BVI entities must now submit CRS and FATCA reports through online portal

Monday, 29 January 2024
As of January 2024, all British Virgin Islands (BVI) entities with reporting obligations under the US Foreign Account Tax Compliance Act (FATCA), the OECD Common Reporting Standard (CRS) and the OECD country-by-country (CbC) reporting rules must submit their reports through the BVI Financial Accounting Reporting System (BVIFARS).
BVI_flag

The new procedure results from the recommendations of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum). Although the BVI's legislation regarding automatic exchange of information (AEOI) has for several years complied with the Global Forum's technical requirements, the OECD reported in 2022 that the BVI's actual performance in AEOI was only partially compliant with its standards. There were, it said, 'significant issues with respect to ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures.' The Global Forum duly required the BVI to 'ensure effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures to ensure the effective implementation of the CRS.'

The BVI government pointed to the significant impact of Hurricanes Irma and Maria, followed by the global COVID-19 pandemic, on its ability to exchange the required information. It therefore requested a supplementary review. This was granted and an on-site visit by the OECD is due to take place in the first quarter of 2024 to ensure that the BVI has complied with this and other conditions.

Accordingly, BVIFARS went live earlier in January 2024 for relevant submissions. Each reporting entity will have to pay an annual fee of USD185 to use the portal to submit FATCA, CRS and CbC reports. Payment must be made by 1 June each year.

'Following the supplementary review, the BVI is confident that a largely compliant rating should be reinstated', says law firm Maples.

The enrolment deadline for US FATCA reporting is 1 April 2024 and the enrolment and notification deadline for CRS reporting is 30 April 2024. The annual reporting submission deadline for both is 31 May 2024.

Each legal entity must also provide its registered agent with the prescribed economic substance annually and the registered agent must provide such particulars to the BVI International Tax Authority within six months of the end of the relevant reporting period.

Sources

The content displayed here is subject to our disclaimer. Read more