Most Read Contributor in British Virgin Islands, February 2017
The Government of the British Virgin Islands has recently
enacted two revenue-increasing measures. One raises the tax on
alcohol and tobacco, and the other on hotel accommodation. Both of
these measures were shadowed in previous bulletins but are now in
Firstly, the Customs Management and Duties (Amendment of
Schedule 4) Order 2016 raises the duty on alcohol and tobacco. The
previous system, which was based on fixed fees per gallon, served
to promote certain types of product (for example beer) against
others (for example whisky). The new system is based on percentages
of value. It does not differentiate between product types, raising
the duty on all.
Previously, in broad terms, beers were taxed at US$1.10 per
gallon, wine at $1.20 per gallon, brandy and whisky at $3.00 per
gallon, and rum, vodka and gin at $2.30 per gallon. Now all
alcohols are taxed at 25 per cent of their value.
Similarly, raw tobaccos were previously taxed at $0.50 per pound
and prepared tobacco products (for example cigarettes) at $0.55 per
pound. Now all tobaccos are taxed at 50 per cent of their
"Value" is obviously a flexible concept but for these
purposes it is the normal price, ie the price which they would
fetch, at the time when the charge to duty arises, on a sale in the
open market between a buyer and a seller independent of each
Secondly, the Hotel Accommodation (Taxation)(Amendment) Act 2016
seeks to increase the current hotel accommodation tax from seven to
ten per cent. This brings the BVI into line with other premier
holiday destinations in the Caribbean, although the rate is still
less than many US destinations.
Both of these measures have been published in the Official
Gazette and are now in force.
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.
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The Common Reporting Standard (CRS) has been initiated by the Organization for Economic Cooperation and Development (OECD) aiming at improving international tax compliance and preventing tax evasion, through the automatic exchange of information between the countries that implement CRS.
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