Mutual Legal Assistance (Tax Matters) (Amendment) Act, 2022 (No. 4 of 2022)

Summary

This Act amends the Mutual Legal Assistance (Tax Matters) Act, Revised Edition 2020, to modernise the British Virgin Islands' framework for international tax information exchange, including CRS, FATCA (Model 1 IGA with the US) and Country-by-Country Reporting (BEPS Action 13). It transfers key functions previously held by the Financial Secretary to the International Tax Authority (ITA), rewrites Part II (FATCA) and updates Parts III (CRS) and IV (CbC Reporting), and revises rules on service of documents, requests for information, and penalties.

• Authority replaces Financial Secretary: The International Tax Authority becomes the competent authority for exchange of information, FATCA, CRS and CbC reporting matters, replacing references to the Financial Secretary.
• Information requests: The Authority may require any person or entity (including nominees, trustees, agents) reasonably believed to hold relevant information to provide it, and may conduct interviews or examinations directly, not only through a Representative.
• Service of documents: Section 10 is replaced and a new section 10A inserted setting out detailed rules for serving notices/documents on companies, bodies corporate, limited partnerships and individuals, and for serving overseas documents in the Virgin Islands, including affidavit-of-service proof.
• FATCA (Part II) rewritten: New sections 11 to 20 restate definitions and impose obligations on Reporting Virgin Islands Financial Institutions to establish and maintain compliance arrangements, meet registration requirements, appoint third parties where relevant, apply compliance measures, report to the Authority, and address avoidance/circumvention, with associated penalties and ITA guidance powers.
• CRS (Part III) amendments: Section 22 designates the ITA as competent authority for CRS; section 27 sets out required policies and procedures for Reporting Financial Institutions; section 29 addresses filing of returns and the offence of failing to file, with penalties added at section 32(6).
• Country-by-Country Reporting (Part IV) amendments: New definitions (including 'Resident for tax purposes in the Virgin Islands', 'Group' and 'Ultimate Parent Entity') are inserted, and section 37 requires a Surrogate Parent Entity to file a country-by-country report with the Competent Authority for the Reporting Fiscal Year of an MNE Group.
• Schedules restructured: Schedules 2 and 3 of the principal Act are repealed, and former Schedules 4, 5 and 6 are renumbered as Schedules 2, 3 and 4.

Overall the amendment consolidates the ITA's supervisory role across MLA, FATCA, CRS and CbC reporting regimes and tightens compliance, reporting and service-of-document mechanics, while leaving most substantive filing deadlines to be set under the amended provisions or subsidiary guidance rather than stated as fixed dates in this Act.

Key obligations

• Reporting Virgin Islands Financial Institutions must establish and maintain arrangements, policies and procedures to comply with FATCA obligations under the new Part II.
• Financial Institutions must meet registration requirements under the revised FATCA provisions (including obtaining a GIIN where applicable).
• Reporting Virgin Islands Financial Institutions must report required information to the Authority under the FATCA and CRS regimes.
• Reporting Financial Institutions must establish and maintain policies and procedures as required under amended section 27 (CRS).
• Persons or entities served with a notice under section 5 must provide information reasonably believed to be in their possession or control when required by the Authority.
• A person consenting to interview or examination must notify the Authority in writing of consent; the Authority may also conduct interviews or examinations directly.
• Reporting Financial Institutions must file returns as required under amended section 29(3); failure to file a return is an offence subject to penalty under section 32(6).
• A Surrogate Parent Entity must file a country-by-country report conforming to section 39 with the Competent Authority in respect of the Reporting Fiscal Year of its MNE Group.

Applies to

Reporting Virgin Islands Financial Institutions, Non-Reporting Virgin Islands Financial Institutions, NFFEs (Active and Passive), Reporting Financial Institutions under CRS, Multinational Enterprise (MNE) Groups, Surrogate Parent Entities, Ultimate Parent Entities, Companies, bodies corporate, associations of persons and limited partnerships subject to service of notices, Individuals subject to information requests or interviews under the Act, Trustees, nominees and persons acting in an agency or fiduciary capacity

Related documents

• This document amends Mutual Legal Assistance (Tax Matters) Act (Revised 2020)