Mutual Legal Assistance (Tax Matters) (No. 2) Order, 2014

Summary

This Order brings into force, under the Mutual Legal Assistance (Tax Matters) Act 2003, a bilateral Tax Information Exchange Agreement (TIEA) between the Government of the British Virgin Islands and the Government of Japan. It applies Part I of the Act to the Agreement set out in the Schedule, giving the BVI competent authority (the Financial Secretary or a delegate) legal power to obtain and exchange tax-relevant information with Japan's competent authority (the Minister of Finance or delegate).

• Scope of exchange: Covers information foreseeably relevant to determination, assessment, collection, recovery or enforcement of taxes, and to investigation or prosecution of tax matters, for taxes of every kind imposed on behalf of a Contracting Party (excluding local/political subdivision taxes).
• Who can be required to provide information: Information held by banks, other financial institutions, and persons acting in an agency or fiduciary capacity (including nominees and trustees), plus ownership information on companies, partnerships, trusts and foundations (settlors, trustees, beneficiaries; founders, council members, beneficiaries).
• Competent authority response timelines: The Requested Party's competent authority must confirm receipt and flag deficiencies within 60 days of receiving a request, and must inform the Requesting Party if it cannot obtain/provide information within 90 days.
• Confidentiality: Information exchanged must be kept confidential, used only for purposes in Article 1, disclosed only to specified persons/authorities, and not shared with non-Contracting Parties.
• Grounds to decline a request: A request may be declined if it does not conform to the Agreement, if the Requesting Party has not exhausted domestic means (absent disproportionate difficulty), or if disclosure would be contrary to public policy.
• Entry into force and termination: The Agreement enters into force 30 days after the later of the two Contracting Parties' diplomatic notifications confirming completion of internal procedures; it may be terminated by either party with at least six months' written notice before the end of a calendar year, but only after three years from entry into force.

The Order itself does not create direct compliance filing obligations for private BVI entities; instead it operationalises a government-to-government information exchange mechanism. However, banks, trust companies, and other entities holding client or ownership information may be compelled, through the BVI competent authority acting under domestic law, to produce records in response to a valid Japanese request.

Key obligations

• The BVI competent authority must confirm receipt of an information request and notify Japan's competent authority of any deficiencies within 60 days of receipt.
• The BVI competent authority must inform Japan's competent authority, with reasons, if it is unable to obtain and provide requested information within 90 days of receipt.
• Information exchanged under the Agreement must be kept confidential and used only for the tax administration/enforcement purposes specified in Article 1, and not disclosed to non-Contracting Parties.
• If specifically requested, the Requested Party's competent authority must provide information in the form of authenticated copies of original records.
• Either Contracting Party wishing to terminate the Agreement must give written notice through diplomatic channels at least six months before the end of a calendar year, and only after three years from entry into force.

Applies to

banks, other financial institutions, persons acting in an agency or fiduciary capacity (nominees and trustees), companies, partnerships, trusts, foundations

Deadlines

• 60 days of receipt of the request: Requested Party's competent authority must confirm receipt and notify of any deficiencies in the request
• 90 days of receipt of the request: Requested Party's competent authority must inform the Requesting Party if unable to obtain and provide the requested information
• 30 days after the latter of the diplomatic notifications: Date on which the Agreement enters into force
• at least six months before the end of any calendar year, after expiry of three years from entry into force: Minimum notice period required for a Contracting Party to terminate the Agreement