Newhaven has developed a free online interactive tool to assist clients with the classification of their BVI entities AND subsequent filing and upload of the entity status into the BOSS System, seamlessly.

Now the Rules on Economic Substance in the Virgin Islands have been published we are pleased to make our easy to use and password-protected tool available to enable you to proceed with classification confident in the interpretations that will be applied to the Act and the BOSS Act by the BVI International Tax Authority.

You can access our classification solution HERE.

BACKGROUND

As you will no doubt be aware, the Economic Substance (Companies and Limited Partnerships) Act, 2018 (the Act) was introduced in the BVI, effective 1 January 2019, to address the concerns of the EU Code of Conduct Group and the OECD Forum on Harmful Tax Practices. Related amendments to the Beneficial Ownership Secure Search System Act, 2017 (the BOSS Act) implement an economic substance reporting regime.

The Act and the BOSS Act have been through various amendments, and the BVI International Tax Authority has now, on 9^th October 2019 published the Rules on Economic Substance in the Virgin Islands, which at last provide definitive guidance to the interpretation of the Act and the BOSS Act and stipulate how the ITA will carry out its obligations (the Rules). This development is greatly welcomed, as, after months of speculation, it is now possible to provide an indication of the appropriate action to be taken in respect of Economic Substance requirements for your portfolio of BVI companies.

All BVI entities will need to make a classification of their substance status and report their findings to their Registered Agent. As your Registered Agent, we are required to then report the relevant details via the BOSS system. It is important to note that a filing will need to be made in respect of ALL entities, notwithstanding a classification that no relevant activity is undertaken.

KEY DATES

The Act came into effect on 1 January 2019 and applies to:

1. all entities incorporated, formed or registered in the BVI on or after that date (New Entities) with effect from 1 January 2019; and
2. all entities existing before 1 January 2019 (Legacy Entities) with effect from 30 June 2019.

 
ACTION REQUIRED

You will need to establish the following in respect of ALL of your entities:

1. Whether the entity is carrying on relevant activity.
2. If so, whether the entity is resident for tax purposes in another jurisdiction (and whether or not that jurisdiction is “blacklisted” by the EU for tax purposes).
3. If It is subject to the economic substance requirements, what steps need to be taken to fulfill them and the action needed to meet the resultant reporting obligations.

You may also find further information and details in Rules on Economic Substance in the Virgin Islands
 

Newhaven is committed to assist you through the changes, and provide you with the best support and solutions that you may expect: 

QUESTIONS?

Your usual Client Service Executives at Newhaven are available to answer any queries which you may have, and should you need any assistance in determining the appropriate classification for your entity. You may also email [email protected] for enquiries relating to the BVI Economic Substance legislation.

REFERENCES:

Rules on Economic Substance in the Virgin Islands
Economic Substance (Companies & Limited Partnerships) (Amendment) Act, 2019
Economic Substance (Companies & Limited Partnerships) Act, 2018
Beneficial Ownership Secure Search System (Amendment)(No.2) Act, 2019
Beneficial Ownership Secure Search System Act, 2017