British Virgin Islands: Changes to CRS regulations
British Virgin Islands Financial Institutions are not only required to register with the Competent Authority but also to file a nil return if they have no Reportable Accounts.
On 4 September 2018, the Government of the British Virgin Islands issued an updated Mutual Legal Assistance (Tax Matters) (Amendment) Act, 2018 (“CRS Act”) with certain amendments to the CRS legislation including
- The clarification stating that British Virgin Islands Financial Institutions, in absence of relevant provision or guidance in the CRS Act, are required to follow the obligations per the OECD’s Common Reporting Standard.
- Imposing penalties on British Virgin Islands Financial Institutions up to USD 100,000 for failing to comply with the requirement to establish, implement and maintain policies and procedures to identify Reportable Accounts and to comply with the CRS Act.
- Imposing penalties on British Virgin Islands Financial Institution up to USD 100,000 for failing to register with the Competent Authority by 30 April 2019 or by 30 April of the next calendar year if it becomes a British Virgin Island Financial Institution after the CRS Act becomes effective.
- The requirement to not only register on the portal but also to file a nil return if British Virgin Islands Financial Institution has no Reportable Accounts.
- An addition to the definition of Related Entity in Section 21, which now states that “Related Entity” in relation to two Entities, means
- either Entity controls the other Entity;
- the two Entities are under common control; or
- the two Entities are Investment Entities described in subparagraph A(6)(b) of Section VIII of the Common Reporting Standard, are under common management, and such management fulfils the due diligence obligations of such Investment Entities. For this purpose control includes direct or indirect ownership of more than 50 % of the vote and value 5 in an Entity;
The reporting deadline in the British Virgin Islands remains 31 May of each calendar year. Stay up to date with reporting deadlines with our CRS and FATCA mobile compliance app, and check out our BVI CRS & FATCA Reporting Guide.
Finally the updated CRS Act and the List of Participating Jurisdictions can be found on the website of the Government of the British Virgin Islands.