BVI Financial Institutions now have three new obligations that can be summarised as follows:
- To establish, implement and maintain internal policies and procedures to comply with their reporting obligations under the Common Reporting Standard (CRS). The policy must cover how the FI will identify the jurisdiction or jurisdictions where the account holder or controlling person is resident for tax purposes; how the FI will apply the CRS due diligence procedures; and how information and records of accounts will be kept for six years after the last activity or end of the material year.
- To register with the International Tax Authority (ITA) in the BVI by the 30th April 2019. The requirement to register previously applied only to reporting FI’s but has now been extended to all FI’s.
- To file an annual nil return if the FI held no Reportable Accounts in the previous calendar year. Before the introduction of the amended legislation, the requirement to file a return only applied an FI that held Reportable Accounts, but has now been extended to all FI’s, with FI holding no Reportable Accounts obliged to file a nil return. The deadline for the annual reporting is on or before 31st May for material accounts in the previous year ie 2019 reporting relates to 2018 accounts.
The implementation of Country by Country Reporting broadly adopts the model formulated in the OECD Base Erosion and Profit Shifting Action Report (BEPS) in the BVI through the Mutual Legal Assistance (Tax Matters)(Amendment) Act 2018.
The legislation applies to qualifying multinational enterprises (MNE’s) which are now obliged to report specified financial information in respect of each of the tax jurisdiction where they operate. The reports will be made in the BVI to the ITA which will automatically exchange CbCR with other participating jurisdictions.
It is intended that the reporting will facilitate greater transparency and assist local tax authorities to make high level transfer pricing risk assessments based on the information that has been disclosed by the MNE’s.
The legislation defines what constitutes a MNE Group, the entities that are required to register with the ITA and introduces penalties should a material entity fail to register. Reports must be filed within 12 months of reporting tax year of the MNE Group.
For more information, please contact Peter Brigham: firstname.lastname@example.org