On 4 August 2022, BVI passed the International Tax Authority (Administrative Penalties) Regulations (the Regulations). The Regulations came into force as of 14 June 2022.

The Regulations are made under the International Tax Authority Act, Revised Edition 2020 (the ITA Act) here, which itself was amended by the International Tax Authority (Amendment) Act, 2022 (2022 Amendments).

The Regulations now allow the International Tax Authority (ITA) to impose administrative penalties where the ITA considers that a person or legal entity has breached any provision in the ITA Act or any other directive issued by the ITA. The administrative penalties in the ITA Act range from US$100 to 50,000.

Process for dealing with penalties

Prior to sending out a penalty the ITA must consider in detail the grounds for determining a proposed penalty and subsequently send a notice to the person or entity who has, in the view of the ITA, committed the breach.

The recipient of such notice will have 21 days to reasonably justify the cancellation or reduction of the proposed penalty with the ITA. The ITA can then adjust the penalty as and if they see appropriate, and consequently impose an actual penalty notice which then gives the recipient 14 days to make payment.

Any aggrieved person or legal entity can choose to file an appeal before the Court. However, the Regulations make clear that an appeal of the decision of the Authority to impose an administrative penalty does not operate as a stay on the obligation of the person or legal entity to pay the penalty.

The Regulations can be found here.

Other ITA enforcement action

In addition to the above new penalties the following enforcement powers have also been granted to the ITA under the 2022 Amendments:

• General powers of disclosure and related restrictions
• Power to request information and documents
• Authority to apply for a search warrant
• Power to compel examination under oath before a Magistrate or the ITA
• Power to provide assistance to foreign competent authorities
• Power to provide for compliance inspections
• Appointment of examiners

The ITA Act can be found here.

Amendments are here.