BVI FIs Reminded of their obligation to comply with IGAs

15/03/2016

The Government of the BVI continues its efforts to adhere to international tax compliance agreements by reminding BVI Financial Institutions (BVI FIs) of their reporting obligations under the Inter-governmental Agreements (IGA) the Government of the BVI has signed with the Government of the UK and the Government of the US. These agreements ensure the automatic exchange of information between jurisdictions.

IGA signed with UK Government  is referred to as: UK CDOT (UK Agreements with Crown Dependencies and Overseas Territories) or UK FATCA (Foreign Account Tax Compliance Act) or UK IGA

IGA signed with US Government  is referred to as: US FATCA or US IGA

BVI FIs have an obligation to collect and maintain information in accordance with Annex I of the IGAs and report all relevant accounts. BVI FIs are required to enrol on BVI FARS. This is the portal used for submitting reports. 

US FATCA

The first reporting for the US FATCA occurred last year. Any BVI FIs that were unable to complete their customer due diligence for 2014 are reminded that the dead was extended, as such submissions will be accepted without incurring penalties.  The annual reporting deadline is 31st May.

UK CDOT

The first reporting for the UK CDOT is required this year. This reporting period covers 1st July 2014 to 31st December 2015.

BVI FIs that are required to report under UK CDOT are advised to refrain from enrolling on BVI FARS at this time, as the system has not been configured to accept these filings.

BVI FIs that have already enrolled with BVIFARS for US FATCA and also has UK CDOT requirements will not be required to submit a new enrolment application.  However, such FIs will have to complete a Change of Reporting Obligations form to update their reporting profile to include UK CDOT.

BVIFIs will be informed when BVIFARS is ready to accept UK CDOT filings.

CRS

UK CDOT will fully transition to Common Reporting Standards (CRS) by 2018. To aid in this transition, 2016 accounts under UK IGA and CRS will be required of all CDOT. BVI FIs are reminded that CRS is based on tax residency and not citizenship.

ARR

Alternative Reporting Regime (ARR) reports are expected to be sent to the ITA via an encrypted email with the excel spreadsheet attached. Specifics on sending the ARR reports can be found in the attached document.

All of the IGAs discussed above have been incorporated into BVI laws via the Mutual Legal Assistance (Tax Matters) Act 2003. BVI FIs are reminded that failure to comply is an offence. For more information please click here. To go directly to the ITA’s website please click here.

 

 

About International Tax Authority:

The International Tax Authority (ITA) was established to take a proactive stance in relation to all cross border tax matters that currently affect or have the potential to affect the Virgin Islands.  The ITA is the designated Competent Authority under the Mutual Legal Assistance (Tax Matters) Act, 2003 (the “Act”), which means that the ITA has the obligation to perform the functions of the Competent Authority under the Act.