Mutual Legal Assistance (Tax Matters) (No. 2) Order, 2010 (SI 2010 No. 13)

Summary

This Order is a Virgin Islands statutory instrument (SI 2010 No. 13) made under section 3(3) of the Mutual Legal Assistance (Tax Matters) Act, 2003. It applies Part 1 of that Act to a set of international tax information exchange and double taxation agreements reproduced in the Schedule, giving those agreements domestic legal effect in the BVI. The text reproduced includes the UK Virgin Islands exchange of information agreement (with an accompanying side agreement on avoidance of double taxation for pensioners, government servants and students) and a Sweden BVI agreement for the exchange of information relating to tax matters, plus other instruments listed in the Schedule.

• Effect of the Order: Brings the scheduled agreements within the operation of Part 1 of the Mutual Legal Assistance (Tax Matters) Act, 2003, so that their exchange of information mechanisms apply as a matter of BVI law.
• Scope of exchange: The agreements require the competent authorities (Her Majesty's Revenue and Customs and the BVI Financial Secretary, or Sweden's equivalent) to exchange information foreseeably relevant to tax administration, assessment, enforcement, recovery or investigation of tax matters, including bank, ownership, trust and foundation information.
• Limits on exchange: No obligation to obtain or provide ownership information on publicly traded companies or public collective investment schemes, information more than six years old relative to the tax period, or information held by a third party not directly relating to the taxpayer.
• Confidentiality: Information exchanged must be treated as confidential in the manner set out in the agreements.

The Order itself does not impose day-to-day compliance duties on licensees comparable to a typical regulatory circular; instead it operationalises international tax cooperation. In practice, banks, financial institutions, trustees, nominees, and companies or partnerships holding relevant ownership or account information can be required to produce that information to the BVI competent authority when a valid request is made under one of the scheduled agreements.

Key obligations

• Each party must ensure its competent authority has the power to obtain and provide, upon a valid request under the scheduled agreements, information held by banks, other financial institutions, and persons (including nominees and trustees) acting in an agency or fiduciary capacity.
• Each party must ensure its competent authority can obtain and provide ownership information on companies, partnerships and other persons (including settlors, trustees, beneficiaries and protectors of trusts, and founders, council members and beneficiaries of foundations) when requested under the scheduled agreements.
• Information exchanged under the agreements must be treated as confidential as provided in the agreements.
• A party wishing to terminate a scheduled agreement must give written notice through diplomatic channels at least six months before the end of a calendar year.

Applies to

banks, other financial institutions, trust companies and trustees, nominees, companies, partnerships, collective investment schemes

Deadlines

• thirtieth day after the later of the parties' notifications: Entry into force of the Sweden BVI exchange of information agreement, once each party notifies the other of completion of domestic procedures.
• at least six months before the end of any calendar year: Notice period required for a party to terminate the Sweden BVI agreement (and similarly structured termination provisions in other scheduled agreements).
• within three years of first notification of the contested action: Time limit for an enterprise to present a case to its competent authority under the mutual agreement procedure in the double taxation related agreement.

Related documents

• This document is made under Mutual Legal Assistance (Tax Matters) Act, 2003 (No. 18 of 2003)