While the AIA regime requires financial institutions to exchange fairly formalistic and anodic data on the accounts of foreign taxpayers in their books, the “on-request” regime deals, conversely, with specific and potentially in-depth investigations into the issues of designated and designated taxpayers with offshore or international stakes. These investigations are usually carried out, but not exclusively, as a result of data breaches involving international financial centres. Under these principles, the ITA must ensure that the constitutional requirements of procedure and procedure are respected when publishing notifications inviting individuals to disclose confidential information to the authorities. At a very high level, such ITA notices should generally contain sufficient basic and contextual information to enable the addressee to determine on what basis the initial (overseas) application may have been made. It is also recognized that the individual has the right to determine whether the notice and request have been made valid and are consistent with the current IOE framework – in other words, to be able to understand whether the request is a fishing exercise. residents of “countries of exchange of information” are subject to withholding tax at the following rates: 22.5% for payments of funds made between 1 July 2008 and 30 June 2009; 15% (final) for payments of funds made between 1 July 2009 and 30 June 2010; and 7.5% (final) for payments of funds as of July 1, 2010. In November 2009, the Prime Minister of the British Virgin Islands, Ralph O`Neal, announced that he would travel to the Netherlands to sign the thirteenth agreement on the exchange of tax information of the islands on 11 September, in line with the court`s obligation to act as a responsible financial services centre. For the 2008/2009 income year, investors residing in countries of exchange of information may, as a transitional measure, claim a deduction for expenses related to the funds. The net amount is taxed at 22.5%.
Residents of other countries are subject to a 30% tax. The agreements were signed by dancia Penn, BVI`s Minister of Health and Social Development, and senior officials from the Nordic group. The OECD Model Conventions provide for the exchange of information in tax matters, both in the field of civil taxation and on concrete evidence of tax evasion. At the ceremony, Penn also entered into double taxation agreements with the Nordic group on behalf of the British Virgin Islands. The purpose of this Agreement is to promote international cooperation in tax matters through the exchange of information. It was developed by the OECD Global Forum Working Group on Effective Exchange of Information. In December 2009, the BVI signed texts with Ireland and China. The agreements were signed by Prime Minister and Finance Minister Ralph O`Neal, Irish Ambassador to the UK Bobby McDonagh and China`s Deputy Commissioner of State Tax Administration Qian Guanlin. The two agreements brought the number of such agreements to 17. The agreement was ratified by the BVI government in September 2011 along with agreements with Aruba and the Czech Republic. The Convention was extended from the United Kingdom to the Virgin Islands and entered into force on 1 March 2014.
The Convention was drawn up jointly by the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe in 1988 and amended by a protocol in 2010. The Convention is a multilateral instrument that allows all forms of tax cooperation to combat tax evasion. For more information on the Convention, please visit the OECD website. As mentioned above, the best-known examples of automatic exchange in the world are FATCA and CRS….Back to Blog