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    ARTICLE - BVI

    BVI Removed from EU’s ‘Blacklist’

    04 Oct

    BVI removed from blacklist - Introduction

      In a significant development for the British Virgin Islands (BVI), the European Union (EU) has officially removed the BVI from its list of non-cooperative jurisdictions for tax purposes.    This is important news for the BVI, a prominent offshore financial centre, and reflects its commitment to adhere to international standards, particularly those set by the OECD Global Forum regarding the exchange of information on request.  

    The EU's announcement

      The EU press release regarding this development stated that the British Virgin Islands had been removed from the list due to amendments made in its framework concerning the exchange of information on request, specifically criterion 1.2.    The EU further noted that the BVI would be reassessed in line with the OECD standard. While this reassessment is pending, the jurisdiction has been placed in Annex II.  

    What is the EU's Non-Cooperative Jurisdictions List?

      The EU's list of non-cooperative jurisdictions for tax purposes was established in December 2017 as part of the EU's external taxation strategy.    Its primary goal is to support worldwide efforts in promoting good tax governance.    The EU Council has established a set of criteria by which jurisdictions are evaluated.    These criteria encompass areas like tax transparency, fair taxation, and the implementation of international standards aimed at preventing tax base erosion and profit shifting.    The code of conduct group's chair engages in political and procedural dialogues with relevant international organizations and jurisdictions as needed.  

    Understanding the BVI Listing

      The BVI's journey towards removal from the EU's list of non-cooperative jurisdictions began when, on 9 November 2022, the OECD Global Forum published its second-round Peer Review Report on the BVI.    This report revealed that the BVI's rating had been downgraded from 'largely compliant' to 'partially compliant.' Importantly, a rating below 'largely compliant' automatically led to a jurisdiction being placed on the European Union's list of non-cooperative jurisdictions for tax purposes.   The 'partially compliant' rating assigned to the BVI encompassed the period from 1 March 2016, to 30 June 2020, considering exchange of information requests received during this timeframe.    It also factored in a 'block period' from 17 September 2017, to 31 December 2018, which was due to the disruptive impact of Hurricane Irma. Furthermore, the report assessed the legal and regulatory framework in place as of 9 September 2022.   Crucially, this rating did not account for the legislative changes introduced in 2022, which included the BVI Business Companies Amendment Act 2022 and the BVI Business Amendment Regulations 2022, both of which came into effect on 1 January 2023.  

    BVI removed from blacklist - Conclusion

      The removal of the British Virgin Islands from the EU's list of non-cooperative jurisdictions for tax purposes is a significant milestone for the BVI and its reputation as a financial center.    It reflects the dedication of the BVI government and stakeholders in aligning with international standards and demonstrating a commitment to transparency and cooperation.    This development not only bolsters the BVI's status but also highlights the importance of maintaining adherence to global tax governance standards in an increasingly interconnected world.   If you have any queries about BVI removed from blacklist, BVI matters in general, or any tax matters, then please get in touch.
    ComplianceEUTax avoidance

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