Mutual Legal Assistance (Tax Matters) Order, 2019 (SI 2019 No. 49)

Summary

This Order brings into force Part 1 of the Mutual Legal Assistance (Tax Matters) Act, 2003 in respect of a specific bilateral instrument: the 2009 Agreement between the British Virgin Islands and the Kingdom of the Netherlands (in respect of the Netherlands Antilles) for the exchange of tax information, together with its 2009 Protocol and 2012 Addendum, all reproduced in the Schedule. It does not create new domestic rules of its own; it simply activates the Act's machinery so that the Agreement's information exchange obligations become operative under BVI law.

The underlying Agreement obliges the BVI's and the Netherlands Antilles' competent authorities to exchange information, on request, that is foreseeably relevant to administering or enforcing each jurisdiction's tax laws, including for criminal tax matters. It requires each side to be able to obtain information held by banks, other financial institutions, nominees, trustees, and information on legal and beneficial ownership of companies, partnerships, trusts and foundations.

• Scope: Applies to income tax, wages/payroll tax, profit tax and property tax (and equivalents) in both territories, and to any substantially similar future taxes.
• Information access: Requested Party's competent authority must be able to obtain and provide bank, financial institution, nominee, trustee and beneficial ownership information (including on settlors, trustees, beneficiaries, protectors, founders and foundation council members).
• Response timelines: The Requested Party must confirm receipt and flag deficiencies within 60 days, and inform the Requesting Party if information cannot be obtained/provided within 90 days.
• Limits and refusals: Requests can be declined where not made in conformity with the Agreement, where all domestic means have not been exhausted, where disclosure would breach public policy, or where legal professional privilege applies (subject to exceptions for criminal purposes).
• Confidentiality: Information exchanged must be treated as confidential and disclosed only to specified persons or authorities.

Practically, this instrument operates at the level of government-to-government cooperation via the competent authorities (the Financial Secretary in the BVI), but it underpins the legal basis on which BVI banks, trust companies and other financial institutions may be required to produce client and ownership information in response to lawful tax information requests from the Netherlands Antilles.

Key obligations

• The BVI's competent authority must be able to obtain and provide, on request, information held by banks, other financial institutions, nominees and trustees, and beneficial ownership information for companies, partnerships, trusts and foundations
• The Requested Party's competent authority must confirm receipt of a request and notify any deficiencies within 60 days of receipt
• The Requested Party's competent authority must inform the Requesting Party in writing if it cannot obtain and provide requested information within 90 days of receipt, explaining the reason
• Information exchanged under the Agreement must be treated as confidential and disclosed only to authorised persons or authorities

Applies to

banks, other financial institutions, 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 the Requesting Party of 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