A Quick Recap on Economic Substance19th February 2020
As we have mentioned in our previous notifications, it is important for you to note that the BVI ES legislation differentiates between what are termed “legacy” companies (those incorporated prior to 2019) and “new” companies; that is to say, companies incorporated on or after 1 January 2019.
In respect of new companies, the financial period runs for 12-months from the date of incorporation while for legacy companies, the financial period runs for 12-months from 30 June 2019.
Have you classified for your entity yet?
If the entity is, by reason of carrying on relevant activities, in scope, its the obligation to fulfil the necessary economic substance obligations relates to the current 12-month financial period. Therefore there is an immediate need to classify your entity now! Failure to do so could result in an inability to satisfy applicable economic substance requirements leading to substantial fines and penalties.
BVI Economic Substance Developments
On 10 February, 2020, the BVI International Tax Authority (“ITA”), has issued and published a second revision of the Rules under the Economic Substance (Companies and Limited Partnership) Act , 2018 (the “Act”). We are currently reviewing and will provide our clients with an update shortly.
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 us for enquires relating to the BVI Economic Substance legislation.