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The British Virgin Islands Publish Economic Substance Rules
The International Tax Authority of the British Virgin Islands has published the Rules on Economic Substance in the Virgin Islands (“Rules”). These rules replace the draft version of the Economic Substance Code (“Draft code”) that was released in April 2019 and provide additional guidance and explanatory notes to assist with the interpretation of the Economic Substance (Companies and Limited Partnerships) Act 2018 (ESA) that was passed into law in December 2018.
The ESA imposes economic substance requirements on BVI companies and limited partnerships with legal personality that are engaged in “relevant activities,” unless they are considered nonresident for the purposes of the ESA. The Rules contain limited material changes from the Draft Code, with the majority of the guidance provided remaining consistent. The Rules do however introduce a number of minor amendments throughout, as well as some notable additions/clarifications.
Please find detailed commentary on this matter here
To access the draft bill, please click here.