CbCR Competent Authority Agreement between the Isle of Man and the British Virgin Islands

Summary

This is a bilateral Competent Authority Agreement between the British Virgin Islands (represented by the International Tax Authority) and the Isle of Man, establishing the mechanism for automatic annual exchange of Country-by-Country (CbC) Reports on multinational enterprise (MNE) groups. It operates under Paragraph 8 of the existing BVI-Isle of Man Tax Information Exchange Agreement (TIEA) and follows the OECD/G20 BEPS Action 13 standard for CbC reporting.

• Scope: Covers CbC Reports filed by Reporting Entities of MNE Groups that are tax resident in the BVI, where one or more Constituent Entities of that group are resident or have a taxable permanent establishment in the Isle of Man.
• Exchange mechanism: The BVI Competent Authority (ITA) will automatically send the relevant CbC Reports to the Isle of Man Competent Authority (Assessor of Income Tax) each year, using a common XML schema and agreed electronic transmission methods.
• Timing: The first exchange applies to MNE Group fiscal years commencing on or after 1 January 2016, to be sent as soon as possible and no later than 18 months after the fiscal year end; subsequent years' reports must be exchanged no later than 15 months after the fiscal year end.
• Compliance cooperation: The Isle of Man authority must notify the BVI ITA of suspected errors or non-compliance by a BVI-resident Reporting Entity, and the ITA must take appropriate domestic measures to address this.
• Confidentiality and use limits: Exchanged information is subject to TIEA confidentiality rules and may only be used for high-level transfer pricing and BEPS risk assessment or statistical purposes, not as sole basis for transfer pricing adjustments.
• Suspension and termination: Either Competent Authority may suspend exchange for significant non-compliance (after consultation) or terminate the Agreement on 12 months' written notice; the Agreement only takes effect once the BVI notifies it has the necessary domestic legislation requiring CbC filing.

This is an intergovernmental exchange agreement rather than a direct compliance instrument for private entities; underlying CbC filing obligations for MNE groups arise from BVI domestic law, and this Agreement governs how the ITA shares data received from BVI-resident Reporting Entities with the Isle of Man tax authority.

Key obligations

• The BVI Competent Authority (ITA) must annually and automatically exchange CbC Reports received from BVI-resident Reporting Entities with the Isle of Man Competent Authority where a Constituent Entity is resident or has a permanent establishment in the Isle of Man.
• The first CbC Report exchange (for MNE fiscal years commencing on or after 1 January 2016) must occur no later than 18 months after the last day of the relevant fiscal year.
• CbC Reports for subsequent fiscal years must be exchanged no later than 15 months after the last day of the relevant fiscal year.
• The BVI ITA must specify the currency of amounts in exchanged CbC Reports and use the agreed common XML schema and electronic transmission methods.
• On receiving notice from the Isle of Man authority of suspected errors or non-compliance by a Reporting Entity, the ITA must take all appropriate measures available under BVI domestic law to address the issue.
• Information exchanged must be kept confidential and used only for permitted purposes (transfer pricing risk assessment, BEPS risk assessment, economic/statistical analysis), not as sole basis for transfer pricing adjustments.
• Either Competent Authority must consult the other before determining systemic failure or significant non-compliance, and must give 12 months' written notice to terminate the Agreement.

Applies to

Multinational Enterprise (MNE) Groups, Reporting Entities (Constituent Entities that file CbC Reports on behalf of an MNE Group), BVI Competent Authority (International Tax Authority), Isle of Man Competent Authority (Assessor of Income Tax)

Deadlines

• fiscal years of MNE Groups commencing on or after 1 January 2016: First BVI CbC Report exchange applies to these fiscal years
• no later than 18 months after the last day of the relevant fiscal year: Deadline for exchanging the first CbC Report under this Agreement
• no later than 15 months after the last day of the relevant fiscal year: Deadline for exchanging CbC Reports for subsequent fiscal years
• 12 months after notice of termination: Termination of the Agreement becomes effective on the first day of the month following expiry of this 12 month period