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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Supplementary Report to Phase 2 Review - British Virgin Islands

This report for Virgin Islands, British has been published on 3 Aug 2015. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  Explicit monitoring of the availability of trust accounting records has only started recently. In addition, a new obligation for trustees to keep reliable accounting records, including underlying documentation, for a period of at least five years in respect of trusts of which they are the trustee, has recently been introduced.  The British Virgin Islands should monitor the implementation of the new obligation on trustees to keep reliable accounting records in respect of trusts. 
The system of monitoring the availability of accounting records in respect of companies and limited partnerships has only recently been introduced and has limitations. Firstly, only a selection of records is reviewed, which does not normally include underlying documentation. In addition, monitoring of the availability of accounting information in respect of companies that were struck off or dissolved less than five years prior to inspection is limited.  The British Virgin Islands should enhance its monitoring of the availability of accounting records with respect to companies and limited partnerships. 
Accounting information has not been readily available in practice in a number of cases related to companies that were struck off the Registry of Corporate Affairs or that were otherwise dissolved less than five years previously, and almost 100 EOI requests are still pending in this regard. In these cases, the British Virgin Islands has limited means of enforcing availability, as the information is generally kept outside the British Virgin Islands and no person in the British Virgin Islands can be held accountable.  The British Virgin Islands should ensure that company accounting records are available for a period of at least five years in all cases, notwithstanding that the company has been struck off or has otherwise been dissolved. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  Although with respect to several EOI requests received in the two-year review period, the British Virgin Islands has applied its compulsory powers, there are many cases where the response to the Notice to Produce Information is still outstanding, and in a number of cases this has resulted in the situation that EOI requests are pending for a long time.  The British Virgin Islands should review its procedures to ensure that there are no delays in applying compulsory powers where appropriate in cases where information is not produced. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     The British Virgin Islands should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  Although the quality of responses has improved since the Phase 2 report, the timeliness has declined, as the average response time is long (less than 30% of the EOI requests received in the two-year review period have been responded to within one year) and many cases are still pending. It is noted that part of the delay was caused by reasonable steps taken by the British Virgin Islands to process the EOI requests, and in almost all pending cases, partial information has been provided.  The British Virgin Islands should ensure that it responds to EOI requests in a timely manner. 
While regular communication was ongoing regarding the large number of EOI requests in early 2014, a more collective approach (instead of the approach taken for any other EOI request received) would have been more appropriate, and might have assisted in responding to a proportion of these requests sooner.  The British Virgin Islands should take a more tailored approach in handling EOI requests in circumstances which are not encountered on a day-to-day basis and are likely to result in longer response times.