BVI locally resident companies may now apply for exclusion from tax and economic substance reporting
In October 2023, the BVI International Tax Authority (ITA) reminded the public about a new provision introduced under the International Tax Authority (Amendment) Act, 2023 (ITA Act), introduced earlier in 2023, which permits local companies (as defined) to be excluded from certain economic substance tax reporting requirements. In order to qualify, the local company must submit an application for exclusion to the ITA.
A "local company" is defined as any company or limited partnership that is a tax resident in the Virgin Islands and has obtained a certificate of exclusion from the ITA as outlined in section 27 of the ITA Act. The term "resident for tax purposes" covers any company, entity, or individual that can prove to the BVI ITA that it does not have any tax obligations outside of the Virgin Islands. In practice the exclusion will be of limited use to any BVI company engaging in business outside of the BVI or under foreign ownership.
Companies falling within the scope of the above definitions are required to initiate the exclusion application process should they seek to rely on the exclusion. This involves completing the application and uploading the necessary supporting documentation through the ITA’s online portal.
Once approved, the BVI ITA will issue a certificate confirming the company's exclusion from reporting obligations under the Mutual Legal Assistance legislative requirements. These reporting obligations include requirements related to economic substance reporting.
For more information, the official press release can be accessed here.
