Mutual Legal Assistance (Tax Matters) (No. 3) Order, 2014 (SI 2014 No. 64)

Summary

This Order gives domestic legal effect in the Virgin Islands to the OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters (as amended by the 2010 Protocol), commonly known as the MAAC. It applies Part 1 of the Mutual Legal Assistance (Tax Matters) Act, 2003 to the Convention text reproduced in the Schedule, and is deemed to have come into force on 1 March 2014.

The Convention itself is a government-to-government instrument: it obliges Virgin Islands authorities to provide administrative assistance in tax matters to other Convention Parties, and entitles the Virgin Islands to request similar assistance from them. It does not impose direct compliance obligations on private businesses, but it underpins cross-border tax information exchange, recovery assistance and service of documents that can affect any person or entity with tax affairs connected to another Convention Party.

• Exchange of information: Covers exchange on request, automatic exchange (where agreed), and spontaneous exchange of information foreseeably relevant to tax administration or enforcement (Articles 4 to 7).
• Tax examinations: Allows simultaneous tax examinations between Parties and permits representatives of another Party's tax authority to be present during examinations, subject to consent (Articles 8 and 9).
• Assistance in recovery: Requires the requested State to take steps to recover another Party's tax claims and to apply conservancy measures, subject to time limits and priority rules (Articles 11 to 16).
• Service of documents: Requires the requested State to serve tax related documents, including judicial decisions, originating from another Party (Article 17).
• Confidentiality and use of information: Restricts use and disclosure of information exchanged under the Convention to the persons and purposes specified in Article 22, subject to confidentiality safeguards.

Because the instrument operates between competent tax authorities, Virgin Islands entities are affected indirectly, mainly through increased likelihood of information about their tax affairs being requested from, or shared with, foreign tax authorities under this framework.

Key obligations

• The requested State (Virgin Islands authorities) must provide administrative assistance in tax matters to other Convention Parties, including exchange of information, recovery assistance and service of documents, as set out in the Convention text.
• A Party is not obliged to comply with a recovery assistance request submitted more than 15 years after the date of the original instrument permitting enforcement (Article 14.3).
• The requested State must inform the applicant State of the action taken and result of assistance, or the reasons for declining a request, as soon as possible after receiving it (Article 20).

Applies to

taxpayers and persons with tax matters connected to a Convention Party, Virgin Islands competent tax authority, foreign tax authorities of other Convention Parties

Deadlines

• 1st day of March 2014: Date on which the Order is deemed to have come into force, applying Part 1 of the Mutual Legal Assistance (Tax Matters) Act, 2003 to the Convention.
• 15 years from the date of the original instrument permitting enforcement: Outer limit after which the requested State is not obliged to comply with a request for recovery assistance (Article 14.3 of the Convention).

Related documents

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