BVI Financial Institutions Reminded Of Reporting Obligations
by Mike Godfrey, Lowtax.net, Washington
28 March, 2017
The deadline for BVI financial institutions to comply with filing deadlines under the US Foreign Account Tax Compliance Act (FATCA) is May 31, 2017.
FATCA, enacted by the US Congress in 2010, is intended to ensure that the US obtains information on accounts held abroad at foreign financial institutions (FFIs) by US persons. Failure by an FFI to disclose information on their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
Filings under FATCA can be made through the BVI Financial Account Reporting System (BVIFARS).
Financial institutions that have not previously enrolled with BVIFARS and have filings to be reported in 2017 must enrol by April 1, 2017. The statutory submission deadline for all filings is May 31, 2017.
BVI financial institutions have also been reminded of their separate filing obligations under the Common Reporting Standard (CRS), the OECD's new international standard for the automatic exchange of financial account information in tax matters, and under the intergovernmental agreement (IGA) between the UK and the Crown Dependencies and Overseas Territories, of which the BVI is one.
The reporting requirements under the IGA are transitioning to automatic exchange of information under the CRS. However, for 2016 accounts reportable in 2017, financial institutions will be required to report under both regimes.
La Toya James, Director of the territory's International Tax Authority, has advised firms that in order to comply with the filing requirements under both regimes, financial institutions will be required to report the "maximum" of what is required by the CRS or the IGA.
Filings due under the CRS and the IGA cannot yet be made electronically. The International Tax Authority has said that it will advise firms when BVIFARS is available to accept electronic filings.
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