Income Tax Ordinance (CAP. 206)

Summary

This is the consolidated Income Tax Ordinance (Cap. 206) of the Virgin Islands, together with its subsidiary legislation. It sets out the general framework for income tax in the Territory, including exemption orders, PAYE (Pay As You Earn) employment tax rules, and double taxation relief arrangements agreed with other governments (including Canada and the United States).

• PAYE and employer obligations: Employers must register with the Commissioner, deduct tax from employee remuneration using official Tax Tables, remit deductions monthly, and file annual returns; personal liability attaches to employers who fail to deduct or remit correctly.
• Employee obligations: Employees must furnish declarations on commencing or ceasing employment, attach tax certificates to their annual income tax returns, and notify the Commissioner if an employer fails to issue a required certificate.
• Exemption orders: Specific interest and income streams (e.g. interest on the BVI Electricity Corporation loan to non-residents) are exempted from income tax by ministerial order under section 10 of the Ordinance.
• Double taxation relief: Schedules give effect to arrangements with Canada and a Convention with the United States for relief from double taxation and prevention of fiscal evasion, covering permanent establishment rules, profit attribution, withholding rate caps, and termination/notice provisions for the treaties.

The document is a large consolidated statute combining the core Ordinance with multiple statutory instruments and international tax agreements; readers should identify which specific part (main Ordinance provisions, PAYE Rules, or a particular double taxation order) is relevant to their situation, as obligations and deadlines differ across these components.

Key obligations

• Every employer must register with the Commissioner within thirty days of becoming an employer (or within thirty days of the Rules coming into operation).
• Employers must notify the Commissioner within thirty days of any change of registered business address or of ceasing to be an employer.
• Employers must deduct tax from employee remuneration in accordance with the P.A.Y.E. Tax Tables issued by the Commissioner.
• Employers must remit tax deducted from employees' remuneration to the Commissioner by the fifteenth of the month following the month of deduction.
• Employers must furnish employees with an annual certificate of total remuneration and tax deducted within one month after the end of the calendar year (or on cessation of employment, or within one month of ceasing to be an employer).
• Employers must furnish a monthly return showing tax deducted and remitted, and an annual return within one month after the end of the calendar year (or within 15 days of ceasing to be an employer).
• Employers must maintain records of remuneration and tax deducted for each employee, available for examination by the Commissioner.
• Employees must furnish a declaration to the Commissioner on commencing or ceasing employment, and non-ordinarily-resident or temporarily resident employees must declare their expected duration of residence.
• Employees must attach tax certificates received from employers to their annual income tax return.
• An employee who does not receive a required certificate within the specified time must apply to the employer, and if not furnished within a further fifteen days must notify the Commissioner.

Applies to

employers, employees, taxpayers subject to Virgin Islands income tax, companies deriving income from the Virgin Islands or Canada/United States with cross-border tax relief claims

Deadlines

• within thirty days of becoming an employer: Employer must register with the Commissioner
• within thirty days of change of address or ceasing to be an employer: Employer must notify the Commissioner of the change
• the fifteenth of the month following the month of deduction: Prescribed date for employer to pay over tax deducted from employees' remuneration
• within one month after the end of the calendar year: Employer must furnish annual certificate to employees and annual return to the Commissioner
• within 15 days after cessation (if employer ceased during the year): Employer must furnish annual return to the Commissioner
• a further period of fifteen days after non-receipt of certificate: Employee must notify Commissioner if employer still has not furnished a required tax certificate