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02 March 2017
New legislative proposals aim to establish the BVI International Tax Authority (ITA) as a fully fledged independent government institution in the British Virgin Islands with its own legal personality, giving it autonomy over the performance of its functions.
The ITA was initially established within the Ministry of Finance to administer cross-border tax matters involving the British Virgin Islands. It was designated by the financial secretary as the competent authority under the Mutual Legal Assistance (Tax Matters) Act 2003 to perform these functions. Under the act, the financial secretary is designated as the competent authority. Further, under the framework of the act, the functions of the ITA include:
While rating the British Virgin Islands as 'largely compliant' in its Supplementary Peer Review Report, Phase 2: Legal and Regulatory Framework, the Global Forum on Transparency and Exchange of Information for Tax Purposes recommended that the British Virgin Islands should take the appropriate measures to ensure that it responds to all exchange of information requests in a timely manner and take a more tailored approach in handling these requests in circumstances which are not encountered on a routine basis and are likely to result in longer response times. Therefore, the British Virgin Islands has made a further commitment to the international standards on tax transparency and exchange of information requests and introduced The International Tax Authority Act 2017, under which the ITA will no longer operate as a department of the Ministry of Finance of the BVI Government. Instead, when the act is passed into law, the ITA will have a semi-autonomous character and be a statutory body with quasi-judicial authority. The scope of the proposed functions of the ITA, as outlined in the act, cements the British Virgin Islands' commitment to the recommendations made under the peer review.
Since 2009 these standards have evolved and new standards on automatic exchange of information have been introduced. As these standards continue to evolve and change, so too must the machinery required to cooperate on an international level. Through the passage of the act, the BVI government seeks to ensure that such cooperation is handled in the most efficient way and that the ITA is adequately staffed to do so. In order to better achieve these standards, it was determined that the ITA would be best served by being a statutory body, removed from the main day-to-day government operations and systems.
Some of the key features that the act is expected to introduce include:
From an administrative perspective, the act:
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