CRS 2.0 and CARF (2025-10-23)

Summary

This is a notice from the BVI International Tax Authority (ITA) informing Financial Institutions of forthcoming changes to the Common Reporting Standard (CRS), referred to as CRS 2.0, and of the Virgin Islands' commitment to implement the Crypto-Asset Reporting Framework (CARF). It sets out the timeline and the substantive changes Financial Institutions will need to prepare for.

• Digital products included: The definition of financial accounts is expanded to cover specific electronic money products and Central Bank Digital Currencies (CBDCs).
• Financial assets expanded: The definition of financial assets now includes crypto assets held in custody, derivatives, and other indirect crypto asset investments.
• Due diligence enhanced: Financial institutions must validate self certifications for both account holders and controlling persons.
• Reporting entities clarified: Depository institutions now include e-money providers not previously covered, and depository accounts are updated to cover e-money and CBDC holdings.
• Other CRS/Commentary changes: Includes expanded reporting on account holders and controlling persons, reliance on AML/KYC for determining controlling persons, exceptional due diligence where no valid self-certification exists, treatment of certain capital contribution accounts as Excluded Accounts, and a Non-Reporting Financial Institution category for genuine charities.

The notice also flags that the Virgin Islands has committed to implementing CARF, with a different, later timeline (exchanges beginning in 2028), and asks relevant entities to start assessing CARF's applicability to their business.

Key obligations

• Financial Institutions must collect the new CRS 2.0 information required under the amended standard by the end of 2026.
• Financial Institutions must submit the CRS 2.0 information collected to the International Tax Authority by May 2027.
• Financial Institutions must validate self-certifications for account holders and controlling persons as part of enhanced due diligence.
• Financial Institutions must familiarize themselves with the CRS 2.0 amendments to ensure they can report in line with the new timelines.
• Relevant entities are asked to begin assessing the applicability of CARF to their operations ahead of the 2028 exchange commitment.

Applies to

Financial Institutions, depository institutions, e-money providers

Deadlines

• 1 January 2026: Intended effective date for the Virgin Islands' introduction of CRS 2.0.
• end of 2026: Deadline by which Financial Institutions must have collected the new information required under CRS 2.0.
• May 2027: Deadline for Financial Institutions to submit CRS 2.0 information to the International Tax Authority.
• 2028: Timeline for the Virgin Islands' commitment to CARF information exchanges.