BVI issues updated FATCA Guidance Notes
The International Tax Authority (ITA) of the British Virgin Islands has recently announced the issue of Version 2.0 of the Guidance Notes on the International Tax Compliance Requirements of the Intergovernmental Agreements between the British Virgin Islands and the United States of America and the United Kingdom (IGAs). The initial version of the Guidance Notes was issued in July 2014. The update reflects a number of developments since issue of the first version. A copy of the updated Guidance Notes is available here, or from the BVI Government FATCA website.
Many of the changes which have been made are what might be described as tidy up amendments and/or changes to provide additional clarification. The more material points to note from the revised version are as follows:
The deadline for submission of information to the ITA with respect to the 2014 reporting year has been extended by one month from 31 May to 30 June 2015. The reporting deadline in subsequent years (2016 onwards) remains 31 May. (see Section 17.5 (Timetable for Reporting)).
An updated Section 17.12 providing more detail on the manner of transmission of information to the ITA. Reporting Financial Institutions and Sponsoring Entities are required to submit information to the ITA with respect to Specified US Persons electronically via a web-based application to be known as BVIFARS. The site is expected to go live for enrolment on or around 15 April. Each Financial Institution and Sponsoring Entity will have one primary user and up to four secondary users. The format for reporting under the UK IGA is yet to be finalised (the first reports not being due until 31 May 2016).
An updated Section 3.3.6 dealing with Limited Life Debt Investment Entities.
A new category of Exempt Beneficial Owner known as Limited Capacity Exempt Beneficial Owners (Section 5.4). This reflects the addition made to Annex II to the UK IGA which removes the need to “look through” charities to their Controlling Persons.
An updated Section 8.2 providing further guidance on Securitisation and structured finance vehicles.
An updated Section 10.18.1 which provides a reminder that the reporting obligations continue to apply to a company which has been struck off the Register of Companies.
The deadline for a Reporting Financial Institution to submit an election to the ITA to confirm that it is offering the Alternative Reporting Regime (ARR) to Resident Non-Domiciled individuals (RND) under the UK IGA remains 31 May following the end of the first tax year. Financial Institutions who wish to offer the ARR with respect to the 2014 tax year must make the election by 31 May 2015 even though the first deadline for reporting under the UK IGA is not until 31 May 2016.
The Guidance Notes also refer to a further Order under section 3A of the Mutual Legal Assistance (Tax Matters) Act, 2003 which is to be issued by the Minister of Finance. Amongst other matters, the Order is expected to provide for specific offences for breach of the reporting requirements and to formally set the reporting deadlines in a manner consistent with the updated Guidance Notes.
