Mutual Legal Assistance (Tax Matters) Order, 2010

Summary

This Order brings Part 1 of the Mutual Legal Assistance (Tax Matters) Act, 2003 into effect in relation to a set of Tax Information Exchange Agreements (TIEAs) between the Government of the Virgin Islands and other governments, which are reproduced in the Schedule. The excerpted text shows agreements with Denmark and Finland, but the Schedule may contain further agreements not visible in this extract. The Order itself is a short operative instrument; the substantive rules are contained in the scheduled agreements.

• Purpose: Applies the mutual legal assistance framework in the 2003 Act to the specific bilateral tax information exchange agreements listed in the Schedule.
• Scope of exchange: Requires the competent authorities (in BVI, the Financial Secretary or delegate) to exchange information foreseeably relevant to the administration, enforcement, assessment, investigation or prosecution of the other party's tax laws.
• Access to information: Competent authorities must be able to obtain and provide information held by banks, other financial institutions, nominees, trustees and persons acting in a fiduciary capacity, as well as beneficial ownership information for companies, partnerships, trusts and foundations.
• Limits and safeguards: Exchange obligations exclude information older than six years before the relevant tax period, legally privileged communications, and certain trade or professional secrets; requests may be declined if not made in conformity with the agreement or if contrary to public policy.
• Confidentiality: Information received must be kept confidential, used only for the purposes specified in the agreement, and not disclosed to any other jurisdiction without consent.
• Timeframes for requests: The requested competent authority must confirm receipt and notify any deficiencies within 60 days, and must inform the requesting authority if information cannot be provided within 90 days.

Because this instrument operates at the level of government-to-government tax cooperation, its direct legal obligations fall on the competent authorities of the Virgin Islands and its treaty partners rather than on private businesses; however, banks, trust companies, and other entities holding client or ownership information may be compelled to produce it in response to a valid exchange request under the scheduled agreements.

Key obligations

• The competent authority of the Requested Party must confirm receipt of an information request and notify the Requesting Party of any deficiencies within 60 days of receipt.
• The competent authority of the Requested Party must inform the Requesting Party in writing if it has been unable to obtain and provide the requested information within 90 days of receipt, explaining the reasons or obstacles.
• Each Contracting Party must ensure its competent authority has 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, trusts and foundations.
• Information exchanged under the agreements must be kept confidential and used only for the purposes specified, and not disclosed to any other jurisdiction without consent.
• Requesting authorities must provide specified supporting details (identity of person under examination, period, nature of information sought, tax purpose, grounds for belief information is held in the Requested Party's territory, etc.) when making a request.

Applies to

banks, other financial institutions, trustees and persons acting in a fiduciary capacity, companies, partnerships, trusts, foundations, competent tax authorities

Deadlines

• 60 days of receipt of the request: Requested Party's competent authority must confirm receipt and notify any deficiencies in the request.
• 90 days of receipt of the request: Requested Party's competent authority must notify the Requesting Party if it has been unable to obtain and provide the requested information, or if obstacles or refusal arise.
• thirtieth day after later notification: Entry into force of the scheduled Agreement (e.g. the Finland agreement) occurs 30 days after both parties notify completion of internal legal procedures.
• within three years of first notification of the contrary action: An enterprise must present its case to the competent authority under the mutual agreement procedure within this period.
• at least six months before the end of any calendar year: Notice period required for a Party to terminate a scheduled Agreement.