AEOI is a new global standard that aims at reducing the possibility for tax evasion. AEOI provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence. The AEOI standard is implemented by participating jurisdictions. The Virgin Islands currently exchanges information automatically under the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standards (“CRS”). Prior to CRS the Virgin Islands exchanged information automatically with EU Member states in relation to Savings Income Information. This Government of the Virgin Islands amended the Mutual Legal Assistance (Tax Matters) Act, 2003 to ensure compliance with the EU Savings Directive (“EUSD”), which meant that effective from 1 January 2012, the EUSD was complied with through AEOI in the BVI. All paying agents were required to report to the Competent Authority of the Virgin Islands in a manner outlined in Article 17 of the Act. The implementation of CRS in the Virgin Islands meant that EUSD has been subsumed as of 2016 and all automatic exchanges would be conducted under CRS and not EUSD. The last reporting year under the EUSD was the tax year ending 31 December, 2016. Historic information on the EUSD can be found at the following links.
In addition, the Virgin Islands formerly exchange information with the United Kingdom under the UK Inter-Governmental Agreement which was coined as UK FATCA or UK CDOT. In the same way as the EUSD, exchanged under UK FATCA or UK CDOT no longer occur. There was a transition period prescribed and exchanges with the UK from 2018 onwards only occur under CRS. Historic information on UK FATCA/UK CDOT can be found at the following links.
To enact CRS, the Mutual Legal Assistance (Tax Matters) Act, 2003 was amended in 2015 and further in 2018. Exchanges occur under the Multilateral Competent Authority Agreement. The ITA under the MLA is required to publish a list of Participating Jurisdictions and a list of Reporting Jurisdictions annually.
AEOI is the transmission of financial account information automatically without a request for information being issued. In order to exchange this information automatically the Government of the Virgin Islands is required to put legislation in place to ensure that its financial institutions are collecting and maintaining the necessary customer due diligence and financial account information and as such reporting all relevant reportable accounts to the Government of the Virgin Islands and the Government in turn by way of its obligations under an Agreement or Arrangement will provide this information to the relevant jurisdiction(s) on an annual basis.
The Agreements and Arrangements entered into by the Government of the Virgin Islands that accommodate automatic exchange of information, sets out:
- the financial account information to be exchanged,
- the financial institutions that need to report,
- the different types of accounts and taxpayers covered,
as well as customer due diligence procedures to be followed by financial institutions.
For more information on Automatic Exchange of Information please click on the relevant item below: