BVI Beacon Published: 05 November 2014
Eighty-nine countries and territories, including the Virgin Islands, committed to automatically share information about foreigners' financial accounts with each other by 2017, an arrangement that supporters say will bring needed transparency to the global financial system.
Signatories to a treaty that will create a system to automatically share tax information by 2017 pose for a photo in Berlin on Saturday.
Premier Dr. Orlando Smith signed the agreement, which was drafted and promoted by the Organisation for Economic Co-operation and Development, at a meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany.
Currently, several countries have bilateral agreements to share account details, usually via a Tax Information Exchange Agreement, an accord that commences an exchange after a formal request is made.
The Berlin agreement is the first to involve a large number of countries working as a group to share information automatically.
Dr. Smith said that the signing marks the territory's "strong commitment" to transparency, according to Government Information Services.
VI officials have previously asserted that agreeing to government-to-government exchanges of information is the best way to safeguard the territory's financial services sector, which has developed as a worldwide leader in company incorporations in the past three decades.
In the wake of the 2008 global financial crisis, specialist financial centres like the VI have faced growing scrutiny from larger economies who perceive that much-needed tax revenue is being lost through jurisdictions they have dubbed "tax havens."
VI practitioners and government officials, who oppose that label, vociferously deny those accusations. As evidence of a pro-transparency agenda, they point to the territory's signing of 26 TIEAs; a separate agreement signed earlier this year to share information automatically with the United States government under its Foreign Accounts Tax Compliance Act; and similar measures.
Beneficial
According to a statement published by the OECD, signatories to the Berlin agreement also agreed to maintain information about companies' beneficial ownership.
Some jurisdictions, including the VI, require that incorporators track and maintain details of who ultimately owns a company, while others, including Delaware, do not. Regulations on whether or not shareholder and company director information must be available for public viewing vary among jurisdictions, although most share the information with law enforcement and tax authorities.
Last year, United Kingdom Prime Minister David Cameron announced that his government would create a public register of beneficial ownership, and he urged the UK's overseas territories and Crown dependencies to consider following suit.
The VI subsequently published an "action plan" listing a strategy to move toward greater transparency, but officials have not said yet whether the VI will create a central registry of beneficial ownership or whether it will be open to the public.