In the third installment of Harneys’ SOS Series, Phil Graham and Josh Mangeot examine the implications of the first reading of the BOSS (Amendment) No 2 Act, 2019 in the House of Assembly, which is the enabling legislation for bringing into force the International Tax Authority (ITA)’s economic substance Code in the BVI. It is expected that the second and third reading will take place in the House as soon as possible, and will come into law shortly thereafter.

Episode Three

Phil and Josh discuss the process involved in the Code being finalised in the BVI and what steps entities should be taking right now – particularly if they may be in breach of the Economic Substance (Companies and Limited Partnerships) Act, 2018, given that the first compliance period has now started.

Key takeaways:

• The first compliance period has commenced for all BVI registered companies and limited partnerships with legal personality.

• Such entities are now in their first “financial period” for compliance purposes and need to classify their activities (and to consider their tax status, if they carry on any “relevant activity”) and take steps to ensure that they are compliant as soon as possible, if they have not done so already.

• Nil returns” will be required for all BVI entities.

• The ITA is expected to provide further clarification around what “evidence” will be accepted where an entity wishes to claim it is “non resident” for tax purposes.

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.