Posted by British Virgin Islands “BVI” Finance have sent a circular on the second revision of the Rules issued by the BVI International Tax Authority under the Economic Substance (Companies and Limited Partnership) Act, 2018. The Rules were published on 10 February, 2020.
Changes are understood not to be substantial and are generally made to improve or clarify statements.
A summary of the changes are as follows:
• the anticipated duration of compliance plans have been clarified in paragraph 2.12;
• the procedure to file tax residency claims have been clarified in a new paragraph 4.3;
• the reference to ‘general partner’ has been corrected in paragraph 5.26;
• paragraphs 5.28 and a related sentence in 2.7 have been deleted (we understand as possibly ambiguous);
• clarification and examples of IP holding business were added to paragraphs 5.31 and 5.32;
• clarification and an example of distribution and service centre business were added to paragraph 5.36;
• where strategic decisions are to be taken has been clarified in paragraph 7.4;
• where core income generating activities are to be performed have been clarified in paragraph 7.19;
• clarifications on outsourcing were added to paragraph 7.22 and 7.23;
• paragraph 8.2 has been shortened;
• the summary on the applicability of the Rules have been set out more clearly in paragraph 11.10
You can download Revised ‘Rules and Explanatory Notes’ here.