Mutual Legal Assistance (Tax Matters) (No. 5) 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 the Republic of Korea. It applies Part 1 of the Act to the Agreement set out in the Schedule, giving it domestic legal effect so that information exchange under the Agreement can be carried out and enforced in the BVI.

• Scope: Competent authorities of the BVI and Korea must exchange information that is foreseeably relevant to the administration, enforcement, investigation or prosecution of tax matters, including criminal tax matters.
• Taxes covered: For the BVI: income tax, payroll tax and property tax. For Korea: income tax, corporation tax, inheritance tax, gift tax, value added tax and individual consumption tax.
• Information access: Each Contracting Party's competent authority must be able to obtain and provide information held by banks, other financial institutions, nominees, trustees and agents, as well as legal and beneficial ownership information on companies, partnerships and trusts (including settlors, trustees, beneficiaries and protectors).
• Request handling timelines: The requested competent authority must confirm receipt of a request and notify any deficiencies within 60 days, and must inform the requesting authority if information cannot be provided within 90 days or if obstacles or refusal arise.
• Confidentiality: Information exchanged must be kept confidential, used only for the purposes stated in the Agreement, and not disclosed to any other jurisdiction.
• Costs: Ordinary administration costs are borne by the requested Party; extraordinary costs (e.g. third-party research, translation, litigation costs) are borne by the requesting Party, with consultation required where such costs are likely to exceed US$500.

The Order itself creates no new obligations on private persons beyond giving the Korea TIEA legal force in BVI law; the substantive obligations fall on the competent authorities (the BVI Financial Secretary or delegate, and Korea's Minister of Strategy and Finance) to exchange information, and correspondingly on banks, financial institutions, trustees, companies and other information holders who may be compelled to produce records to comply with a request.

Key obligations

• The BVI competent authority must exchange information with Korea's competent authority that is foreseeably relevant to tax administration, enforcement, investigation or prosecution, as requested under the Agreement.
• The BVI competent authority must have the legal authority to obtain and provide information held by banks, financial institutions, nominees, trustees, and information on legal and beneficial ownership of companies, partnerships and trusts.
• On receiving a request, the requested competent authority must confirm receipt in writing and notify any deficiencies within 60 days of receipt.
• If unable to obtain and provide requested information within 90 days of receipt, or if obstacles or refusal arise, the requested competent authority must immediately inform the requesting authority in writing with reasons.
• Information exchanged under the Agreement must be kept confidential, used only for purposes stated in Article 1, and not disclosed to any other jurisdiction.
• Parties must consult each other where extraordinary costs of responding to a request are likely to exceed US$500 before continuing to pursue the request.

Applies to

banks, financial institutions, trustees and persons acting in a fiduciary or agency capacity, companies, partnerships, trusts (settlors, trustees, beneficiaries, protectors)

Deadlines

• 60 days of receipt of the request: Requested Party's competent authority must confirm receipt and notify the requesting Party of any deficiencies in the request.
• 90 days of receipt of the request: If the requested Party has not obtained and provided the requested information within this period, it must inform the requesting Party in writing of the reasons for delay, obstacles, or refusal.
• 18th December 2014 (made) / gazetted 29th December 2014: Date the Order was made and gazetted, giving the Korea TIEA legal effect under BVI law.

Related documents

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