During a presentation at Thursday’s sitting of the House of Assembly, leader of government business Premier Andrew Fahie said the amendments are to deal with the subject of economic substance as well as evaluations the territory must undergo to avoid being named on the European Union’s blacklist of ‘tax haven’ jurisdictions.
“We have been holding widespread consultations with stakeholders to get this right and similarly our equal effort is being exerted in ensuring that the International Tax Authority is adequately resourced in terms of staffing and financing,” he said.
He said this is because the territory is being faced with more requests for information relating to taxes, including the aforementioned area of economic substance. The EU’s definition of economic substance has to do with financial services companies setting up physical and appropriately-staffed office spaces in the territory.
He said the ITA will, therefore, have to increase its staff to roughly 35
“I have asked them to do a more vigorous recruiting in the media … in order to make sure we stay from being blacklisted,” he added.
Premier Fahie said the ITA performs a critical role in ensuring the smooth implementation and operation of the economic substance reporting requirements along with the structures.
“It is mission-critical that we do all in our power to minimize the negative impact on our territory’s economy that the economic substance requirement portends. We will be coming back into this House with more legislation and also new policy shifts that we feel the people of the Virgin Islands can benefit from the economic substance,” Fahie said.
He said while it is a challenge to some, the BVI will seek to capitalize on its benefits.
Previous amendment to BOSSs Act
In January, the BOSSs Act was amended to work alongside the Economic Substance Companies and Limited Partnership (Amendment) Act of 2018.
This is because the financial services companies registered in the BVI before January 1 has until June 30 to start complying with the economic substance requirements.
Notably, under the BOSSs Act, companies are required to report who is the beneficial owner (the ultimate owner) of the said company.
Background of BOSSs
In March this year, Premier Fahie had said the focus of his office is now to convince Britain how the BVI’s Beneficial Ownership Secure Search System (BOSSs) is a better alternative to the UK-mandated public registers of company beneficial ownership.
“BOSSs can be extremely effective aids to law enforcement authorities and much more so than the unverified public register which the UK hosts,” Premier Fahie said at the time.
He made those statements following the UK government’s position that it needs more time to contemplate the amendment to its Financial Services Bill which would force the BVI to implement public registers by 2020 — three years earlier than the 2023 reprieve the BVI was recently granted.