Mutual Legal Assistance (Tax Matters) (Amendment) Act, 2025 (No. 18 of 2025)

Summary

This Act amends the Mutual Legal Assistance (Tax Matters) Act, Revised Edition 2020, which underpins the BVI's CRS and FATCA reporting regime. It clarifies which financial institutions have notification duties, broadens the offences that can be charged against a Reporting Virgin Islands Financial Institution, and creates a mechanism to hold specific individuals liable when the reporting entity is a legal arrangement such as a limited partnership or trust.

• Notification wording clarified: Section 13(10) now refers specifically to a Reporting Virgin Islands Financial Institution rather than any Virgin Islands Financial Institution, narrowing who has the notification obligation.
• Expanded offences (section 19): Section 19 is repealed and replaced to broaden the conduct that constitutes an offence by a Reporting Virgin Islands Financial Institution, including failing to comply with Competent Authority requirements, failing to report, making false or negligent reports, failing to implement compliance arrangements, destroying or hiding records, obstructing inquiries, and filing inaccurate or incomplete reports; penalties include fines up to five thousand dollars and up to two years imprisonment for certain offences.
• New liability rule for legal arrangements (section 19A): Where a Reporting Virgin Islands Financial Institution that is a limited partnership or trust commits an offence, liability falls on a defined liable person: the limited partnership and its general partners, the general partners alone if there is no legal personality, or the trustee, and any de facto decision maker.
• Penalty for inaccurate VI FI returns (section 29(6)): A Virgin Islands Financial Institution that files an inaccurate or incomplete return commits an offence, punishable by a fine of up to one hundred thousand dollars, up to two years imprisonment, or both, where the inaccuracy is deliberate, due to lack of reasonable care, or discovered later without reasonable corrective steps.
• Broadened false information offence (section 42(1A)): The offence for providing false, inaccurate, incomplete or incorrect information to the Competent Authority is widened to cover wilful, knowing, fraudulent, reckless or negligent conduct, and extends to a person who discovers such information but fails, without reasonable excuse, to notify the Competent Authority as soon as practicable.
• General penalty for legal arrangements (section 42(3) and (4)): Where an obligation under the Act or the Agreement falls on a limited partnership or trust and no specific penalty exists, failure to comply is now an offence, with liable persons (general partners, trustees, or de facto decision makers) facing summary or indictable penalties, the latter up to one hundred thousand dollars or five years imprisonment.
• Schedule and cross-reference corrections: Sections 21, 23, 33 and Schedule 2 are amended to correct schedule numbering references following earlier renumbering under Amendment No. 4 of 2022.

Overall the amendments increase the range of conduct that can trigger penalties under the CRS/FATCA mutual legal assistance framework and, for the first time, expressly identify the individuals who bear personal liability when a reporting entity is structured as a limited partnership or trust.

Key obligations

• Reporting Virgin Islands Financial Institutions must comply with Competent Authority requirements under section 15 and make required reports without false, negligent, or incomplete information, or face fines up to five thousand dollars and up to two years imprisonment.
• Reporting Virgin Islands Financial Institutions must implement and maintain arrangements or procedures to comply with reporting obligations under Part II.
• Virgin Islands Financial Institutions must ensure returns filed under section 29 are accurate and complete, or face fines up to one hundred thousand dollars, imprisonment up to two years, or both.
• Any person who discovers that false, inaccurate, incomplete or incorrect information was provided to the Competent Authority must notify the Competent Authority as soon as practicable, or commit an offence under section 42.
• General partners of a limited partnership or a trustee of a trust that is a Reporting Virgin Islands Financial Institution (or otherwise subject to an obligation under the Act) may be held personally liable for failures to comply with reporting obligations.

Applies to

Reporting Virgin Islands Financial Institutions, Virgin Islands Financial Institutions, limited partnerships, trusts, trustees, general partners

Deadlines

• as soon as practicable after discovery: A person who discovers false, inaccurate, incomplete or incorrect information provided to the Competent Authority must notify the Competent Authority as soon as practicable after making the discovery, or commit an offence under amended section 42(1A).