The Government of the Virgin Islands has announced the launch of a private sector consultation on the impact of country-by-country reporting as part of ongoing initiatives currently being undertaken by the Organisation for Economic Cooperation and Development (OECD) to update the international tax system.
Country by country reporting is a key element of the Base Erosion and Profit Shifting (BEPS) initiative and if implemented, would require multi-national enterprises incorporated in the BVI with annual group revenues of €750m or more to file a detailed return annually with the Territory’s tax authorities. In addition, these reports would be automatically shared between countries which have signed the BEPS initiative to provide greater transparency on the tax affairs of companies operating across borders.
This consultation seeks to further develop our understanding of the impact of Country-by-Country reporting in BVI and assess how the Territory’s private sector defines economic substance providing BVI Government with greater clarity on the future opportunities this may create for the Territory.
As part of the consultation, the BVI Government is also asking for views on the issue of economic substance which aims to align the amount of organisational and economic activity undertaken by a multinational corporation with the taxable profits declared in each jurisdiction in which it operates.
Interim Director of BVI Finance, Mrs. Lorna Smith, OBE said, “We recognise the importance of international collaboration between jurisdictions to ensure that the global tax system remains robust and effective and we welcome the OECD’s work in this area.
“We pride ourselves on our track record of engaging stakeholders in the private sector and to ensuring that our regulatory framework is fully supportive their needs. We look forward to receiving responses to our consultation and to further progressing our work on this important international initiative.”
The BVI Government’s consultation document can be viewed on the BVI Finance website via this link www.bvifinance.vg. Responses are requested by 16th September 2016.