The British Virgin Islands (BVI) government entered into its
twenty-sixth tax information exchange agreement (TIEA) with the
Government of Japan on 18 June 2014.
This new TIEA is not present in force but will enter into force on
the thirtieth day after completion of the domestic implementation
procedures by both the BVI and Japan. Under the BVI's domestic
regime TIEAs are implemented through subsidiary legislation under
the Mutual Legal Assistance (Tax Matters) Act, 2003 (MLAT).
Historic practice shows that TIEAs tend to be fully implemented and
come into force approximately one year following signing.
The BVI-Japan TIEA is essentially consistent with the OECD
standard model template for TIEAs. It provides for the assistance
through exchange of information that is foreseeably relevant to the
administration or enforcement of the laws of the BVI and Japan
concerning taxes covered by the TIEA. In the case of the BVI the
competent authority is the Financial Secretary or an authority
designated by him in writing i.e. the International Tax Authority
and the competent authority in the case of Japan is the Minister of
Finance or his authorised representative. The BVI-Japan TIEA
applies to taxes of every kind and description imposed by the BVI
and Japan except that the TIEA shall not apply to taxes imposed on
behalf of political subdivisions or local authorities of the BVI or
Japan.
The requesting party under the TIEA must provide information on
the identity of the person that is the subject of the request, the
period of time with respect to which the information requested is
required for the tax purposes of the requesting party, the nature
of the information requested and the form in which the requesting
party would prefer to receive the information, the tax purposes for
which the information requested is sought and the reason for
believing that the information requested is relevant to the
administration or enforcement of the laws of the requesting party,
reasonable grounds for believing that the information requested is
held by the requested party or is in possession or control of a
person who is within the territorial jurisdiction of the requested
party, to the extent known, the name and address of any person
believed to be in possession or control of the information
requested and a statement that (i) the request is in conformity
with the laws and administrative practices of the requesting party,
(ii) if the information requested was within the territorial
jurisdiction of the requesting party then the competent authority
of the requesting party would be able to obtain the information
under the laws or in the normal course of administrative practices
of the requesting party, (iii) the request is in conformity with
the BVI-Japan TIEA and a statement that the requesting party has
pursued all means available within its territorial jurisdiction to
obtain the information requested, except those that would give rise
to disproportionate difficulties.
The BVI-Japan TIEA does provide for the possibility of declining a
request on several grounds, for example, where the request of the
requesting party is not made in conformity with the TIEA, where the
requesting party has not pursued all means available within its
territorial jurisdiction to obtain the information requested or
where the disclosure would be contrary to public policy.
Harneys is at the forefront of all developments relevant to the
laws and regulations governing mutual legal assistance in the BVI,
Cayman Islands and Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.