The British Virgin Islands (“BVI”) International Tax Authority (“ITA”) has issued a set of guidance notes in relation to the Common Reporting Standard (the “CRS Guidance Notes”) to assist in the interpretation of the Standard for Automatic Exchange of Financial Information in Tax Matters developed by the Organisation for Economic Co-operation and Development (“OECD”) as implemented in the BVI.
A copy of the guidance notes can be found at:
http://www.bvi.gov.vg/sites/default/files/ITA/guidance_notes_20161012154316.pdf
The CRS Guidance Notes relate to all the BVI entities that are tax resident in the BVI and have been classified for Common Reporting Standard (“CRS”) purposes as Financial Institutions (“FIs”). The default position for companies incorporated in the BVI is that they are tax resident in the BVI for CRS purposes, unless they acquire a different tax residence. The most common way of acquiring a different tax residence is for the company to be managed and controlled elsewhere, meaning that the majority of the directors are resident in and meet in another jurisdiction.
The CRS Guidance Notes have clarified, among other things, the following with regard to those entities that have been classified as FIs that are tax resident in the BVI:
- All existing FIs, i.e. those in existence as at 17 September 2018, whether they are Reporting or Non Reporting FIs, are required to have registered with the ITA by 30 April 2019, unless they have previously registered with the ITA through the BVI Financial Account Reporting System (“BVIFARS”). The registration deadline for Non-Reporting FIs only has been extended to 28 June 2019. Only BVI Reporting FIs will have to file actual CRS reports by the deadline of 31 May annually (including nil reports, where applicable).
- BVI tax resident FIs are required to establish, implement and maintain written CRS policies and procedures by 31 March 2019. This deadline has come as somewhat of a surprise to the industry. Informally the BVI ITA has said that will expect to see a CRS written policies document if they inspect a BVI FI, but it does not appear that the date of the document will be a critical factor.
Please note that Sertus does not provide legal or tax advice to clients, and therefore if any of your BVI companies are tax resident in the BVI, are classified as FIs, and have not already registered with the ITA, you should contact your legal or tax advisor.
If you have any questions regarding the above, please feel free to contact your Sertus Client Services Representative or contact us at info@sertus-inc.com.