importing a Vehicle Private vehicles face higher rates that vary by engine size and value, and the total cost of a car in Bermuda can run to roughly double what the same model would sell for in the United States.
The Sugar Tax
Sugary soft drinks, candy, and pure sugar imports are hit with a sharply elevated customs duty rather than a separate register tax. When the government introduced it in October 2018, the rate was 50%. In April 2019 it rose to 75% and expanded to include products containing cocoa.4Government of Bermuda. The Sugar Tax Like other duties, the 75% charge is applied at the border and absorbed into shelf prices, which is why a can of soda or a chocolate bar costs so much more in Bermuda than in most other markets.
What Travelers Pay When Bringing Goods In
Personal goods you bring with you fall under a duty-free allowance. Bermuda residents and those entitled to reside on the island get a BDA $300 allowance on accompanied personal goods acquired abroad. Visitors get a BDA $50 allowance on goods that will remain in Bermuda.5Government of Bermuda. Duty Free Allowances Anything above the threshold is assessed at 25% of the excess value.6Bermuda L. F. Wade International Airport. Bermuda Customs and Immigration
Under-declaring is expensive. The standard penalty is three times the duty you tried to avoid, on top of the original duty owed, and undeclared goods can be seized on the spot. If you can’t pay immediately, Customs holds the goods against a numbered bond tag. After three days without payment, the goods move to a Queen’s Warehouse and storage charges begin. After 33 days, the government treats them as abandoned and can dispose of them. You can appeal within 30 days of the penalty notice, but the outstanding duty has to be paid before Customs will review the case.7Government of Bermuda. Penalties for Evading Import Duty
Targeted Taxes on Specific Services
Because customs duty only reaches physical goods, services get taxed separately, industry by industry. There is no general services tax, and none of these apply broadly at retail.
Hotels and Vacation Rentals
Hotels pay a 7.25% Hotel Occupancy Tax under the Miscellaneous Taxes Act.8Government of Bermuda. Hotel Occupancy Tax Short-term vacation rentals are taxed at 4.5% of the rack rate, collected from the guest by the property owner or the booking platform. Airbnb collects and remits the fee directly to the Bermuda Tourism Authority. As of February 1, 2026, VRBO does the same for its listings. Owners using other platforms have to collect and remit the fee themselves each month.9Government of Bermuda. Vacation Rentals Fact Sheet and Forms
Corporate Services
Anyone providing corporate services to an exempted undertaking in Bermuda pays a 7% tax on the revenue from those services. Exempted undertakings include exempted companies, exempted partnerships, and permit companies as defined under the Companies Act 1981.10Government of Bermuda. Corporate Services Tax The charge is aimed at the professional services industry supporting the international business sector, not at retail consumers.
Financial Services
Three categories of financial institution pay a quarterly Financial Services Tax:
- Banks: 0.0075% on consolidated gross assets at the end of each tax period.
- Domestic insurers: 3.5% on gross premiums written, excluding health insurance premiums.
- Money service businesses: 1% on aggregated outgoing money transmission volume.
These rates have been in effect since April 2019.11Government of Bermuda. Financial Services Tax
Foreign Currency Purchases
A 1.25% tax applies when a Bermuda resident buys foreign currency from a local bank.12Government of Bermuda. Foreign Currency Purchase Tax The Bermuda dollar is pegged to the U.S. dollar, and because most overseas spending requires conversion, this functions as a small surcharge on outbound purchases.
What Isn’t Taxed
Bermuda carves out exemptions to keep essentials affordable. A wide range of basic food items are entirely exempt from customs duty, and medical supplies, corrective eyewear, and reading materials are zero-rated.1Privacy Shield. Bermuda – Import Tariffs Medical care, educational services, elder care, and child care sit outside the targeted service taxes.
On the personal side, Bermuda does not tax personal income, capital gains, dividends, interest, or inheritances, and there is no withholding tax on payments to non-residents. What you’re taxed on is what you spend and import, not what you earn or invest.
Duty Relief for New Residents
If you’re moving to Bermuda and shipping household belongings, you can claim duty relief on used personal and household goods, provided you can show the items have been in your possession for at least six months.13Government of Bermuda. Exemption From Duty When Moving to Bermuda The goods must arrive within 90 days of the date you arrive to take up residence, and you have to apply for a Transfer of Residence Allowance within the same window.14Government of Bermuda. Public Notice 28 – Duty Free Allowance Transfer of Residence When you land, ask a customs officer for a Transfer of Residence Certificate; you’ll need it to clear your shipped goods.