BVI Updates FATCA Reporting Guidance

The British Virgin Islands has published revised guidance notes on the international tax compliance requirements under its intergovernmental agreements with the United States and the United Kingdom.

The original version, dating back to July 2014, has been updated to reflect subsequent developments. Attention is drawn to the revised deadline of June 30, 2015, (extended from May, 31, 2015) for financial institutions to report with respect to the 2014 reporting year under the US Foreign Account Tax Compliance Act (FATCA).

The Government also announced that the BVI Financial Account Reporting System (BVIFARS) will be available for use from April 15, 2015. As of that date, tax authorities will accept applications for enrollment from reporting financial institutions. Additional guidance on BVIFARS will be issued in due course.

FATCA, enacted by the US Congress in 2010, is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients, including bank and investment account ownership information, balances, and transfers, will result in a 30 percent withholding tax on US-source payments.

The UK has established a similar arrangement with its Crown Dependencies and Overseas Territories, commonly known as the “son of FATCA.”