Unofficial Consolidation of the Mutual Legal Assistance (Tax Matters) Act, 2003

Summary

This is the BVI International Tax Authority's unofficial consolidation of the Mutual Legal Assistance (Tax Matters) Act, 2003, as amended through 2018. It is the core BVI statute implementing international tax information exchange regimes: the US-UK/BVI tax information exchange agreement, the EU Savings Directive, the Common Reporting Standard (CRS), and Country-by-Country (CbC) reporting under BEPS Action 13.

• Part I - Tax Information Exchange: Gives the Financial Secretary (the Authority) power to compel any person or entity holding relevant information to produce it on notice, apply for search warrants, and conduct interviews/tax examinations pursuant to information exchange requests; imposes confidentiality obligations on anyone aware of a request.
• Section 5A record-keeping: Requires every BVI company to keep records and underlying documentation (at its registered agent's office or elsewhere) sufficient to explain its transactions and determine its financial position, retained for at least five years, with notification obligations if records are kept or moved elsewhere.
• Part II - EU Savings Income: Implements the EU Council Directive on taxation of savings income, covering identity and residence of beneficial owners, withholding tax, exchange of information, and confidentiality.
• Part III - Common Reporting Standard: Requires Virgin Islands Financial Institutions to establish CRS policies and procedures, apply the CRS to identify reportable accounts, register with the Authority, file annual CRS returns in the prescribed form, and permits appointment of third-party service providers; sets compliance and anti-avoidance measures.
• Part IV - Country-by-Country Reporting: Requires in-scope multinational group entities to register with the Authority and file Country-by-Country reports within specified time limits, and governs use and confidentiality of that information.
• Offences and penalties: Failure to comply with notices, orders, registration or filing obligations, or breach of confidentiality, is an offence carrying fines up to five thousand dollars (summary) or one hundred thousand dollars (indictment) and imprisonment up to two or five years respectively; section 42 provides a general penalty.

The Act's schedules set out the underlying agreements (USA Agreement, EU Directive, CRS Competent Authority Agreement templates) and CRS-related detail such as non-reporting financial institutions, excluded accounts (including dormant account thresholds), and due diligence rules. As a consolidation, it reflects amendments through Act No. 8 of 2018 but is not itself the authoritative legal text.

Key obligations

• Every BVI company must keep records and underlying documentation sufficient to show and explain its transactions and determine its financial position, retained for at least five years from completion of the relevant transaction or termination of the business relationship.
• A company must notify its registered agent in writing of the physical address where records are kept if not kept at the registered agent's office, and notify any change of location within fourteen days.
• Persons issued a notice under section 5 must provide the specified information within the time, form and verification manner required by the Authority.
• Virgin Islands Financial Institutions must establish and maintain policies and procedures to comply with the Common Reporting Standard.
• Virgin Islands Financial Institutions must register with the Authority for CRS purposes and file an annual CRS return in the prescribed form.
• Persons notified of, or involved in responding to, a mutual legal assistance request must keep the request and related information confidential.
• In-scope multinational entities must register with the Authority and file Country-by-Country reports within the time for filing specified under the Act.
• A company must comply with any Order made by the Minister under section 3A specifying information, manner and deadlines for provision to the Authority.

Applies to

BVI companies (including foreign companies), Virgin Islands Financial Institutions, Financial institutions subject to the Common Reporting Standard, Multinational enterprise group entities subject to Country-by-Country reporting, Persons or entities holding information relevant to a tax information exchange request

Deadlines

• within fourteen days of the change of location: A company must notify its registered agent of a new location for records and underlying documentation.
• at least five years: Minimum retention period for a company's records and underlying documentation, from completion of the transaction or termination of the business relationship.
• such time as is specified in the notice: Deadline for providing information requested by the Authority under section 5.
• time for filing as specified under Part IV (section 40): Deadline for filing Country-by-Country reports.