Do I have to file at home while living in Bermuda?
Residence decides it, and residence is a question of facts rather than of where your post arrives. The one exception is US citizenship, which carries the filing obligation with the person wherever they go. So the first thing we establish is which system still claims you.
Is there a treaty between my country and Bermuda?
Treaty networks change with each protocol and each multilateral-instrument position, so we confirm the treaty in force for your specific year with the issuing authority rather than relying on a published summary. Where there is none, unilateral relief and domestic law do the work instead.
I own property in Bermuda. Where is the rent taxed?
In Bermuda, because that is where the property sits. The complication is the base: gross-rent withholding takes no account of mortgage interest, tax or repairs, so a leveraged property can face tax on turnover. An election onto net profit, where it exists, is what fixes that — and it has its own timing.
There is no income tax in Bermuda, so do I still file at home?
Almost certainly. The absence of a local income tax removes one charge; it does not remove your home country's. If you remain resident in Canada, your worldwide income is taxable there. If you are an American citizen, you file wherever you live. What the absence of local tax does change is the relief: there is no foreign tax to credit, so the whole of the liability falls where residence or citizenship places it. Planning has to be done on that basis rather than on an assumption that the island provides shelter from both systems.
I own shares in a Bermuda insurance company, what must I report?
Owning a foreign corporation brings reporting of its own, separate from anything the company pays you. There is disclosure of the interest itself, and there is the prior question of whether the company's income is attributed to you at home before it is ever distributed. Insurance and investment income is usually the kind that attracts attribution, and the analysis is done from the company's accounts and its ownership record rather than from what has reached your bank account. These obligations exist whether or not Bermuda taxes the company, which is what catches people out.
Does working in Bermuda make me a non-resident of Canada?
Working there is one fact among several. Residence turns on the ties you keep and the ties you cut: a home kept available, a spouse and children who stay, memberships, accounts, and the pattern of your return visits. An island posting that leaves the household in place rarely ends residence on its own. Because there is no local income tax, the cost of getting this wrong is one-sided. If residence continues, the whole liability sits at home with nothing to credit against it. Decide it deliberately at the start, with the evidence recorded at the time.
Can I claim a foreign tax credit if Bermuda takes no income tax?
No. A credit relieves tax you have actually borne abroad, and where no income tax is levied there is nothing to relieve. Payroll and social-insurance contributions made locally are generally not income taxes and do not become creditable simply by being deducted from your pay. This is the point at which people discover that a package described as tax-free is only tax-free locally. The useful work is therefore on the residence position and on the timing of income, rather than on a credit claim, because the credit claim does not exist.
Why am I taxed on profits my Bermuda company never paid out?
Because attribution rules exist to stop income being parked in a company in a place that does not tax it. Where the tests are met, broadly control by home-country shareholders together with income of a passive or investment character, a share of the company's income is treated as yours for the year in which it arises, regardless of distribution. The consequence is a tax liability without a matching receipt, which is a cash-flow problem as much as a tax one. The company's accounts drive the figure, so they need preparing and reading every year, not only when a dividend is declared.
Do I have to report a Bermuda bank or investment account?
Foreign accounts are reportable in their own right, independently of whether they produce income and independently of local taxation. The obligations run on holdings and balances, they can apply to accounts you merely have signing authority over as well as accounts you own, and they are separate from the return that reports the income. Missing them is common among people who moved for a posting and opened a local account for salary. Where years have been missed there are disclosure routes, and using one before contact is made from the revenue side is materially better than answering a letter.
Do I owe state income tax if I live abroad?
Possibly, and it is the part Americans abroad most often miss. States are not parties to tax treaties, several do not follow the federal foreign earned income exclusion, and liability generally follows domicile rather than physical presence. A driver's licence, a voter registration, a home kept available and a mailing address are the facts a state weighs. Some states have no income tax at all, which is why the last state you were domiciled in matters so much. See state residency and domicile.
Can I contribute to an IRA on income I excluded?
No, and this is a real cost of the exclusion. A contribution needs taxable compensation, and income excluded under Form 2555 is not taxable compensation — so an American abroad who excludes their whole salary can have no contribution room at all, traditional or Roth. Someone who instead claims the foreign tax credit keeps the income in the base and keeps the room. It is one of several reasons to model both routes rather than default to the exclusion. See exclusion against credit.
