The SOS series was launched to provide our audience with the latest news on developments in the Economic Substance space, cutting through the confusion to deliver expert guidance from our Economic Substance Analysis team.

Episode 2

In the second episode, Phil Graham and Josh Mangeot discuss the key aspects of an industry update provided by BVI Finance on 12 July 2019. The update clarified that the commencement dates for entities’ first “financial period” remain unchanged and discussed the BVI International Tax Authority (ITA)’s stated approach to the use of its investigation powers as they relate to BVI entities, registered agents and other corporate service providers.

Key takeaways:

• The first compliance “financial period” has commenced for all BVI companies and limited partnerships with legal personality as set out in section 4(1) of the Economic Substance (Companies and Limited Partnerships) Act, 2018 – in particular, the 30 June 2019 commencement date for entities formed or registered before 2019 remains unaffected

• All BVI companies and relevant entities should have conducted an entity classification to determine whether they carry on any relevant activities and, if so, to determine their compliance and reporting obligations

• The ITA has stated that the manner in which a legal entity determines its classification should be formalised in such detail so as to allow the ITA to make a determination of compliance or non-compliance and, as part of its investigation and enforcement powers, it will be expected that registered agents will retain the relevant details and documentation to ensure the timely provision of that information

This episode was recorded on 19 July 2019.

Harneys’ online classification solution

Harneys’ Economic Substance online classification solution provides a cost effective way for BVI companies and limited partnerships with legal personality to demonstrate formally that they have considered their position under the economic substance legislation. The automated classification solution provides tailored real-time legal advice, provided by Harneys, for a flat fee of USD $250. For further information, please visit https://economicsubstance.vg

Stay tuned for more Substance on Substance.