Mutual Legal Assistance (Tax Matters) (No. 5) Order, 2010

Summary

This Order brings into force, under the Mutual Legal Assistance (Tax Matters) Act, 2003, a Tax Information Exchange Agreement (TIEA) between the British Virgin Islands and the Portuguese Republic (with the Schedule text also including provisions relating to an agreement with Germany). It does not itself regulate BVI businesses directly; rather it authorises the BVI's competent authority (the Financial Secretary) to exchange tax information with Portugal's and Germany's tax authorities under Part 1 of the Act.

• Scope of exchange: Competent authorities must provide information upon request that is foreseeably relevant to the administration, assessment, collection or enforcement of covered taxes, including criminal tax matters.
• Information sources: The BVI's competent authority must have the legal authority to obtain and provide information held by banks, other financial institutions, and persons acting as nominees, trustees, or in other fiduciary capacities, as well as beneficial ownership information for companies, partnerships, trusts, foundations and collective investment vehicles.
• Confidentiality: Information exchanged is to be kept confidential, used only for the purposes specified in the Agreement, and not passed on to any other jurisdiction without consent.
• Grounds to decline: The Requested Party may decline requests that are not properly formulated, where domestic remedies have not been exhausted, or where disclosure would breach public policy, legal privilege, or protected trade secrets.
• Costs: Ordinary costs of responding to a request are borne by the Requested Party; extraordinary costs (e.g. third-party research, translation, litigation) are borne by the Requesting Party, with consultation required if extraordinary costs are expected to exceed US$500.

For BVI compliance purposes, the practical effect is that banks, trust companies, company service providers, and other entities holding client or beneficial ownership records may be required to produce information to the BVI Financial Secretary when a valid request is made by Portugal (or Germany) under this Agreement, subject to the safeguards and exceptions set out above.

Key obligations

• The BVI competent authority (Financial Secretary or delegate) must exchange information with Portugal's (and Germany's) competent authority upon a properly formulated request concerning covered taxes.
• The BVI competent authority must be able to obtain and provide, upon request, information held by banks, financial institutions, nominees, trustees, and beneficial ownership information for companies, trusts, foundations and collective investment schemes.
• Information received or provided must be kept confidential and used only for the purposes set out in Article 1, and not disclosed to any other jurisdiction.
• The Requested Party must acknowledge receipt of a request and use best endeavours to forward the requested information with the least reasonable delay.
• The competent authorities must consult where extraordinary costs of responding to a request are expected to exceed US$500.

Applies to

banks, other financial institutions, trust companies, company service providers acting as nominees or fiduciaries, collective investment funds or schemes, foundations