Premier signs two new tax agreements with UK Government

Premier Hon Ralph T. O’Neal, OBE signs tax information exchange and double taxation agreements with Foreign Minister Gillian Merron in London on Wednesday, October 29

The tax information exchange agreement is designed to build upon the history of cooperation between the BVI and the UK in the exchange of information in criminal matters. It is also in keeping with the Territory’s commitment to the principles of transparency and exchange of information as outlined by the Organisation for Economic Cooperation and Development (OECD).

The local taxes covered by the agreements are payroll, land and house while in the case of the UK, they will also include corporation, capital gains, inheritance and value added taxes.

Under the scope of the agreement, both parties are required to “provide assistance through exchange of information that is foreseeably relevant to the administration or enforcement of the domestic laws of the parties concerning the taxes and the tax matters covered by this Agreement, including information that is foreseeably relevant to the determination, assessment, verification, enforcement, recovery or collection of tax claims with respect to persons subject to such taxes, or the investigation or prosecution of tax matters in relation to such persons.”

The agreement also provides for the confidentiality of information exchanged and gives assurances that the information will not be disclosed to other jurisdictions. 

According to the agreements, both Governments agree “not to apply prejudicial or restrictive measures based on harmful tax practices to residents or citizens of the other party so long as the Agreements are in force and effective.”  ~~Adz:Right~~

It was also agreed that if one of the parties were to apply “prejudicial or restrictive measures based on harmful tax practices to residents or citizens of the other party, it is understood that that other party may suspend the operation of either, or both, agreements for as long as such measures apply.”

Under the agreements, “a prejudicial or restrictive measure based on harmful tax practices means a measure applied by one party to residents or citizens of either party on the basis that the other party does not engage in effective exchange of information or because it lacks transparency in the operation of its laws, regulations or administrative practices, or on the basis of no or nominal taxes and one of the preceding criteria.”

The agreements will enter into force when the legislative procedures needed to give them effect, have been completed. They signify Government’s commitment to transparency in its operations and its willingness to form mutually beneficial relationships.