Further to our previous updates, the British Virgin Islands ("BVI") International Tax Authority ("ITA"), on 19 February 2019, published guidance notes on the Country-by-Country Reporting ("CbCR") requirements of entities that are resident in the BVI ("CbCR Guidance Notes") and updated guidance notes on the OECD's Common Reporting Standard ("CRS").
CbCR Guidance Notes
The CbCR Guidance Notes are intended to aid businesses that may have responsibilities to report information for CbCR. The CbCR Guidance Notes set out key information on the notification and / or reporting requirements of Constituent Entities of an MNE Group and address a number of other technical issues. Although we highlight certain matters, this update is not exhaustive and its purpose is primarily for prompting consideration as to the applicability of the CbCR rules to BVI entities and the steps that will need to be taken by Constituent Entities.
Every entity that is resident in the BVI must determine whether or not it is a Constituent Entity of an MNE Group, and if it is, must (i) register individually with the ITA; (ii) appoint a Primary User (see below); and (iii) identify the Reporting Entity of its MNE Group (which may be itself).
The ITA has confirmed that the registration of all Constituent Entities must be done through the BVI Financial Account Reporting System ("BVIFARS") which is in the process of being updated to accommodate CbCR. In the interim, all registrations are to be submitted via email to the ITA in the manner set out in the CbCR Guidance Notes. As part of the registration process each Constituent Entity must appoint a Primary User to be the link between the ITA and the Constituent Entity.
For a Constituent Entity of an MNE group with a fiscal year ended on or before 30 April 2019, registration must take place no later than 30 April 2019. For all other Constituent Entities, where the fiscal year of the MNE Group ends on or after 1 May 2019, registration must take place no later than the last day of that fiscal year.
A Reporting Entity of an MNE Group that is resident in the BVI must file a CbCR Report with the ITA even if it has similar reporting obligations in another jurisdiction. BVI CbCR Reports will be required to be filed for all accounting periods commencing on or after 1 January 2018. The CbCR Report shall be filed no later than 12 months after the last day of the fiscal year of the MNE Group. For example, if the fiscal year commenced on 1 January 2018 a CbCR Report must be filed by no later than 31 December 2019.
The Maples Group can assist with the registration process, including liaising with the ITA as applicable, acting as Primary User and with the preparation and filing of CbCR reports that are compliant with applicable legal requirements.
Updated CRS Guidance Notes
The updated CRS Guidance Notes have clarified, among others, the following:
- All existing FIs, i.e. those in existence as at 17 September 2018, are required to have registered with the ITA by 30 April 2019, unless they have previously registered with the ITA through the BVIFARS. The registration deadline for Non-Reporting FIs only has been extended to 28 June 2019. The Maples Group can assist with all aspects of the registration process, including liaising with the ITA as applicable.
- FIs will not be considered to be in breach of the requirement to establish, implement and maintain written policies and procedures provided that such policies and procedures are in place by 31 March 2019. The Maples Group can provide a comprehensive manual that meets this requirement as well as ancillary documentation, i.e. director resolutions, reflecting whether an entity has delegated all, some or none of its CRS obligations to a third party.
Should you have any questions or would like to discuss the above, please contact any of the contributors or your usual Maples Group contact.