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 instead, through customs import duties that sit inside the sticker price of nearly everything sold on the island, plus a short list of targeted taxes on specific services like hotel stays and vacation rentals.
The practical result for a shopper is the same as a sales tax, only invisible. A can of soda, a bottle of wine, a pair of shoes, a car: all of them carry duty that was paid by the importer and passed through to you in the shelf price. You just never see it broken out on a receipt.
Why Bermuda Taxes at the Border Instead
Almost nothing is made in Bermuda. With virtually no domestic manufacturing, nearly every physical product has to be imported, and taxing those goods once at the port of entry is simpler than tracking retail transactions across thousands of businesses. Customs duty and payroll tax have long carried the load that a sales tax or VAT would carry elsewhere.
The tradeoff is a higher cost of living. Duty raises prices on groceries, building materials, electronics, clothing, and almost everything else. Because the tax is already embedded in the price tag, you rarely know exactly how much of what you paid was tax.
How Much Is the Customs Duty?
Customs import duty is calculated as a percentage of the transaction value of the imported goods, under World Trade Organization valuation rules that Bermuda has adopted.1Privacy Shield. Bermuda – Import Tariffs
The common rate for general commercial imports is 22.25%. Food items typically fall between 5% and 15%. A handful of categories carry a 0% rate, including medicines, corrective eyewear, and reading materials.1Privacy Shield. Bermuda – Import Tariffs A wide range of basic food items are also exempt entirely.
Alcohol and Tobacco
Alcohol and tobacco are taxed by the unit rather than by percentage of value. Spirits (whisky, rum, gin, vodka) carry duty of $32.00 per liter of absolute alcohol. Wine is $6.00 per liter and beer is $1.36 per liter. Cigarettes are $80.00 per kilogram (roughly per 200 units), and cigars are 35% of value.2Government of Bermuda. Bermuda Customs Tariff 2025 These rates make alcohol and tobacco noticeably more expensive in Bermuda than in most North American or European markets.
The Sugar Tax
Sugary soft drinks, candy, pure sugar, and products containing cocoa carry a 75% customs duty. The government introduced the measure in October 2018 at 50% and raised it to 75% in April 2019, expanding the scope to include cocoa products at the same time.3Government of Bermuda. The Sugar Tax The duty is applied at the border like any other, and it is why a chocolate bar or a can of soda in Bermuda costs dramatically more than it would at home.
Vehicles
Vehicles face a deliberately steep duty structure designed to discourage importation of large, expensive models onto an island with limited road space. Motor taxis are charged 10%.4Government of Bermuda. Importing a Vehicle Private vehicles are charged at higher rates that vary by engine size and value, and the final cost can be roughly double what you would pay for the same car in the United States.
What Visitors Can Bring In Without Paying Duty
If you are flying to Bermuda, you get a personal duty-free allowance. Visitors get a BDA $50 allowance on goods that will remain in Bermuda. Bermuda residents, and those entitled to reside on the island, get a BDA $300 allowance on accompanied personal goods acquired abroad.5Government of Bermuda. Duty Free Allowances Value above the threshold is assessed at 25% of the excess.6Bermuda L. F. Wade International Airport. Bermuda Customs and Immigration
Do not under-declare. If a customs officer finds you understated the value of your goods, the standard penalty is three times the duty you tried to avoid, on top of the original duty owed. Undeclared goods can be seized on the spot. If you cannot pay immediately, Customs holds the goods and issues a numbered bond tag; after three days the goods move to a Queen’s Warehouse where storage charges begin, and after 33 days without payment the goods are treated as abandoned. You have 30 days to appeal a penalty notice, but the duty must be paid before Customs will review your case.7Government of Bermuda. Penalties for Evading Import Duty
Taxes You’ll See on Services
Because customs duty only reaches physical goods, Bermuda layers specific taxes on a few service sectors. These are not a general services tax. Each applies to a defined industry and is collected by the provider.
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 separately at 4.5% of the rack rate, collected from the guest by the property owner or booking platform. Airbnb collects and remits the fee directly to the Bermuda Tourism Authority. VRBO handles the same process for its listings as of February 1, 2026. Owners using other platforms must collect and remit the fee themselves on a monthly basis.9Government of Bermuda. Vacation Rentals Fact Sheet and Forms Expect to see one of these two line items on any lodging bill.
Foreign Currency Purchases
A 1.25% tax applies when a Bermuda resident buys foreign currency from a local bank.10Government of Bermuda. Foreign Currency Purchase Tax The Bermuda dollar is pegged to the U.S. dollar, so this mostly shows up when a resident is funding spending in a currency other than USD.
Moving to Bermuda With Household Goods
If you are relocating and shipping your belongings, you can claim duty relief on used personal and household goods, provided you can prove the items have been in your possession for at least six months.11Government of Bermuda. Exemption From Duty When Moving to Bermuda The goods must arrive within 90 days of the day you arrive to take up residence, and you must apply for a Transfer of Residence Allowance inside that window.12Government of Bermuda. Public Notice 28 – Duty Free Allowance Transfer of Residence When you land at the airport to begin residency, ask a customs officer for a Transfer of Residence Certificate. You will need it when your shipped container clears customs.
What Bermuda Still Doesn’t Tax
No sales tax is only part of a larger picture. Bermuda also does not tax personal income, capital gains, dividends, interest, or inheritances, and there is no withholding tax on payments to non-residents. The consumption-based structure means you are taxed on what you spend and import, not on what you earn or invest. That is the central reason the island’s cost of living is high at the register and comparatively light on the pay stub.